Answer BOTH parts
Henry and Jill are partners in a small business. The partnership operates a hardware and gardening supplies store, and trades under the name ‘Henry’s Hardware’, although Jill also takes a full role in the business. In each of the cases below discuss whether the members of the firm are liable for the acts of the individual partner:
(a) The partner agreement provides that neither partner may buy any trading stock with a value of more than $20,000.00, without the express agreement of the other partner. One day, when Henry is absent from the store, Jill is offered a truck load of low-quality house paint for $25,000.00. She writes out a cheque drawn on the firm’s account to purchase the paint. When Henry returns, he immediately telephones the bank to stop payment on the cheque. Is the partnership bound in a contract to purchase the paint? (10 marks)
(b) While working late one night, Henry uses a forklift to transfer some patio tiles onto a truck for delivery to a customer. While driving the forklift at high speed through the customer car park, Henry fails to keep a proper look out and crashes into a parked car, causing damage to the car. Henry also had some tiles on the forklift, which he was planning to take home for his own use. Is the partnership liable for the damage to the car? (5 marks) [TOTAL: 15 MARKS]
