MRL2601 Assignment 1 (ANSWERS)
Semester 2 2023 () -
GUARANTEED DISTINCTION
Good grades 2023.
QUESTION 1
Two partners who are practicing as dentists, Susan and Jane, decide to dissolve their partnership by
agreement. The partnership agreement is silent regarding the goodwill of the partnership...
Two partners who are practicing as dentists, Susan and Jane, decide to dissolve their partnership by
agreement. The partnership agreement is silent regarding the goodwill of the partnership. Jane
continues practicing as a dentist and de facto takes the partnership’s clients (valued at R1 million)
over for her own benefit. Susan feels it is unfair that Jane has taken over all of the clients and wishes
to institute a legal action to claim her part of the goodwill. Explain whether there is a remedy to
Susan’s disposal in these circumstances. (Your answer should not exceed ½ a page) (5)
QUESTION 2
Name (do not discuss) five (5) different reasons for which a partnership can be terminated. (Your
answer should not exceed one ½ a page) (5)
QUESTION 3
Explain the difference between the two types of trusts are envisaged in the Trust Property Control Act
57 of 1988. (Your answer should not exceed one ½ a page) (5)
QUESTION 4
Briefly explain what the purpose of the establishment of a trust is and what parties are involved in a
trust. (Your answer should not exceed ½ a page) (5)
, QUESTION 1
Two partners who are practicing as dentists, Susan and Jane, decide to dissolve their partnership by
agreement. The partnership agreement is silent regarding the goodwill of the partnership. Jane
continues practicing as a dentist and de facto takes the partnership’s clients (valued at R1 million) over
for her own benefit. Susan feels it is unfair that Jane has taken over all of the clients and wishes to
institute a legal action to claim her part of the goodwill. Explain whether there is a remedy to Susan’s
disposal in these circumstances. (Your answer should not exceed ½ a page) (5)
Remedies for Susan in the Circumstances
In the given scenario, Susan and Jane are partners in a dental practice. They have decided to dissolve
their partnership by agreement, but the partnership agreement is silent regarding the goodwill of the
partnership. Jane continues practicing as a dentist and takes over all of the partnership's clients for her
own benefit, which Susan considers unfair. Susan wants to know if she has a remedy to claim her part of
the goodwill.
In this situation, Susan may have a remedy to claim her share of the goodwill. Goodwill refers to the
reputation and customer base of a business, which can have significant value. When a partnership
dissolves, the partners usually have a right to their share of the partnership's assets, including goodwill,
unless otherwise specified in the partnership agreement.
Since the partnership agreement is silent on the issue of goodwill, Susan can argue that she is entitled to
a portion of the goodwill based on the principle of fairness and equity. She can claim that the goodwill
was generated during the partnership and should be divided between the partners in a just and
reasonable manner.
To pursue her claim, Susan can consider the following legal remedies:
1. Negotiation and Mediation: Susan can try to resolve the dispute amicably by discussing the issue
with Jane and attempting to reach a mutually acceptable agreement. Mediation can also be used to
facilitate the negotiation process and find a fair solution.
2. Legal Action: If negotiation fails, Susan may choose to institute a legal action against Jane to claim
her share of the goodwill. She can seek a court order for the division of the goodwill based on the
principles of equity and fairness.
3. Accounting and Valuation: To determine the value of the goodwill and Susan's share, an accounting
and valuation process may be necessary. This involves assessing the value of the partnership's client
base and determining the proportionate share of each partner.
4. Equitable Remedies: In some jurisdictions, courts may have the power to grant equitable remedies
such as an injunction or specific performance. Susan can explore these options to protect her rights
and ensure a fair distribution of the goodwill.
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