Peter and Michael, both Monash College lecturersand drone enthusiasts, are interested in making some extra money. Michael found out thatdrone wedding photographyare becoming more popular andsawanopportunityfor capitalising on this trend.Needing extra capital to help start the business, Michael engaged with Emir to lend them $50,000. Afterwards, Peter and Michaeldecided tobuy the DJI Inspire 2Cinema Premium for $35,000and marketed themselves asBlitzwed.

Peter and Michael started out small, but through word of mouth thesizeof their businesshas exponentially increased. Bookings have increased to the point where the whole year is reserved! They have also employed their owntechnician and secretary to help them with the increased business.

Although both Peter and Michael fly the drone, they also have their own roles in the business.Peter is responsible for marketing,whileMichaelmanages the financial accounts and the purchases. They both keep appropriate records of all accounts and transactions.Emir on the other hand does not participate in the management of the business although he sometimes flies the drone for his own enjoyment.

Their agreement (though unwritten) is:

1. Both Peter and Michael have contributed equally in establishing the venture andagree that Peter is to receive 50% of profits and Michael 30%. (This is to reflect the fact that Peter has extensive marketing experience).
2. The remaining 20% of the profits will be paid to Emir in lieu of the debt owed to him.
3. Any purchase of goods or services of more than $1,000 must be agreed to by both partners.

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Advise Peter,Michaeland Emir:

1. What business structure are the parties operating? Explain why using relevant statute and case law.[HINT: Use section 5]

1. Who are the partners of the business?[HINT: Use section 6]

1. Whether Peter and Michael are required to formalise the agreement into a written contract?[HINT: use the normal principles of contract lawas no section says agreement must be in writing]

1. Whether Peter and Emir are permitted to share the profits disproportionately (not equal) between each other?[HINT: see section 28]

Without consulting Peter,Michael engaged in two transactions while acting as a partner.

Firstly,Michael engages a professional painter to repaint hisMercedesBenz that he exclusively drives to Phillip Island for day trips.Before Michael had his car repainted, he showed his business card to the professional painter, which describes Michael as a Partner ofBlitzwed.The cost of the paint job is $3,000.

Secondly,Michaelvisited the Melbourne Central DJI store to purchaseadditional drone batteries and accessories from Natalie, the usual supplier of drone parts forBlitzwed. Natalie was surprised when the total price of the parts totalled $1,500 and told Michael "You do know Peter showed me your partnership agreement and I'm pretty sure you need to talk to him if you're buying this much." Michael did not reply and paid for the parts before leaving.

Peter became furious when he discovered the invoices and argued Michael will have to pay for them instead since he was not authorised to.

1. Would Peter also be liable for the $3,000 paint job, and for the purchase of the drone accessories for $1,500? Examine under thePartnership Act.

[HINT: Given Michael did not have theexpressactual authority to enter into the contracts(the transactions)AND his unauthorised actions were not ratified(given approval after they are done), did he have theimplied normal authority(p435)as a partner to enter into the contract?

In your IRAC answer, you must considertheIssue:whether under s 9and s13, the transactions are in the usual way of the kind carried on by the partnership?

TheRelevant Law and Applicationmustaddress the following points:

1. Does the transaction relate to the type of business the partners are operating; and
2. Is the transaction enteredintoby the partner done in the normal or usual way for that type ofbusiness.

If both 1 and 2 are satisfied, then the partnership (firm) and other partners will bejointlyliableunder section 13UNLESSS:The third party (the painter and Natalie) knew or suspectedthe partner is not a partner OR knew the partner did not have actual authority tomake the transaction.]

To make a little extra money, Michael has been taking theDJI Inspire 2(without Peter's permission) totake artistic photos of landscapes.One of his photos attracted a buyer and was sold for $1,000.Peter later found out when he sawa promotional ad of Michael flying the DJI drone.

1. Advise Michael whether he has the lawful right to retain the profits derived from using the DJI Inspire 2 without Peter's permission

During a client's wedding ceremony, Michael (who was piloting the drone) accidentally crashedthe DJI drone onto the groom- causing horrific medical injuries andthe cancellation of the wedding. It was later found that Michael had too much alcohol to drinkbefore flying the drone, and his drunken state ultimately caused the incident. The clients and the property owner plan to act againsttheBlitzwedforthe incident.

1. Can Peter and Michael be found liable for the crash? Examine under thePartnership Act

1. If David joins as a new partner, will David be liable for old debts?

1. If Peter decides to leave thepartnershipwill he still be liable for old and new debts?

1. What advice wouldyourgive Peter to make sure he is not liable if he leaves the partnership?

1. If the partnership ends (dissolved), what happens to thepartnership property? Can Peter keep the drones?

No minimum wordcount + I need IRAC answers