John and Jac met at a health resort. They quickly strike up a close friendship and realise they have a common interest in natural health and relaxation. Before long, they start planning a fantastic business idea. They want to design, patent, build and distribute mobile "Hammam Chambers." Hammam Chambers are intensely hot steam baths which are said to be fantastic for holistic physical and mental health. Neither John nor Jac have much money, although Jac's father is wealthy and is prepared to invest most of the money they need to get the business started.

The business was set up as a Victorian partnership. Unfortunately, there are some problems:

a) Apparently, selling steam baths without a permit is illegal. The police are investigating, and criminal charges are likely. In addition, several customers who burned themselves in the early versions of their Hammam Chambers are suing the business for negligence. John is a lawyer and told Jac he had looked into the legal issues and there was no legal problem with running this type of business. (5 marks)

b) Jac has ordered her dream car - a Shelby Mustang GT500 sports car worth $200,000 - which she claims she purchased on behalf of the partnership to use to tow the portable Hammam Chambers. John was not consulted and argued the partnership is not bound to go through with the purchase of the car. (5 marks)

c) And Jac's father is demanding access to the business records and accounts and is complaining about not getting a say in the way the business is being run. (5 marks)