Exam (elaborations)
MRL2601 Assignment 1 2023
- Course
- MRL2601 Assignment 1
- Institution
- University Of South Africa
MRL2601 Assignment 1
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MRL 2601Assignment
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JIMMY COSMAS
@JIMMYCOSMAS46@GMAIL.COM
, 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, since the partnership agreement is silent regarding the goodwill of
the partnership, specific legal principles will likely come into play to determine whether
Susan has a remedy to claim her part of the goodwill.
The concept of "goodwill" in a partnership refers to the intangible value of the business,
which includes its reputation, customer base, and overall market position. In the absence
of a provision in the partnership agreement, the treatment of goodwill may depend on
the governing law in the jurisdiction where the partnership is located. In some
jurisdictions, the law may imply certain default rules regarding the treatment of goodwill
upon the dissolution of a partnership.
In cases where the partnership agreement is silent on the issue of goodwill, it is
generally the norm that the goodwill is considered an asset of the partnership itself, and
its value should be shared by the partners in proportion to their respective ownership
interests in the partnership. In this situation, Susan would have a legitimate claim to her
share of the goodwill, which would be valued at a proportionate amount relative to her
ownership in the partnership.
To seek her remedy, Susan could potentially file a legal action against Jane for an
equitable division of the goodwill. The court would likely assess the value of the goodwill,
and depending on the jurisdiction and the evidence presented, may order Jane to
compensate Susan for her rightful share of the goodwill taken over by Jane for her sole
benefit.
However, it's important to note that the outcome of such legal action may vary based on
the specific laws and regulations of the jurisdiction in which the partnership operates.
Therefore, Susan should consult with a legal professional experienced in partnership and
business law to understand her rights and the best course of action in pursuing her claim
to the goodwill.
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) \
Five different reasons for which a partnership can be terminated include:
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