PRINCESS Ltd. (P) began negotiations with Bowser Finance Ltd. (BF) (the finance company) and Kong Ltd. (K) (the landowner) to design and construct an outdoor recreation park and lodge with an off-road trail bike and quad-bike track in the Grampians. The agreement provided that:

• BF would finance the majority of the construction (via a mortgage) of the tracks and lodging on the mortgaged land from K;
• P would manage the design of the tracks and acquisition of trail bikes, quad-bikes and necessary safety equipment;
• P would manage the park;
• All the parties would share in the profits.

Without the knowledge of P, and prior to the tri-partite partnership agreement being signed, BF had agreed with K separately on another venture, to loan K a sum of money. In that agreement, there was a clause that stated that no profits on the recreation park agreement would be shared until K had repaid its loan. P is upset about this situation, as the venture has been very profitable, but it is now unable to claim its share of the profits because K has not yet paid off their original loan with BF.P wants to know what aspect of their partnership obligations can enforce the share of the profits immediately.

Advise PRINCESS

using IRAC