The Decision Making Process

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The evident issue in this scenario

The evident issue in this scenario is whether Kate would be considered a partner in the new restaurant opened in Parramatta together with Michael and also her personal liability for the $9,000 owed to Australian Truffle delicacies. This issue will be tackled using business principles and laws to determine the eligibility of Kate to join Parramatta.


The decision as to whether the defendant would be considered as a partner in the business and her personal liability for $9,000 owed entirely depends on the fundamental principle “Commitment to Continuity” (Winship 2015, p.629). The principle states that partners should be committed so as to achieve a common goal and also to share interests within the framework of their business. Commitments as such are presumed to continue, unless explicitly time bound.


Notably, both Kate and Michael directly share in the profits of their newly founded restaurant called Salamander that was opened on July 2, 2018. The two individuals also operate equally in the business to ensure that it is successful. The state of law governs organizations, creation and dissolution of partnerships. Consequently, sharing of the profit makes both partners liable independently and jointly for the debts of the partnership.

Generally, the partner relationship is a result of their contract implied or expressed without any requirements that are formal; for instance, a signed document. The court looks at five major things in order to find out if indeed partnership exists, that is, the parties’ intentions, investment of capital by both partners, sharing of losses and profits, business operation control, and the common ownership of property.

The intentions of the partnership refer to what they both want to achieve or benefit out of the business established. In this case, it is evident that Kate and Michael ventured into this business in order to make money and both contributed capital to get the business started. Therefore, the intended achievements and benefits are evident.

Sharing of losses and profits is another element that is primary during the decision-making process. Analysis of the scenario indicates that both Kate and Michael should be able to bare the consequences of losses incurred and even profits made in their restaurant. Therefore, they both agreed that the costs would be shared equally; profits would be calculated monthly and split into halves for the benefit of the two parties. Business operation control and the joint administration of the business is also a key component in analyzing the situation. In this case, both partners agreed to share responsibities such as operating the restaurant and training the staff.

Additionally, the court looks at the investment of capital by both partners. Based on the case regarding Kate and Michael, the two parties invested not only capital but also contacts and equipment within the industry to help benefit the enterprise. Common ownership of property establishes whether the parties involved have vested interests in the operation of the business. Therefore, the court incorporates the common ownership of property as an essential factor in the decision-making process. Both parties were entitled to ownership of the enterprise because of the equal share of responsibilities. Therefore, this implies that Kate is considered a partner to Michael in the new restaurant.

Unfortunately, Michael placed the order for shipment of truffles from the Australian Truffle Delicacies in Tasmania on September 11, 2018 for their restaurant Salamander without consulting Kate. Michael made the decision because for long he wanted to cash in the valuable luxury food item due to its rare nature. Since the opportunity was sudden and unexpected, he got encouraged by the sufficient turnover even though it was not a very intense success. He left two days later to attend to an emergency and could not be contacted thereafter.

Evidently, under the law of state agency that is concerned with the “agent”- “principal” relationship; a relationship whereby a partner has legal authority to act on behalf of the other. Relationships as such arise by implication or explicit appointment. This shows that partners are liable personally for any wrong doing for which an action for damages may be brought by its urgent or the partnership. In the case of this new enterprise, due to reasons stated above, it is clear that Kate is a partner in this business due to her active participation in the business as a partner to Michael.


Therefore, Kate would be considered a partner in this business enterprise. She plays a major role within the enterprise and should be considered a partner. Furthermore, she is also legally obliged and responsible for the $9,000 owed to Australian Truffle Delicacies.

Question 2


The issue in this situation is whether Damien had learnt and also understood the terms of the contract; the terms of a contract that were not met by Cassandra for him to purchase a new motorbike


Basically, there are principles that govern a business when a contract has been made or offered. The four principles to show whether the offeree was familiarized with the terms of contract as given by offeror generally include the offer, acceptance, consideration, and the intention to create legal relations (Bu 2015, p.110). The first principle, that is offer, suggests if a person is interested in a contract. The acceptance principle states terms to agreement to the terms of the offer. The consideration principle is the bid to make an agreement that is subject to bargain that the holder of the offer has to get something in return. Finally, the intention to create legal relations is to ensure that with the implementation of the stated principles, a contract is achieved; for both legal purposes and also for purposes of formality.


Damien meets Cassandra and expresses his willingness to contract on the motorbike. Cassandra offers to assist Damien purchase a new motorbike made in Japan. Majorly, the terms of the contract are both express and implied. The expressed terms are those stated expressly by both parties which include written and also oral terms. Whereas, implied terms are those done into the contract by courts for reasons such as completion of a particular trad, statute; if the seller transfers ownership of the goods legally, and to document so as to know a partnerships’ intention.

The terms of the contract used in the case of Damien and Cassandra were orally expressed. Cassandra meets Damien at the local dealership and offers him a CBR1000 model and its price including a stamp duty. Damien shows interest based on the information availed. The two parties make a deal and Damien accepts the terms of the offer, and agrees to make full payment for the deal. Damien also shares his address for the purpose of delivery of the motorbike at the desired location.

Moreover, an offer needs to be accepted according to the established terms. The contract was formed hurriedly when the parties met face-to-face. Some states enforce a promise that is gratuitous. Therefore, if the individual expecting fulfillment of the promise, invests their trust in the promise while being in other states, consideration is not required. Damien says that he likes the Japan-made motorbike since they are well made and their custom parts are easily available in case there is need to service and repair. Cassandra makes an offer and states that the price is $17,000. Damien agrees to buy the base model.

Ultimately, the intention to create legal relation is evident regarding the two parties in the scenario. Damien and Cassandra finally do business after all the principles of a contract such as offer, and consideration and acceptance are properly implemented. Immediately the bike is delivered, Damien notices that there are a few errors with the delivery, such as a missing helmet, a different origin of the manufacturing and assembling company, and a different outlook of the bike. The bike in question was made in the USA, opposed to the purports that it was made in Japan. Damien also notices that the item was not the black bike he saw in store. Damien does not believe that the item in question is a good bike. Therefore, it is clear that the contract was not done effectively and Damien could terminate the contract.


The terms of the contract were not fully met by the “offeror” who in this case is Cassandra. The principles were equally not put into practice as per the contract law, therefore, Damien participated in the contract out of ignorance.

Question 3


The issue is whether Sarah is entitled to the claims she makes of acquiring the floor that contain traces of gluten from Vincent Lee, and terminate his contract.


Notably, an employer or employee may terminate the employment contract according to the set regulations by Abu Dhabi Labor Law. Therefore if an employer decides to terminate the service of the employee, the employee must be notified in writing and given a prior notice.


There are set rules to help terminate a contract. Breach of contract is an offense that is punishable by law if either party involved in a contract commits the act (Eisenberg 2018). Therefore, it is of importance that the terms of a contract are met by both parties. However, in the event that either of the two parties in agreement fail to uphold their sides of bargain, then they are subjected to consequences of contract breach (Giliker 2016, p. 970). In this case, Vincent Lee breached contract by supplying flour that contains trace of gluten against the agreement set with Sarah.

Formulation of contracts might be accompanied by a few mistakes. Termination or nullification of a contract is allowed by the law. In this case, Vincent made a mistake by delivering flour and the sack had a tag stating that the machines that processed the flour were used for other grains, hence containing traces of gluten. Based on the findings, Vincent should know that Sarah is entitled to her claims.


Therefore, putting all the set rules for contract termination into practice, it is evident that Sarah is entitled to the remedies she has claimed.


Bu, Q., 2015. Will Chinese legal culture constrain its corporate governance-related laws? Journal of Corporate Law Studies, 15(1), pp.103-125.

Eisenberg, M.A., 2018. Foundational Principles of Contract Law. Oxford University Press.

Giliker, P., 2016. Studies in the Contract Laws of Asia: Remedies for Breach of Contract, edited by Mindy Chen-Wishart, Alexander Loke and Burton Ong [Oxford University Press, Oxford, 2016, ISBN 978-0-19-875722-1, 536pp,£ 75.00 (h/bk)]. International & Comparative Law Quarterly, 65(4), pp.969-971.

Jones, H. and Benson, C., 2016. Publishing law. Routledge.

Winship, P., 2015. Drafting General Partnership Laws on the Aggregate or Entity Theory. SMUL Rev., 68, p.629.

December 12, 2023

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