CASE STUDY 2

A Report
By
Mr. G.L.S Anuradha
SAB/BSc/2020A14/007

Course: Law 10125 Commercial Law

Mr. Padmasiri Fernando
Year 1, Semester 2

School of Accounting and Business

The Institute of Chartered Accountants of Sri Lanka
February 2021
In the study of this organizational structure it is clear that this organization
consists of three partners. It is also clear that they have run a successful business
with their contribution. Peter was hired as a new seller following the collapse
caused by the Corona epidemic in the meantime.
But Mr. Peter was recruited into the business only with the knowledge of one
partner. The other two partners are not aware of this.
When several partners come together to run a business, basic rules are needed to
govern it. The Partner Rules in force in Sri Lanka is the Partner English Law.
Here we discuss the laws that affect partners. Law of Contract, Law of
Partnership, Sales of goods act, Sales Agents recruitment process.
The of low of contact is a legally binding document between at least two parties
that defines and governs the rights and duties of the parties to an agreement. A
contract is legally enforceable because it meets the requirements and approval
of the law.
Law of Partnership
According to the partnership Act 1890 of England it is defined as “Partnership
is the relation which subsists between persons carrying on a business in
common with a view of profit”. There are several types of partnership
arrangements. In particular, in a partnership business, all partners share
liabilities and profits equally, if there is their own agreement it could be change
and also partners have unlimited liability. And also, it could be change if they
have own agreement.
The Sale of Goods Act 1979 is an Act of the Parliament of the United Kingdom
which regulated English contract law and UK commercial law in respect of
goods that are sold and bought. The Act consolidated the original Sale of Goods
Act 1893 and subsequent legislation, which in turn had codified and
consolidated the law.
When running a joint venture, you must deal with third parties. Since a partner
has the right to make business decisions, he or she can appoint an agent. but
specially mention to that decisions must be cooperate. if someone work himself
or making decisions alone in partnership it also some violation of partnership
agreement. In this case firstly we consider about new sales agent’s recruitment
it’s some violation situation or not legally acceptable process because, also in
this case we can see the sales agent’s recruitment is an illegal because David
didn’t issue to him any job letter or statement. The partnership is a well-
prepared reputed company so if someone add that company it must be legal
process, because partnership working under Sri Lankan accounting and other
acts policies. so, it's looks like a violation of some kind of contract or generate
an agreement without legal background.
Ex: Performing rights Society Mitchell & Booker Ltd. Y.G.de Silva Vs
Associated Newspapers of Ceylon
especially in this case that situation could be illegal, because it’s a registered
partnership and Mr. David informed all the customers to about new sales agent
so if any sales process the new agent would be the authorized person for it,
therefore this contract basis recruitment needs to be legal but is not like that,
that is the point how this contract violate.
Mr. Peter who is sales agent, was responsible for the incident between Mr. John
and Mr. Peter. Mr. David's mistake was not informing to other partners about
the new sales representative. However, Mr. Peter, the sales representative, is
responsible for all the customers and sales that take place within the business.
Ex: Demby Hamilton & corporation ltd vs Barden Robert A Munro & co. Vs
Meyer (1930)
So In accordance with that Peter is responsible for selling defective washing
machine.