Suzy is retrenched from her job as a barista at a local coffee shop, so she decides to start up her own business. Suzy approaches her friend Selena to partner with her in this new venture and Selena agrees.

Suzy and Selena decide to open a mobile coffee stand which they will park in busy areas like the beach promenade, office parks and outdoor festivals. They decide to call the business Mugs and Mates.

Suzy has the skills necessary to manage the day-to-day operations of running a coffee shop and Selena has saved up enough to buy the equipment needed and has an accounting background, as well.

Suzy and Selena approach you to advise them on the form of enterprise they should start and how it works. You immediately advise them to start a partnership.

QUESTION 1

1.1 Assist Suzy and Selena in weighing out the pros and cons of forming a partnership by tabulating three (3) advantages and 3 disadvantages of such an enterprise. (8)

1.2 Draft a partnership agreement for Suzy and Selena that clearly sets out the essential elements of a partnership. Students can create details necessary for the drafting. (10)

1.3 Explain the concept of joint and several liability. (5)

1.4 List four (4) ways in which a partnership can terminate. (2)

QUESTION 2

2.1.Distinguish between indemnity insurance and non-indemnity insurance. (4)

2.2 List the elements of an insurance agreement. (4)

2.3 Contrast with examples affirmative warranties from promissory warranties. (4)

2.4 Identify 3 (three) instances in which an insurance agreement terminates. (3)

QUESTION THREE [10]

List and briefly explain the five (5) rights of a surety.