Legal Questions

Read the following facts. Using only principles, concepts and law discussed in BUSN1019 (including the Partnership Act 1891 (SA)), answer each question:

Re-read the “Notes on Answering Legal Questions” commencing on page 14 of the Topic
Guide and Barron pages xxii – xxiv (7th Ed). Conciseness of expression is important in
answering this assignment, so please do not exceed the word limit! Answer all questions.
Clearly number each answer to each question. All assignments must contain full
acknowledgement of sources and failure to adequately reference sources via footnotes, and
include a Bibliography at the end of the paper, amounts to plagiarism and will result in a
“Fail” grade for this part of the assessment. Use the “Business Law Style Guide”
commencing        on     page     60      of     the    Topic       Guide     or      see:
http://mulr.law.unimelb.edu.au/go/AGLC3.
If you wish to submit your assignment answer as part of a group:
(maximum of 3 students per group)
You have the OPTION of submitting your assignments on a group basis. Group work can
allow for the benefit of shared understandings and many people (but certainly not all), learn
better if they work with others. However, this is an option: if you do not wish to work in a
group, or have trouble organising a group to work with, you may simply submit your own
work for individual assessment.
If you wish to submit your assignment answer as part of a group:
1. Select your own group of 2 or 3 people (no more!).
2. All members of the group should sign their own cover sheet (including the word
count) and all cover sheets should be stapled (in family name alphabetical
order) to the front of the assignment.
3. Lodge ONE COPY ONLY of the assignment with 2 or 3 coversheets (depending
on the size of the group) attached in family name alphabetical order.
4. One mark will be allocated for the assignment and this will be the mark assigned
to each group member.
5. Group management issues are the responsibility of the members of the group and
not the teaching staff. Remember: whatever one member contributes to the
assignment, and any consequences that flow from that contribution, is the
responsibility of the group and all members must bear the consequences.
6. If you have difficulty locating others who might like to work in a group with you,
use BUSN1019’s FLO’s discussion board to nominate your interest and locate
others who might live near you or otherwise be likely candidates to work with you.

Read the following facts. Using only principles, concepts and law discussed in BUSN1019
(including the Partnership Act 1891 (SA)), answer each question:

Helen Wong is atalented fashion designer who has recently wona number of awards in fashion design in Australia.She has  been dreaming of setting up her ownline.Her

Former design  teacher  Mario,being impressed by the recent achievement of his starstudent,suggests that they set up a business together. Mario’s idea is that Helen

should assist him in designing luxurious clothing for a niche market, the target  being young famous movie stars and  young top models who need exquisitely designed

clothes for special occasions. Helen should be mainlyresponsible For approaching potential clients to find out what they need and make sketches  to  be approvedby

Mario  and to be produced upon Mario’s approval. Mario suggests  that the as the scale  of the business will probably  be  mall,  they  should  hire Mario’s  friend

Peter to  be in charge of the    accounting      and administration  work. The proposed  business  will  be run out of  Mario’s    property  which is in a

commercial building      .

1.
Helen asks you for advice on  the most  appropriate form of  business  structure for the proposed  business. Advise  Helen  on the  options  in  respect  of

business structures, the advantages and  disadvantages of     each structure and your Recommendations.Helen and Mario have finally decided to set up their  business

as  a  general  partnership and  would  like  to call  their  business  “chic couture”. Helen and Mario  have  decided that Helen  will  be  responsible for  buying

the office equipment and  equipment  for  sketching designs while    Mario will be  responsible  for  sourcing  and     buying  fabrics and all the  necessary

accessories for  producing clothing  for  clients. It  was agreed  that     neither  of them  could make  any  single  purchase  above  $3,000  without     the  other’s

consent.

2.Advise Helenon what she needs to do to establish this partnership.THe  business is a success and continues      to flourish. Helen and  Mario decide to go on a

business trip to Europe to watch fashion  shows and get to know      more fashion icons in the hope of expanding their clientele. As Peterhas to leave Hong Kong to take

care      of ome important family affairs he will    also  be away from office.Helen and Mario Thereforedecides  to entrust      their neighbor  Mr. Lee     with

the keys    of the    office and ask him to keep watch  of their Office while      they      are away.  While they are gonethere is a fierce typhoon and  the windows in

the    office  is broken by the wind      when  the typhoon signal no. 8 is  hoisted. Mr. Lee sees the broken Window and tries to    call Helen and      Mario      to

let them know about it. He is unable To get through to either Helen or Mario on their Mobile     phone so      he arranges for    one of his friends, who    is a

local contractor, to put a    board over the window and seal it to      ensure no more  water can getinto the office.Unfortunately this work occurred on a  public

holiday  so      the  builder      charged  twice his usual rate. He gives Mr. Lee an invoice of $2,000. Helen returns from the business      trip a    few days before

Mario.When she    returns,Mr.Lee    Gives her the Invoice from the    Contractor  . While     thankful that  Mr. Lee    helped to make arrangement to protect the office, she

is shocked at the large amount  of
the invoice  and  believes she    should not have to pay it.

3. Advise Helen    whether the partnership    needs to pay the amountstated on the invoice from the contractor.    While Mariois stillin Europe, Helen receives a    large

order for    dresses    from a generous    client and Helen needs      to purchase a high performance computerand  the appropriatesoftware from High Tec Supplies  Pty Ltd.

to do ketches
for  this client  within a short period     of time. The high performance computer and the    software will Costs  more    than $3,000. As     the client has    set Helen a

deadline formaking the sketches and    Helen wants to show them  to Mario    for approval when he comes back    in a few days, Helen proceeds to purchase he computer

and software for$3,500  without  consulting Mario.Subsequently  the  order  from the generous client  falls through  and Helen and  Mario    do not want to pay the

bill from High Tec Pty Ltd.

4.  Advise on the position ofHelen, Mario and Mar Mario Art in relation     to the    2,500 bill from     Art Supplies Pty      Ltd.On her business trip to Da Fen,Mario

discovered  that high quality artworks could be produced  by  Chinese  artists      at significantly less cost than the artworks produced  byHelen.  Mario therefore

stablished a business producing reproduction artworks paintedby Chinese artists. Mario felt that Helen did not have anything tocontribute to this new business, and she

did not want    to hurt Helen’s    feelings, so she did not mention
This  new business venture to Helen.  However,  Helen  subsequently discovers Mario’s  involvement in the new    business. She also discovers that it was Mario’s  new

business that ultimately won the contract to supply  the    artworks  for  the  large  new office  building.

5. Advise Helen what, if any,rights she may  have arising from the above.Following the difficulties between Helen and Mario discussed above, they decide that they can

no longer continue in Business  together. They  agree  to end the MarMario Art partnership. Mario leaves all the art supplies with Helen but takes all the office

pplies.
In addition, over the period of    the partnership, the art studio apartment has increased    in value due to a property boom.Mario  argues  that she is entitled to a

share of that increased    alue.

6.  Advise Helen on the distribution of    assets upon the    dissolution of Mar Mario  Art.

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