(Case Analysis) Kerry Taylor owned a warehouse in the industrial flats of Parke
ID: 2471016 • Letter: #
Question
(Case Analysis) Kerry Taylor owned a warehouse in the industrial flats of Parke Central City. Yale Roberts and William Hull were partners in chain of restaurants called Pirates 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, after the restaurant opened for business, Taylor frequently signed for shipments that Roberts and Hull had ordered for the restaurant. After five years in this location, and after selling there other restaurants. Robert and Hull decided to dissolve their partnerships. During the winding process, they were surprised to learn that Taylor claimed that she should receive a share of the surplus cash after the dissolution of the partnership because she claimed to be partner in Pirate’s Seafood Carousel.
Is Taylor correct in her claim? Will Roberts and Hull have to pay her share of their surplus cash? Explain.
Explanation / Answer
No. Taylor is not correct in her claim. Leasing property to an existing partnership or allowing people to utilise space for developing their business is not construed as a valid partnership claim, unless there is a written agreement to that effect.
In the above case, Taylor had only entered into an agreement with Roberts and Hull towards the leasing of her property for the partnership business. Hence, in the absence of any additional agreements, Roberts and Hull are not supposed to pay her any part of their surplus cash, and only pay the lease rentals due.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.