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Question 3 15 marks Three friends, If Y and Z decide to form a par'hiersbip to carry on a business trading in used cars. K

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Question 3 15 marks Three friends, If Y and Z decide to form a par'hiersbip to carry on a business trading in used cars. K has experience working as a manager and salesman. Y is a skilled motor mechanic. E is wealthy. The general idea is that 2 will he a sleeping parhier whose only role is to supply capital for the business. X will be responsible for sales and day to day management of the firm's business. \"If will be responsible for purchases of cars and repair work. The firm has a written parbiership agreement that contains the above information and further provides; I the firm will carry on business using the name XYZ Motors II profits and losses shall be shared equally I K and Y shall give their full time and attention to the business II Continuing parbrers shall be entitled to buyout any parhier wishing to retire at an agreed price or failing agreement on price at a figure determined by an independent valuer. After the firm has been in operation for several months 3 is served with writs for three legal actions. i) Customer sues E as a parbier in the rm EYE Motors claiming compensation for loss suffered in consequence of relying on false statements made by X when selling a car to Customer. ii} Dealer sues E as a partner in the firm EYE Motors claiming payment for two used cars purchased by X on behalf of the firm. iii) Buyer sues E as a partner in the rm RTE Motors claiming return of a 'reflmdable depositr paid to K on behalf of the firm when Buyer was considering purchasing a used car from the firm. Inquiries by E establish that allegations made in the three claims are all true. 2 also discovers that it had obtained reflmdable deposits from a number of prospective buyers and all the deposit money has been used by X in romancing his girlfriend. Advise 2 whether the claims made against him personally are likely to be successful

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