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Question 2 Sue and Vicki enter into a partnership running a hairdressing business, and they operate under the name Sue and Vicki's Salon. However, business

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Question 2 Sue and Vicki enter into a partnership running a hairdressing business, and they operate under the name "Sue and Vicki's Salon". However, business is slow. The partners are told that potential customers are put off by the old fixtures and fittings of the shop. They decide that they need to expand the business into a full "beauty salon" and to improve the salon's appearance. For this they need to borrow $10,000 from the bank. The bank will not approve the loan unless they first reduce their monthly fixed expenses. Sue and Vicki each take a cut in salary and they enter into a written agreement with Joy, the receptionist. They reduce Joy's salary from $1,000 to $700 per week but in return, Joy will be called Salon Manager and will receive a 5% share of the profits of the business for as long as she is employed by the business. Sue and Vicki then sign the loan agreement with the bank and carry out the renovation. Joy feels that the salon should provide up-market beverages to its customers. She had been told that Vicki normally gets the beverages from the nearby Woolworths store because her daughter gets a staff discount there. Despite this warning, Joy signs an agreement, \"Joy as Manager of Sue and Vicki's Salon" to buy a cappuccino machine and a tin of organic coffee from The Grocery Store (an expensive specialist food business) with payment to be made in one month's time. The machine costs $2,000 and the coffee costs $40. Joy believes that the customers would love cappuccino from the new machine instead of the normal coffee that is served and she believes this will generate buzz in the community about the great ambience in the salon. When the bill comes in, Sue and Vicki refuse to pay and tells The Grocery Store that Joy knows she had no authority to purchase the machine or the coffee. Advise Sue and Vicki whether they have to pay for either of the products. Also discuss what action may be taken against Joy for disobeying instructions

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