Question
After the failure of All Electronics Here,Michael and Janet start up a new business together as a partnership.Theyare both partnersin the business.Theyrun an online store
After the failure of All Electronics Here,Michael and Janet start up a new business together as a partnership.Theyare both partnersin the business.Theyrun an online store selling household appliances to customers around Australia.Theirpartnership agreement provides that Michael is responsible for purchasing stock from suppliers, and thatJanet is responsible for selling stock to customers via the online store.Michael has no authority under the partnership agreement to sell stock to customers,andJanet has no authority under the partnership agreement to purchase stock from suppliers.
While Janet is processing customer orders in the online store, she sees a wholesale advertisement for coffee machines at a very competitive price.The offer is only open for the next hour, and she isunable to contact Michael.Shedecides to purchase 100 coffee machines, on behalf of the partnership business, on ordinary credit terms.WhenMichael later finds out about the purchase,he isvery upset and tells Janet that she is solely responsible for the debt.
Explain whether Michael is also responsible for the cost of the coffee machines, according to the law of partnerships.Make sure that you fully explain your answer, and that you refer to relevant sources of law (cases and legislation).
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