Question
Maxine and Vince verbally agree to form a dog grooming partnership called XYZ Grooming. They file nothing with the state. Maxine puts up 80% of
Maxine and Vince verbally agree to form a dog grooming partnership called "XYZ Grooming." They file nothing with the state. Maxine puts up 80% of the capital needed for the partnership, and Vince supplies 20%. Maxine assumed that Vince would do extra work to account for the small amount of capital contributed by him, but that did not occur. Maxine found herself grooming more than 90% of the animals on her own while Vince primarily only busied himself with purchasing supplies. Maxine told Vince that he was only entitled to 10% of the profits because he was only doing 10% of the work. Vince disagreed, and a heated argument occurred. Maxine also discovered that Vince, in her opinion, paid an excessive amount for some dog shampoo. Maxine did not like the shampoo and told Vince that paying for the shampoo was entirely his responsibility because she had not agreed to the purchase. Maxine and Vince became aware of a lawsuit filed by the owner of a Welsh Pembroke Corgi complaining that the dog developed a skin rash following bathing by Vince in the expensive shampoo he had purchased, that he should have known the shampoo had been found to cause rashes, and that the owner lost money because the dog could not be entered into shows. Maxine told Vince that the litigation was entirely his responsibility and that she disavowed any liability to the plaintiff. How should the profits of the business be divided and why? Who is responsible for payment of the shampoo and why? Assuming that Vince acted negligently in using the shampoo, does Maxine have any exposure, and why or why not?
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