Question
Jamie, Harrison, and Raine are good friends who decide to start up an online shopping website - JHR Fashions - as a partnership. Their business
Jamie, Harrison, and Raine are good friends who decide to start up an online shopping website - JHR Fashions - as a partnership. Their business sells second-hand designer clothing. The friends decide that as Jamie and Harrison each have an IT background, they will be responsible for the technical side of developing the software that runs the website. Raine, a fashion designer by profession, is responsible for buying second-hand designer clothing from selected suppliers in Melbourne. The partnership agreement limits Raine to purchasing clothing up to a maximum of $10,000 in any single transaction. The partnership agreement confirms that Raine is the only partner with authority to purchase stock.
During the Easter holidays, Jamie visits his sister Kate in Sydney, who owns a designer clothes shop. She shows him an overstock of handbags and shoes in her shop and says 'look, these are new and in fashion, I can give them to you at cost price of $30,000 since they are overstock, and only because you are my little brother'. When the stock and the invoice both arrive, Harrison and Raine are furious that they were not consulted. They refuse to pay the invoice. Raine, based on his professional expertise, does not believe that the items are fashionable and does not believe that the partnership business will be able to sell them.
Are Harrison and Raine liable to pay the $30,000 invoice for the stock purchased by Jamie, according to the law of partnerships?
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