Zoey owned and operated a dry-cleaning business as a sole proprietorship that she opened up with capital gifted to her from her parents. There were a couple of other dry cleaners in her town, but none offered same-day service. So do differentiate and increase her sales, Zoey decided to offer not only same-day service, but also same-day delivery service to local customers.

 

After researching the cost to hire an employee, Zoey decided to instead use a driver as an independent contractor to make her dry-cleaning deliveries on an “as needed” basis. Zoey did not personally know anyone who could do this work, so she searched the freelancers’ website “Fiverr” and found several drivers who make deliveries on a per-job-basis.

 

The driver profiles on Fiverr included their hourly and per-job rates, and also customer reviews. One particular driver on the list, named Brody, caught Zoey’s eye. Brody’s rates were the lowest among all other drivers, and about 80% percent of his customer reviews were a perfect 5 on a scale of 1 (low) to 5 (high). However, the other 20% rated him 2 or 1, citing incidents of bad driving, rude behavior, and treating customers’ property roughly. Furthermore, the website also reports that Brody was sued two times for negligent driving.

 

Nevertheless, Zoey hired Brody because of his economical rate and because he had his own delivery truck. When she hired Brody, Zoey told him that when making deliveries for the dry-cleaning operation, he is to place self-sticking magnetic signs advertising the dry cleaners on both sides of his delivery truck. Brody agreed, but because the pair of signs cost about $200-$300, he told Zoey that she would have to purchase them for him. Zoey responded that she was too busy, and that she would pay him for his extra time to purchase them but told him not to spend more than $300 for the pair.

 

Zoey then gave Brody one of her business cards – which had the store’s name on it – for the purpose of identifying Brody as acting for the store. On the back of the card, Zoey wrote, “This is my agent to purchase signs for my store.” Brody then went to a local sign maker’s shop, showed them the business card that Zoey gave him, and purchased a pair of custom-made signs for $600 on credit. As custom-made signs, they were not permitted to return or refund them. When the completed signs were delivered to Zoey, she became furious. She refused possession of the signs and also refused to pay the sign shop because the total cost exceeded her authorization by $300. Brody then made two smaller signs with the dry-cleaners’ name on them and, with Zoey’s approval, put them on his truck when making deliveries.

 

For the next three months, business went very well – so well that Zoey decided she needed help with the business. She asked her friend Franny, who had a lot of experience working as a dry-cleaner and a tailor, to join her as a partner. Franny agreed to do it, provided she would not have to pay anything into the partnership and that she was paid $500 per week salary as an advance to be drawn against her future profit distribution. They both agreed to this, with the further understanding that Franny would be a limited partner and that they would split the profits equally. They wrote up a partnership agreement accordingly.

 

Business continued to grow steadily, and it became necessary for Franny and Zoey to split duties – Franny tending to the front-end operations and be the tailor for the store, while Zoey managed the back-end finances and marketing. They agreed to discuss the operations of the store regularly, but at least weekly, to stay on top of all potential issues. Franny even convinced Zoey to expand into commercial dry-cleaning with delivery for local churches and private schools, and this grew the business even more.

 

Particularly, this added delivery service to private schools was a hit; so popular that Brody ended up working full-time on just doing the dry-cleaning deliveries. Although he still thought of himself as a freelancer, Brody’s work was exclusively for the dry-cleaner by this time.

 

One day, Franny called a customer and told him, “My driver is on his way to make a delivery to you in a truck with the store’s name on its side.” The customer kept watch at his window, and when he saw the truck with the store’s signs on it, he went out to the driveway through his garage. As he started to walk toward the truck, Brody negligently hit the accelerator pedal, causing the truck to hit the customer, who sustained substantial injuries.

 

This incident so thoroughly rattled Franny that she wanted out of the partnership.

 

Assume that there was an enforceable contract to buy the signs from the sign shop, and that the driver’s negligence proximately caused the customer’s injuries.

 

 

1. Was there a partnership here? Explain fully.

 

2. Who is (or is not) liable to the sign shop for the purchase price of the signs? Explain.

 

3. Who is (or is not) liable to the customer for the injuries resulting from the Brody’s negligence? Explain.

 

4. Assume there is/was a valid partnership, and Franny argues that she should not be liable for any of Brody’s negligence because Zoey hired Brody before Franny joined the partnership. Would Franny’s argument be successful? What counterarguments could Zoey raise?