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8/8/2019 EBL Handount & Assignment
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UNIVERSITY OF ENGINEERING AND TECHNOLOGY,
TAXILA
COURSE: ENGINEERING BUSINESS LAWEFFECTIVE DATE: November 01 ' 2010
COURSE CODE: EM-36
CREDIT HOURS: 03
ex h:J;e..A.. l ~ " '-=Date of Submission: NI.7\'ember Q ' 2Q1Q
Date of Return: November 08'2010
ASSIGNMENT
Ql. (P) Contracted with Builder (D) to have it install a heating system in P's motel. P
brought an action for specific performance on the basis that the system was improperly done
and incomplete. Court decides in favor of (P) and against (D).
Now, will a judgment of specific performance be given in a construction situation? Orwill a Court estimate Damages and pay compensation? Explain by giving reasoning. 3 Marks
Q2. What is a contract? How do you differentiate it from an agreement? How many different
Types/kinds of contracts are there? Explain each by giving at least one example. 2 Marks
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7
The Partnership Act, 1932
Shazia Bilalcmail:sha:t;iY;l.b@hormail.com
Engineering- Business Law Fall 2010
week
(j)
INature/ Characteristics of Partnership
• Agency;
• Unlimited Liability;
6)
The partnership
Introduction:
F or a number of commercial reasons, it may be mutually advantageous for two or more people to form a partnership.
Question: Have you ever wondered what a 'partnership' means? What characteristics a partnership
has?Answers: The Partnership Act defines a partnership
as 'the relationship which subsists
between persons carrying on business
in common with a view of profit'. The
people who won a partnership are called
'partners'. They do not have to be based or
work in the same place, though most do.
IIDwever;-mey-mamIaII1 mre sel 01
accounting records and share the profits & losses. ( j)
IEssential Elements/Test of Partnership
• Legal entity
• Result of an agreement
CJ Partnership relation based on Contract.
CJ Implied or Express (Oral or Written)
• Number!Association of two or more persons
CJ Max. limit: 10 for banking; 20 for other business
• Existence! Must carryon some business
o Trade, Occupation or Profession
®
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r7- IEssential Elements of Partnership/cont .. .
• Share profits of the business
o 50%/50%
o 20%1 80% (could be any arrangement)
• Business is carried on by all or anyone of themacting for all (mutual agency)
• Unlimited Liability
• Capital
• Duration
-----l{[)
IPartnership Deed
• Prepared for resolving mutual differences
• Usual Contents:
o Date of Agreemento Name and Address of the Firm
o Name and Address of the Partners
o Nature of Business
o Duration of Partnership
o Capital invested by each partner
IMode of Creating Partnership
• Based on agreement
• Agreement may be express or implied
Q In Writing: helpful in times of adversity
Q Written agreement: "Partnership Deed"
• Essence of Partnership: Trust & Confidence
• D rafted with care and sig ned by all partners
• Stamped in accordance with Stamp Act
• Firm should be registered and copy of the
Deed to be filed with the Registrar (j)
IPartnership Deed
• Usual Contents Contd. :
Q Salary and Commission payable to partners
Q Duties, Functions and Powers of Partners
Q Rules regarding admission, retirement and death
Q Dissolution
Q Arbitration
o Ratio to divide profits and loss-GJ ----------------®
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7 f Firm Name
• Name under which the business is carried on
• Any name
• Should not be a name already adopted by areputed firm, to mislead public
• Should not contain words: Govt., Jinnah,Quaid-e-Azam, Crown, Emperor, King,
Queen or words showing the approval or
patronage of Federal Government or any
Provincial Govt.
@)
IDisadvantages of partnership:
1) Unlimited liability; (All are 'jointly and severally liable' for his partners. If one partner incurs a liability, then the others will
also share it); 2) Risk of dissolution;
3) Disputes between partners on business matters;
4) Limited in size;
5) Frozen investment;
6) Lack of public confidence. I ,
Advantages of forming a partnership
The advantages of Partnership:
1) Ease of Formation;
2) Some partners have more ability to invest capital resourcesthan other partners;
• Better management;
• High credit standing;
• Quick Decision;
Sharing ofRisk;
Possibility of expansion;
Business secrets;
• Ease of Dissolution.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ~
ITypes of Partnership-
• Particular Partnership;
• Limited Partnership
• Partnership at Will; LJ No provision in contract between the partners for
• Duration of Partnership
• Determination of Partnership
o Partners are free to dissolve Partnership at theirown will whenever they desire;
CJ If any partner gives notice of dissolution in writing,the partnership is dissolved.
12-
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ITypes of Partnershlps- cont. ..
• Particular Partnership
o A person may become a partner with another
person in particular adventures or undertakings.
o On completion of such a venture, the partnershipcomes to an end.
~ \...7
IClasses of Partners
• Senior Partners
CJ Has more investment in the firm and receives more
profit
CJ Plays major role in the management of the business
due to age, experience, capability and other skills
• Junior Partners
CJ Opposite of senior partner
• Secret partners
CJ Whose membership is kept secret from outsiders.
o Take active part in the management of firm
• Minor partner I )"
I Classes ~ f P a r t n e r s • Actual or Active Partner
o Engaged in actual conduct of the business
u His acts binds the firm and other partners
o Notice to be given in case of retirement
• Sleeping or Dormant Partnero Does not take part in the conduct of business
o Contributes his share of capital and enjoys profits andlosses
o Not known to outside world
o Not liable to third parties for the acts o f the firm.
o Not required to give notice in case of retirementIy
I Classes of Partners
• Partner by Estoppel or Holding Out
o Represents himself as a Partner, by words
spoken or written or by conduct
o Liable as a partner i f credit is given to the firmbased on his representation. He cannot deny.
o If a partner does not give public notice and his
name is still used in the business, he is also liable
to third parties
o Deceased partner is an exception to this rule.
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Position ofMinor
• A person who is a minor according to law towhich he is subject may not be a partner in a
firm, but with the consent of all the partners
for the time being, he may be admitted to thebenefits of partnership.
• A minor can only be admitted to the benefitsof an already existing partnership
'"7
IPosition ofMinor
• On Attaining Majority
o Within six months should give notice whether he
is joining the partnership or not.
o If notice not given he shall become a majorpartner.
IPosition ofMinor
• During his Minority
• Rightso Right to receive agreed share of profits and
property
o Have access to and inspect and copy the accounts of the firm
o If share in profits is not given, can sue (can do if
he wants to sever his connection)
• Liabilitieso Only to the extent of share in profits and
properties (not personally liable) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - + f ~
I P ~ ~ i t i ~ n s • Lunatic: cannot become a partner
• Alien Enemy: cannot become a partner
• Alien Friend: can enter into contract
• Woman: Married or Unmarried can be a partner
• Insolvent : Cannot become a partner; ceasesto be a partner from date on which order was
passed by court
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I D i s s ~ i ~ t : i ~ ~ ~ f a Firm IRights and Liabilities of partners
&
• Dissolution by Agreement; Consequences of Dissolution of
• Compulsory Dissolution; Partnership
• Contingent Dissolution;
• Dissolution by notice; • Please read at your own;
• Dissolution by court;
• Insanity;
)t )2.
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