Shannon and Mitch run a service station in a country town, the service station sells petrol and a number of other goods, which are displayed near the cash register and outside the office. Shannon and Mitch are partners in the business, though they have an old written agreement that states that neither will order goods or services over the value of $1,000 unless the contract contains signatures from both partners.

Shannon has been approached by a supplier of magazines who offers the business the delivery of 100 copies of a particular publication each month. Shannon convinced that the magazine is popular and will make some money, signs a contract with a promise to pay $3,000 in instalments for the delivery of the magazines.

The magazines arrive and Mitch is very upset, first because the magazine is quite unsuitable for display in the business and may result in a loss of customers if they see this publication, but she is also upset that Shannon has made an agreement without consulting her. There is an argument between the partners and Shannon takes sick leave and stays at home to recover from the stress of the argument. In the meantime, Mitch communicates with the supplier of the magazines and declares that the agreement to supply the publication is invalid due to a breach of the partnership agreement, and that the magazines will be returned and no payments will be forthcoming from the business.

Explain, with reference to partnership law:

(a)Whether Mitch can cancel the contract with supplier of the magazines? (5 marks)

[Answer here]

Whether Mitch can be liable for the actions of Shannon?