Business Law Essay

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Law of Business Organisations | 1. Melanie and Carol Melanie and carol conduct a beauty salon business. Melanie is responsible for performing the beauty treatments and carol is solely responsible for providing and packaging the beauty products for sale. Polly, a friend of both Melanie and carol’s, agreed to lend them $10,000 to get business started. Profits are to be shared between Melanie and carol equally. Claire purchased a beauty lotion from the business recently. She complains that the lotion she bought has caused her severe facial burns, leaving her unable to work for several weeks. Tests have revealed that the lotion contains chemicals likely to cause harm if applied directly to human skin. Unfortunately, when Carol was preparing the lotion for bottling she allowed a quantity of corrosive industrial cleanser to be mixed into the lotion. Claire is seeking $150,000 damages to cover medical expenses, lost wages and considerable pain and suffering. Carol has no money and Claire wants to claim against Melanie and Polly. Melanie and Polly claim that the negligence and breach of contract is solely the responsibility of Carol. Issue This question revolves around the partnership form of business where by Melanie and Carol is in partnership with each other and conducts a beauty salon business. Claire has sued the firm for wrongful act of Carol. Rule Definition of Partnership The word partnership is generally used is business word but unlike ‘company’ partnership can be set up informally (no formal agreement is necessary) by just doing business together. Also partnership is not a separate legal entity like a company therefore partners can be sued jointly and separately as well in case of any wrong doing. Also do not pay tax but individual partners pay tax on their share of profit. Under the s 5(1) of the Queensland Partnership Act 1891,

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