Leyton and Dustin run a service station in a country town, theservice station sells petrol and a number of other goods, which aredisplayed near the cash register and outside the office. Leyton andDustin are partners in the business, though they have an oldwritten agreement that states that neither will order goods orservices over the value of $3,000 unless the contract containssignatures from both partners.
Leyton has been approached by a supplier of magazines who offersthe business the delivery of 100 copies of a particular publicationeach month. Leyton convinced that the magazine is popular and willmake some money, signs a contract with a promise to pay $5,000 ininstalments for the delivery of the magazines.
The magazines arrive and Dustin is very upset, first because themagazine is quite unsuitable for display in the business and mayresult in a loss of customers if they see this publication, but heis also upset that Leyton has made an agreement without consultinghim. There is an argument between the partners and Leyton takessick leave and stays at home to recover from the stress of theargument. In the meantime, Dustin communicates with the supplier ofthe magazines and declares that the agreement to supply thepublication is invalid due to a breach of the partnershipagreement, and that the magazines will be returned and no paymentswill be forthcoming from the business.
Explain, with reference to partnership law:
- Whether Dustin can cancel the contract with supplier of themagazines?
[Answer here]
- Whether Dustin can be liable for the actions of Leyton?
[Answer here]
