Question

Mark, Sophia and Ben are partners in a small book selling business called TWB Book. They have no written agreement. When they decided to open their business, it was agreed that each partner could purchase goods on behalf of the partnership up to a value of $5,000.00. Purchases above this amount were to be agreed to by all partners.

In the beginning of this year, Mark attended a trade fair in Sydney. There, he met representatives from Lemon International Ltd, a company dealing in children’s entertainment films who was eager to do business with TWB Book. Believing that this would be a good line of business to diversify into, Mark placed an order for several films worth $8,000.00.

Sophia and Ben did not know about this order until the films were delivered at their shop, with a bill for $8,000.00. Sophia and Ben were furious on learning of this transaction and contacted Lemon International Ltd to pick these goods from their partnership premises, arguing that Mark had no authority to purchase them on behalf of the firm.

Discuss the rights and liabilities of the partners and Lemon International Ltd.

Words Limit: 1000