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Problem 3

Brad, Patrick and Andrew have established separate advertising businesses. Brad and Andrew

operate as sole proprietorships. Patrick has incorporated a company, Patco Inc. to run his business.

Patco was recently the successful bidder for the production of a 2 year advertising campaign for Big

Beer Brewery (BBB). Since Patco did not have the resources to complete the campaign, he

suggested to Brad and Andrew that they complete the job together. All parties agreed that they

would devote their full time and attention to the contract for the next 2 years.

Brad, Andrew and Patrick agreed that although the contract, as signed, was with Patco Inc., they

would all contribute equal amounts of capital, staff and time and divide the profits equally, subject to

a commission fee of $50,000.00 which would be payable to Patco Inc. for arranging the contract.

The campaign was successful with each of the parties earning $250,000.00 each year.

Shortly before the 2 year period expired, BBB told Patrick that they would not be renewing the

contract with Patco. In response to Patricks inquiries BBB revealed that it has signed an agreement

with Bradco Ltd., a corporation recently formed by Brad, for advertising services for the next year

at a price of $250,000.00.

Andrew and Patrick come to you for advice and want to commence legal action against Bradco Ltd.

and against Brad for all profits that Bradco earns from the contract, and/or an injunction to prohibit

Bradco Ltd. from proceeding. Brad claims that since Bradco Ltd. is a new corporation, any past

dealings which Brad may have had do not apply to Bradco Ltd. and, in any event, there never was a

partnership between the parties and therefore all clients were up for grabs.

Required: Advise Andrew and Patrick whether there is any basis to commence an action against

Bradco Ltd. or Brad. Is Brad correct in asserting that there was no partnership? Both Andrew and

Patrick insist that they were partners with respect to all dealings, past and future, with BBB. Does

Brad have personal liability since it was Bradco Ltd. that signed the new contract? Brad owns a

large farm property in his personal name and set up Bradco Ltd. to protect the property. Be certain to

explain the applicable principles as part of your answer.

Would the situation be any different if Patrick was personally hired by the brewery as an in-house

employee in charge of advertising? Why or why not?

And just for mentionNo Plagiarism and just need ---picture form !--- (hand writing or screenshot !!! PLEASE

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