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



7

The Partnership Act, 1932

Shazia Bilalcmail:sha:t;iY;[email protected]

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

®

mailto:cmail:sha:t;iY;[email protected]

mailto:cmail:sha:t;iY;[email protected]



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 ----------------®



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-



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.



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



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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EBL Handount & Assignment