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Ezy and Frezy decided to put their passion for baking to good use and they eventually formed Exim Bakery and Caf to serve pastries and

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Ezy and Frezy decided to put their passion for baking to good use and they eventually formed "Exim Bakery and Caf" to serve pastries and cakes. They were short of cash so they asked their college mate Crezy, who is wealthy, to lend them RM50,000 for the business venture. Crezy agreed on condition that she gets paid RM5,000 per year from the gross returns of the shop and be informed on the progress of the business. She also wants to inspect the accounts. Last week, Ezy was showing her skills in making chocolate muffins in the kitchen and accidentally used diluted dish washing detergent in a bottle which she thought was vanilla essence. Tracy, a customer, bought and ate 5 muffins when it was still warm and fresh from the oven. She suffered severe stomach pain and had to be hospitalised. Recently, a company requested for Exim Bakery and Caf to cater for a tea reception. Without consulting Ezy, Frezy convinced the company that Exim Bakery and Caf is not able to take on the catering job and that she would highly recommend another caf who will cater to the request just as well. In actual fact, the recommended caf is a business that Frezy has just started with her boyfriend. They made a profit of RM50,000 for the catering job. Ezy was furious when she found out. (a) Does a partnership exist between Ezy, Frezy and Crezy? Discuss and support your answer with relevant principles of law. (13 marks) (b) Explain the ways in which this partnership can be terminated. (12 marks) [Total:25 marks) (Maximum: 800 words)

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