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Question
Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer.
Legal Principle: Every partner is liable alone and jointly with other partners for the debts of a partnership firm incurred for the business. Every partner is an agent of every other partner while being a principal in his own right in the business of the partnership.
Fact Situation: Varun is a partner in a firm with Chinmoy and Jaffar. Jaffar purchases a car for his personal purpose and obtains credit for the same in the name of the partnership behind the back of the other partners. He fails to pay the due amount on the expiry of the period of credit.
Which of the following statements is the most appropriate in relation to the legal principle stated above?
Options
Varun, Chinmoy, and Jaffar are liable to pay for the car since they are partners and the credit was obtained in the name of the firm.
Varun and Chinmoy are not liable to pay for the car since Jaffar purchased it for his personal purpose.
Varun, Chinmoy, and Jaffar are liable as partners for all credit obtained in the name of the firm even if it is for the personal purpose of a partner.
Jaffar can use the credit of the firm to make purchases even for personal purposes since he is a partner in the partnership.
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Solution
Varun and Chinmoy are not liable to pay for the car since Jaffar purchased it for his personal purpose.
Explanation:
Every partner is an agent of the firm and his other partners for the purpose of the business of the partnership, and the acts of every partner who does any act for carrying on in the usual way business of the kind carried on by the firm of which he is a member bind the firm and his partners unless the partner so acting has in fact no authority to act for the firm in the particular matter, and the person with whom he is dealing either knows that he has no authority or does not know or believe him to be a partner. In the light of the given legal principle and explanation provided above it is clear that Jaffer purchased the car for his personal use and obtained credit for it acting outside his authority behind the back of other partners, he was not acting as an agent of the company or as the partner to Varun and Chinmoy but was acting on behalf of himself and for a personal motive. Hence other two partners are not liable to pay. leading option (2) is the most appropriate statement
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Apply the legal principles to the facts given below and select the most appropriate answer.
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1. A contract comes into being from the acceptance of an offer, When the person to whom the offer is made signifies his assent thereto, the proposal is said to be accepted and the parties are at consensus and idem regarding the terms of the agreement.
2. Consideration is something that moves from the promise to the promisor, at the implied or express request of the latter, in return for his promise. The item that moves can be a right. interest, profit, loss, responsibility given or suffered, forbearance, or a benefit which is of some value in the eyes of law.
3. Contractual rights and liabilities are exclusive to the parties to contract.
4. There are few exceptions to the doctrine of privity of contracts like agency, trust, assignment, and third party beneficiary.
5. A quasi-contract is a contract that is created by the court when no such official contract exists between the parties to prevent a party from being unjustly enriched, or from benefitting from the situation when he/she does not deserve to do so.
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II Only a person who is a party to a contract may demand the execution of that contract from other parties. But if there is a third-party beneficiary to the contract then it is enforced to the extent of his\her benefit.
III. The agreement is valid as both Reena and Subhashini agreed to it on the same thing in the same sense.
IV. There is no privity of contract as Subhashini has furnished no consideration. Reena had promised to Subhashini but consideration was furnished by Nandini.
