Question

use ILAC (ISSSUES, LAW, APPLICATION AND conclusion) to answer below question.
1000 words/ no copy paste please

Question 2 [10 marks] Four friends - Anne, Mary, Jane and Sarah - who met at university graduate as medical practitioners in the same year. Because they all get on so well and trust each other's judgement, they decide to form a partnership of general practitioners in Western Sydney, which they call Your Local Doctor. They sign a partnership agreement in terms of which they are all equal partners. The agreement also states that each partner will have authority to enter into contracts of up to $ 10 000, but that contracts in excess of that amount require the agreement of all the partners Anne and Mary go overseas one year, leaving Jane and Sarah to run the practice. When they return, they discover that the following has happened Just before she went away, Anne had noticed that the practice had almost run out of paper for the printer, so she left a note for Jane, asking her to order a new supply. When Anne and Mary returned, they found that Jane had paid $ 2 000 to buy printer papers from a busines:s run by her boyfriend, whereas the usual supplier would have charged $ 1 200 for the same amount of paper. They are also displeased to find two invoices, addressed to Your Local Doctor, Charles Sturt University Subject Outline LAW504 201930 SMI Version 1 - Published 06 February 2019 Page 17 of 30 awaiting payment: One is from United Medical Suppliers Pty Ltd for $ 13 000 worth of medical instruments ordered by Jane. The other is for$ 2 000 from Uber Australia Ltd for driver training course ordered by Sarah, who had previously argued that the four doctors should run a local ride-share service on days when the practice was not busy. Advise Anne and Mary as to what liabilities arise from the above facts, citing relevant legal authority

Answer 1

Important points of this case:

Each partner will have an authority to enter into a contract of up to $10,000, but the contracts in excess of that amount require the agreement of all the partners.

Issues

List of expenses incurred by Jane and Sarah in the absence of Anne and Mary without their knowledge.

• Jane had paid $2000 to buy printer papers from a business run by her boyfriend, where the usual supplier would have charged $1200 for the same amount of paper.
• Next invoice addressed to your local Doctor awaiting payment: from united medical suppliers Pvt ltd for $13,000 worth of medical instrument ordered by Jane
• The last invoice from Uber Australia ltd for driver training course ordered by Sarah for $2000

Law

As per general principals of law of contracts and its Relations of partners, the partnership is formed between Anne, Mary, Jane and Sarah to form a partnership of general practitioners in Western Sydney, for a common business they call Your Local Doctor and signed an agreement of partnership with equal rights. In the agreement it is clearly stated that “each partner will have an authority to enter into a contract of up to $10,000, but the contracts in excess of that amount require the agreement of all the partners”.

So all the partners do have equal authority and Rights to take part in business

Right to be consulted

As per the agreement, when an individual activity involves an expenses amount exceeding $10000, even an amount of $10001 need to be acknowledged by each partners involved in the business and signed in a legal paper as a proof

In every partnership contract, it is the primary duties of every partner in a business who have entered into an agreement need to take care of the following:

• To carry on a business to the maximum advantage which is in common
• Every partner should be faithful to each other and observe the same
• Every partner is responsible for each and every profit / loss / expenses / good management / goodwill of the business / fraud /sues against the business etc.
• It is every partner responsibility to attend his duties in contact of the business.
• Every partners are supposed to act within authority
• All Partners are liable for jointly and equally for all the activity related to the business

Application:

First Thing Anne and Mary need to do is go through all the expenses occurred during their absence. It is also their prime duty to ensure that each activity has incurred less than $10000.

1. Jane had paid $2000 to buy printer papers from a business run by her boyfriend, where the usual supplier would have charged $1200 for the same amount of paper.

Irrespective of the supplier and its worth for a particular amount, Anne and Mary are supposed to pay for their share. Because the amount is less than $10000 and in the agreement contract it is nowhere mention that the purchase should be made for lower value quotation or to a particular supplier for a particular products / items. Share per head is $500

2. Next invoice addressed to your local Doctor awaiting payment: from united medical suppliers Pvt ltd for $13,000 worth of medical instrument ordered by Jane.

This invoice is need not be addressed by all the partners of the business and as per the agreement it wasn’t taken to the knowledge of Anne and Mary before buying the medical instrument. So, the amount will be paid by Jane. Because its worth exceeded the actual amount stated in the agreement. If in case, the partners agreed to take part for the expense on the welfare of the business and the good faith they have on Jane, They can Share for the amount which is mentioned in the agreement. i.e., $10000. So the share of an every individual for the medical instrument is $2500 per head other than Jane. Share per head is $2500 and for Jane $2500+3000

3. The last invoice from Uber Australia ltd for driver training course ordered by Sarah for $2000.

Though Sarah had previously argued that four doctor should run a local ride share service, it is nowhere entered in the agreement. So it is keen to reject the invoice from Uber Australia as a part of Your Local Doctor’s expense. If in case it has entered in the agreement anywhere, then it can be paid by their respective share, Share per head is $500

Conclusion

Anne and Mary are liable to pay for Printing paper alone as per agreement, so their respective is $500 per head. If in case, they are already aware of Sarah’s Argument of driver training and considered it as an part of business activities. They need to pay their respective share of $500 per head. Not liable for medical instrument ordered by Jane.