Private and Commercial Law Agency †Free Samples to Students

Question: Discuss about the Private and Commercial Law Agency. Answer: Introduction: According to section 4 of the Partnership Act any person who has entered into a partnership with one another unless such partnership is an incorporated limited partnership, is collectively termed as a partnership firm (Blackett-Ord Haren, 2015). The name under which the partnership business is carried out is called the firm name. In Smith v Anderson [1880] 15 Ch D 247, it was held that the persons carrying out the partnership business under the firm are called partners of the firm. In order to commence a partnership business, the persons who intend to carry out the business to gain profit, must enter into a verbal or a written agreement and such partnership agreement shall govern the rights, liabilities and obligation of the partners towards each other, the third parties and the firm (Mitchell et al., 2016). As per section 5 of the Act every partner of a partnership firm is an agent of the firm and of the co-partners for the purpose of carrying out the business of the partnership firm. If such partner acts or carries out the business in the way as it is normally carried out by the firm the firm and the partners become bound by the action of the one of the partners (Parker, 2015). However, such partner so acting does not have any authority to act on behalf of the firm or the person with whom such partner is dealing with knows that the partner has no authority. According to section 6 (1) of the Act, any act done or executed by any partner in order to carry out the business of the firm in the name of the firm which signifies the intention to bind the firm, is binding on the firm and all the partners. However, if there is an agreement between the partners of the firm that any one or more partners have restricted powers to bind the firm, no act done contrary to the agreement shall bind the firm with respect to the persons having notice of such agreement (Slorach Ellis, 2016). Every partner of a firm shall be responsible for the conduct of the other partners in the general course of business. The partners stand in a fiduciary relation to one another in every matters relating to partnership (Roehrich, Lewis George, 2014). The partners must act in good faith and exhibit honesty and fairness in their conduct while carrying out the business of the firm as was held in United Dominions Corporation Ltd v Brian Pty Ltd [1985] HCA 49. The partners must place the interest of the partnership above their personal interests. The partners are under legal obligation to maintain fair dealings throughout the partnership until the dissolution of the partnership firm. According to Section 19 of the Act, the rights and duties of the partners may vary by the consent of all the partners and such consent may either be expressed or inferred from the course of dealings (Cohen, 2017). In the given scenario, Simon George Sara and Mary entered into a partnership agreement and the name of their partnership firm is Computer Solutions. According to the terms of the agreement, it was expressly mentioned that the partners are authorized to enter into contracts of certain amount but in case the amount exceeds the stipulated amount, it would require the consent of all the partners. Simon entered into two transactions without the consent of the remaining partners from Sunstar Computer Hardware Ltd and You Beaut Ute Ltd. George Sara and Mary refused the delivery of both the storage drives. According to section 5 of the Partnership Act 1892, every partner of a partnership firm is an agent of the firm and of the co-partners for the purpose of carrying out the business of the partnership firm. If such partner acts or carries out the business in the way as it is normally carried out by the firm, the firm and the partners become bound by the action of such partner. However, the partners must act in good faith and disclose every matter to the other partners relating to the business of the partnership firm and must place the interest of the firm above ones personal interest. Now, Section 19 of the Act, states that the rights and duties of the partners may vary by the consent of all the partners and such consent may either be expressed or inferred from the course of dealings. As per the terms of the agreement, it was expressly mentioned that the partners are authorized to enter into contracts up to a stipulated amount but where the amount exceeds the stipulated amount, the contract shall require the consent of all the partners. Simon entered into the transactions without informing the remaining partners as he was authorized to do so under the partnership agreement between them. Simon has entered into the contract in the general course of the business and with the intention to expand the partnership firm into freight business, that is, he entered into the transaction in the best interest of the firm. Further, according to section 6 (1) of the Act, any act that is done or executed by any partner to carry out the business of the firm and such act is done or executed in the name of the firm with the intention to bind the firm, is binding on the firm and all the partners. Since the Simon has entered into both the transactions on behalf of the firm Computer solutions, it would amount to an act done or executed in the name of the firm and his intention to expand the business of the firm amounts to an act done or executed in the best interest of the firm. Conclusion In the present case, a legal proceeding has been initiated against the firm and under such circumstances; the remaining partners and Computer Solutions are legally bound by the act of Simon. Reference List Blackett-Ord, M., Haren, S. (2015).Partnership Law. Bloomsbury Publishing. Cohen, G. M. (2017). LAW AND ECONOMICS OF AGENCY AND PARTNERSHIP.The Oxford Handbook of Law and Economics: Volume 2: Private and Commercial Law, 399. Mitchell, R., O'Donnell, A., Marshall, S., Ramsay, I. (2016).Law, corporate governance and partnerships at work: a study of australian regulatory style and business practice. Routledge. Parker, D. (2015). The Company in the 21 st Century: Piercing the veil: reconceptualising the company under law.Journal of Business Systems, Governance Ethics,10(2). Roehrich, J. K., Lewis, M. A., George, G. (2014). Are publicprivate partnerships a healthy option? A systematic literature review.Social Science Medicine,113, 110-119. Slorach, J. S., Ellis, J. (2016).Business Law 2016-2017. Oxford University Press. Smith v Anderson [1880] 15 Ch D 247. United Dominions Corporation Ltd v Brian Pty Ltd [1985] HCA 49.