Exam (elaborations)
MRL2601 Assignment 1 Semester 2 2023 (588435)
- Institution
- University Of South Africa
MRL2601 Assignment 1 Semester 2 2023 () QUESTIONS WITH ANSWERS
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MRL2601Assignment 1
Semester 2
2023
(588435)
QUESTIONS AND ANSWERS
[School]
[Course title]
, MRL2601 Assignment 1 Semester 2 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. 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)
In the given scenario, Susan and Jane are dentists in a partnership that is being
dissolved by mutual agreement. The partnership agreement does not address the
issue of goodwill. After the dissolution, Jane continues practicing and takes over
all the partnership's clients, valuing R1 million, for her own benefit. Susan believes
this is unfair and 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 of
the partnership, despite the partnership agreement being silent on the matter. The
concept of goodwill refers to the value associated with the reputation and customer
base of a business. It is considered an asset of the business.
When a partnership dissolves, and there is no specific provision in the partnership
agreement regarding the treatment of goodwill, the default position is usually that
partners are entitled to their share of the partnership's assets, which would include
the goodwill. This means that Susan has a legitimate claim to a portion of the
goodwill that Jane acquired from the partnership's clients.
To pursue this claim, Susan can engage in legal action against Jane to seek a fair
distribution of the goodwill. The court would consider various factors, such as the
contributions of each partner to the partnership, their roles in building the clientele,
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