Mutual Obligation In Partnership Law

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Partnership is one of main business vehicles nowadays, which rooted its legal form in Italian medieval times . The soundness of relationship between partners is a vital determinative in the sustainability and prosperity of the common business. Partnership law regards both common law and the statutes. Disputes in connection with or arising out of the rights and obligations of partners are not uncommon. As to the role and function of partnership law in this respect, one proposition sets out “As regards the mutual obligations of partners, partnership law does little more than prescribe the presumptive contractual obligations one partner owes to another.” In this essay, rules regards the presumptive contractual obligation will be verified by enumerating…show more content…
“Obligation” is perceived equivalent to and interchangeable with “duty”. “Partnership is the relation which subsists between persons carrying on a business in common with a view of profit” . “Every partner is an agent of the firm and his other partners for the purpose of the business of the partnership; the acts of every partner who does any act for carrying on in the usual way business of the kind carried on by the firm of which he is a member bind the firm and his partners” . Obligation of a partner refers to obligation owed to any other partners or obligation owed to the firm. Mutual obligation of partners regards both, the former one is apparent, the latter one arises from after a partner undertook the obligation to indemnify the debt incurred, contractually or tortiously, by any other partners or partnership itself, any other partners shall assume the obligation to indemnify (“secondary rights and duties” ) the partner for the amount. Besides, partnership property, retirement of partners, winding up of partnership, assignment of shares also reflects and invokes undertaking or variation of mutual obligation, however, little endeavor will be rendered herein in discussing obligations under these…show more content…
In this term, partnership is essentially contractual. ECJ addressed that contractual obligations encompass “ obligations freely consented to by one person towards another” . Mutual obligation of partners prescribed in the agreement indicates the intention and consent to submit each partner to it. Therefore proposition is right about the contractual attribute of obligation provided where contract law is applied as a legal institution to address partnership

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