Grace Tarnavsky and her sons, Manny and Jason, bought a ranch known as the Cowboy Palace in

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Grace Tarnavsky and her sons, Manny and Jason, bought a ranch known as the Cowboy Palace in March 2019. The three orally agreed to share the business for five years. Grace contributed 50 percent of the investment, and each son contributed 25 percent. Manny agreed to handle the livestock, and Jason agreed to do the bookkeeping. The Tarnavskys took out joint loans and opened a joint bank account into which they deposited the ranch’s proceeds and from which they made payments for property, cattle, equipment, and supplies.

In September 2021, Manny severely injured his back while baling hay and became permanently unable to handle livestock. Manny therefore hired additional laborers to tend the livestock, causing the Cowboy Palace to incur significant debt. In September 2022, Al’s Feed Barn filed a lawsuit against Jason to collect

$32,400 in unpaid debts. Using the information presented in the chapter, answer the following questions.

1. Was this relationship a partnership for a term or a partnership at will?

2. Did Manny have the authority to hire additional laborers to work at the ranch after his injury?

Why or why not?

3. Under the UPA, can Al’s Feed Barn bring an action against Jason individually for the Cowboy Palace’s debt? Why or why not?

4. Suppose that after his back injury in 2021, Manny sent his mother and brother notice indicating his intent to withdraw from the partnership. Can he still be held liable for the debt to Al’s Feed Barn? Why or why not?

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Business Law Today

ISBN: 9780357634813

13th Edition

Authors: Roger LeRoy Miller

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