Sue and Tom are business partners. They have a partnership in which they purchase and renovate homes and apartment buildings. They have worked together as partners for five years and currently own seven properties. A few months ago they talked about purchasing another property. Sue was in favor of the purchase and Tom was not sure because he believed the asking price was too high. Tom told Sue he would let her know his decision (as to whether he thought the partnership should purchase the property) by a specific date.
On the date Tom was to have given Sue his answer, he was out-of-town on vacation. Two days later Sue purchased the property in her own name. When Tom returned from vacation, he told Sue he thought the partnership should buy the property. Sue told Tom she had bought the property in her name alone. Tom asked Sue to put the property in joint name so the partnership could own it. Sue refused.
Write an essay answer and include the following:
? Your opinion as to whether Tom and Sue owed each other any duties based on agency law.
? A discussion of which duties Tom and Sue may have breached and how they may have breached the duties.
? A discussion of whether Tom or Sue may have rights against the other.
Yes, Tom and Sue definitely owed each other duties based on agency law. As per fiduciary duty, Fiduciary Duty - a partner must act in best interest of other partners:
Account for all profits
Not use partnership property for personal benefit
Not compete with partnership
Disclose all information and not use it for personal gain
Partners owe a fiduciary duty to one another. The law imposes upon partners the obligations of the utmost good faith and integrity in their dealings with one another in partnership affairs. The fiduciary duty among partners is generally one of full and frank disclosure of all relevant information for just, equitable, and open dealings at full value and consideration. Thus, each partner is required to consult and inform his co-partner as to partnership matters.
The Uniform Partnership Law reinforces this requirement by providing that partners must render, on demand, true and full information of all things affecting the partnership to any partner. The fiduciary nature of the partnership relation means that a partner will not be permitted, without the consent of the other partners from any transaction connected with the formation, conduct, or liquidation of the partnership. Subject to any agreement between them, each partners shares equally in the profits and surplus remaining after ...
Your opinion as to whether Tom and Sue owed each other any duties based on agency law