Three good friends, Peter, Paul, and George, retire from their work as an accountant, pharmacists, and chemists respectively. They decide to start a herb farm. Peter and Paul contribute $150,000 each and George contributes $200,000 to establish the business. They lease a piece of land and build a greenhouse, and a barn to process and store the herbs. Part of the barn is to be used as an office. Peter uses his own personal computer for bookkeeping purposes. Peter, Paul, and George agree that all decisions relating to the management of the business would require the agreement of all of them. The financial aspects of running the farm are to be left to Peter. They decide to sell the herbs at the local Sunday markets. One day, Peter decides, on his own initiative, to buy an aerial water spray system from Water Sky Supplies Ltd in order to increase productivity. Unbeknownst to Paul and George, he owns 2% of the issued share capital of Water Sky Supplies Ltd. He did not consult the others about the purchase and bought the system on credit with finance provided by the company at a rate of interest five times the normal rate. Peter also received from the company a 5% commission on the contract. When the others found out, they were furious. 

Is the relationship between Peter, Paul, and George a partnership? Explain the reasoning behind your answer. Explain who, if anyone, is liable for the purchase of the system. What duties are breached?