Legal Questions

Read the following facts. Using only principles, concepts and law discussed in BUSN1019 (including the Partnership Act 1891 (SA)), answer each question:

Re-read the “Notes on Answering Legal Questions†commencing on page 14 of the Topic

Guide and Barron pages xxii “ xxiv (7th Ed). Conciseness of expression is important in

answering this assignment, so please do not exceed the word limit! Answer all questions.

Clearly number each answer to each question. All assignments must contain full

acknowledgement of sources and failure to adequately reference sources via footnotes, and

include a Bibliography at the end of the paper, amounts to plagiarism and will result in a

“Fail†grade for this part of the assessment. Use the “Business Law Style Guideâ€

commencing on page 60 of the Topic Guide or see:

If you wish to submit your assignment answer as part of a group:

(maximum of 3 students per group)

You have the OPTION of submitting your assignments on a group basis. Group work can

allow for the benefit of shared understandings and many people (but certainly not all), learn

better if they work with others. However, this is an option: if you do not wish to work in a

group, or have trouble organising a group to work with, you may simply submit your own

work for individual assessment.

If you wish to submit your assignment answer as part of a group:

1. Select your own group of 2 or 3 people (no more!).

2. All members of the group should sign their own cover sheet (including the word

count) and all cover sheets should be stapled (in family name alphabetical

order) to the front of the assignment.

3. Lodge ONE COPY ONLY of the assignment with 2 or 3 coversheets (depending

on the size of the group) attached in family name alphabetical order.

4. One mark will be allocated for the assignment and this will be the mark assigned

to each group member.

5. Group management issues are the responsibility of the members of the group and

not the teaching staff. Remember: whatever one member contributes to the

assignment, and any consequences that flow from that contribution, is the

responsibility of the group and all members must bear the consequences.

6. If you have difficulty locating others who might like to work in a group with you,

use BUSN1019’s FLO’s discussion board to nominate your interest and locate

others who might live near you or otherwise be likely candidates to work with you.

Read the following facts. Using only principles, concepts and law discussed in BUSN1019

(including the Partnership Act 1891 (SA)), answer each question:

Helen Wong is atalented fashion designer who has recently wona number of awards in fashion design in Australia.She has been dreaming of setting up her ownline.Her Former design teacher Mario,being impressed by the recent achievement of his starstudent,suggests that they set up a business together. Mario’s idea is that Helen should assist him in designing luxurious clothing for a niche market, the target being young famous movie stars and young top models who need exquisitely designed clothes for special occasions. Helen should be mainlyresponsible For approaching potential clients to find out what they need and make sketches to be approvedby Mario and to be produced upon Mario’s approval. Mario suggests that the as the scale of the business will probably be mall, they should hire Mario’s friend Peter to be in charge of the accounting and administration work. The proposed business will be run out of Mario’s property which is in a commercial building .


Helen asks you for advice on the most appropriate form of business structure for the proposed business. Advise Helen on the options in respect of business structures, the advantages and disadvantages of each structure and your Recommendations.Helen and Mario have finally decided to set up their business as a general partnership and would like to call their business “chic couture†. Helen and Mario have decided that Helen will be responsible for buying the office equipment and equipment for sketching designs while Mario will be responsible for sourcing and buying fabrics and all the necessary accessories for producing clothing for clients. It was agreed that neither of them could make any single purchase above $3,000 without the other’s consent.

2.Advise Helenon what she needs to do to establish this partnership.THe business is a success and continues to flourish. Helen and Mario decide to go on a business trip to Europe to watch fashion shows and get to know more fashion icons in the hope of expanding their clientele. As Peterhas to leave Hong Kong to take care of ome important family affairs he will also be away from office.Helen and Mario Thereforedecides to entrust their neighbor Mr. Lee with the keys of the office and ask him to keep watch of their Office while they are away. While they are gonethere is a fierce typhoon and the windows in the office is broken by the wind when the typhoon signal no. 8 is hoisted. Mr. Lee sees the broken Window and tries to call Helen and Mario to let them know about it. He is unable To get through to either Helen or Mario on their Mobile phone so he arranges for one of his friends, who is a local contractor, to put a board over the window and seal it to ensure no more water can getinto the office.Unfortunately this work occurred on a public holiday so the builder charged twice his usual rate. He gives Mr. Lee an invoice of $2,000. Helen returns from the business trip a few days before Mario.When she returns,Mr.Lee Gives her the Invoice from the Contractor . While thankful that Mr. Lee helped to make arrangement to protect the office, she is shocked at the large amount of

the invoice and believes she should not have to pay it.

3. Advise Helen whether the partnership needs to pay the amountstated on the invoice from the contractor. While Mariois stillin Europe, Helen receives a large order for dresses from a generous client and Helen needs to purchase a high performance computerand the appropriatesoftware from High Tec Supplies Pty Ltd. to do ketches

for this client within a short period of time. The high performance computer and the software will Costs more than $3,000. As

the client has set Helen a deadline formaking the sketches and Helen wants to show them to Mario for approval when he comes back in a few days, Helen proceeds to purchase he computer and software for$3,500 without consulting Mario.Subsequently the order from the generous client falls through and Helen and Mario do not want to pay the bill from High Tec Pty Ltd.

4. Advise on the position ofHelen, Mario and Mar Mario Art in relation to the 2,500 bill from Art Supplies Pty Ltd.On her business trip to Da Fen,Mario discovered that high quality artworks could be produced by Chinese artists at significantly less cost than the artworks produced byHelen. Mario therefore stablished a business producing reproduction artworks paintedby Chinese artists. Mario felt that Helen did not have anything tocontribute to this new business, and she did not want to hurt Helen’s feelings, so she did not mention

This new business venture to Helen. However, Helen subsequently discovers Mario’s involvement in the new business. She also discovers that it was Mario’s new business that ultimately won the contract to supply the artworks for the large new office building.

5. Advise Helen what, if any,rights she may have arising from the above.Following the difficulties between Helen and Mario discussed above, they decide that they can no longer continue in Business together. They agree to end the MarMario Art partnership. Mario leaves all the art supplies with Helen but takes all the office pplies.

In addition, over the period of the partnership, the art studio apartment has increased in value due to a property boom.Mario argues that she is entitled to a share of that increased alue.

6. Advise Helen on the distribution of assets upon the dissolution of Mar Mario Art.