Question

Is Taylor correct in her claim? Will Roberts and Hull have to pay her a share of their surplus cash? Explain.

Business Law with UCC Applications 15th edition Chapter 25

Case #2
Kerry Taylor owned a warehouse in the industrial flats of Parke Central City. Yale Roberts and William Hull were partners in a chain of restaurants called Pirate's Seafood Carousel. Roberts and Hull leased Taylor's warehouse for their restaurant. As part of the agreement, Taylor received $7,500 in rent each month. Taylor retained office space on the top floor of the warehouse. She also agreed to allow Roberts and Hull to remodel the rest of the warehouse to meet the needs of their new restaurant. Taylor occasionally offered advice about the remodeling of the warehouse. In addition, Taylor frequently signed for shipments that Roberts and Hull had ordered for the restaurant. After 5 years in this location, and after selling their restaurants, Roberts and Hull decided to dissolve their partnership. During the winding up process, they were surprised to learn that Taylor claimed to be a partner in Pirate's Seafood Carousel. Is Taylor correct in her claim? Will Roberts and Hull have to pay her a share of their surplus cash? Explain.

Answer 1

After going through the above case, we can conclude that Taylor is wrong to claim for the surplus cash. This is because she is not a business partner.

Further details are mentioned below:

• ·The act of leasing a property or allowing people to use your space can be viewed as just a business deal or as an agreement, and cannot be considered as a partnership because no legal agreements relating to provide share of profits is not created.
• ·in the above-mentioned case, agreements for leasing property are only made and not regarding sharing of profits. Roberts and Hull can also argue that they are the only legal partners of that property and the ones to have rights to share the profits.
• If a person is to be considered as a partner, initially, there should be an agreement which is created legally with others pertaining to how control as well as splitting of money will be done. There is no necessity that it should be in writing.
• ·Hence, this cannot be considered as a partnership and therefore, Taylor cannot claim for surplus.