The Law of Partnerships

Case 17.1 Issue

From the facts of the case, the main issue is whether the two parties - that is, Roberta Blumberg and Michael Ambrose - could be said to have been in a partnership. While Blumberg (plaintiff) insists that she was in a partnership with Ambrose (defendant), the latter denies any existence of a partnership and insists that the plaintiff was a mere employee.

Rule

According to the law of partnerships, parties will be said to be in a partnership if there was an agreement to that effect. Even so, the non-existence of a partnership agreement does not mean that proof of a partnership cannot be established. Instead, if the parties conducted themselves in a manner that showed the existence of a partnership, then they could be said to be in one.

Application

In the case scenario, the plaintiff was indeed a partner. This is because of the extent of her involvement in the entire operation. She was the heart and face of the operation. In addition to this, the sums which were promised to her went over and above those which would be given to a mere employee. In this regard, it could be argued that the two parties to the dispute had carried themselves and behaved as if they were in a partnership.

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Conclusion

In sum, then, it is possible to argue that, when parties who are involved in a venture carry themselves as if they are in a partnership, courts of law will decide the matter in a manner which presupposes that there was a partnership, without proof of evidence to the contrary.

This case is about a partnership because, ideally, the LLC is a separate legal entity from the person of Ambrose. As such, the LLC in question could be said to have been in a partnership with the plaintiff. From the facts in the case, there are three main indications that a partnership was formed between the parties to the dispute. First, the defendant communicated to the plaintiff that she would “make millions,” which, in normal circumstances, would be a sum too hefty for a mere employee.

Secondly, the defendant told the plaintiff that he considered her to be a “co-founder” and the “face and heart” of the venture. Thirdly, the fact that the defendant was willing to provide the plaintiff with equity meant that she was more than a mere employee. Based on this case scenario, the most important advice is for the parties to a venture to put everything in writing from the outset. Drafting a partnership agreement from the outset would have led to less complications for both parties.

Reference

Wells, H. (Ed.). (2018). Research handbook on the history of corporate and company law.

Edward Elgar Publishing.

Chapter 16

Question 3

In this case, a principal can only be liable for the actions of his or her agent if it can be proven to a sufficient level that the agent was carrying out duties in the course of his employment. In this case, DiDomenico was not acting as an agent of Gimbel. For that reason, any charges against him would not involve Gimbel. Gimbel is correct.

Question 5

Here, the issue is whether, in leaving Burger Chef to find change, the employee was in the course of his duties. In the normal circumstances, the duty would be borne by his employer. However, this particular case is complicated because the employee went further than was normally needed to carry out a personal errand. For this reason, Burger Chef cannot be said to be responsible as he went further than was expected.

Question 9

A fiduciary relationship usually imposes the duty of trust between the parties to an agreement. As such, Ms. Brisbee - by entering into a transaction which would jeopardize the interests of her principals - was in breach of the fiduciary duty. As such, the principals had a right to sue and the court was right in holding Ms. Brisbee liable.