Angela, Beth and Colin are all keen artists and decide to open a gallery to display their own work and that of other Scottish artists. They form a partnership. David, Beth's brother, who is a solicitor, drafts a partnership agreement. However, there is so much work to do getting their new premises (which they have leased) ready for the grand opening party, that only Angela gets round to signing the agreement. Colin decides to buy in some famous paintings to have on display at the opening party and he spends 100,000 of the 200,000 partnership budget on two paintings by JoLoMo.

Although the party was a great success, business is slow and Colin gets increasingly anxious and depressed about their financial situation. Eventually, after 6 months of poor sales, he resigns from the partnership on the grounds of ill health. Edward joins the partnership as a new partner. Business starts to pick up a little and four Vettriano paintings are bought in the space of a month by a mystery dealer called Mr X, who pays 50,000 for them. When Edward checks the partnership accounts at the end of the year, he discovers that they have debts of 500,000 and he decides to dissolve the partnership. In an attempt to clear their debts, Angela, Beth and Edward try to sell their remaining stock at auction. At this point, they discover that the JoLoMo paintings that Colin bought for 100,000 are only worth 10,000. Edward also discovers that the mystery dealer, Mr X, is in fact Angela, who has since sold the four Vettriano paintings for 100,000 and made a personal profit of 50,000.

Provide advice on the following issues:

What effect does it have that the partnership agreement is not signed by all three partners?

Can the lease of the gallery be taken in the name of the partnership? Would it make a difference if the partnership were based in England and Wales?

What is the legal effect of Colin's resignation?

Who will be liable for the loss Colin made on the JoLoMo paintings?

Are there any legal implications of Angela's dealings as a mystery trader?

Can Edward bring the partnership to an end, or does he need the consent of Angela and Beth? Who will be liable for the partnership debts?