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Partnerships

In: Business and Management

Submitted By jerseygirl66
Words 936
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INTRODUCTION
On the face of it, Jack, Jill and Marco have formed a partnership and based on their draft agreement should share equally the $200,000 annual royalty paid by Hyper Games Ltd for the exclusive licence of the game they developed between themselves. However, if circumstances are analysed in conjunction with relevant partnership legislation, the Partnership Act 1963 and precedent case law it becomes less clear that there is a partnership between the three.
The issues arising, that raise doubt as to whether Marco should be entitled to a one third share of the annual royalty are:
• Jack and Jill had already developed an early version of Galactic Explorer, before Marco’s involvement and he only ‘assisted’ and added concepts to the game.
• Can the draft agreement be relied upon to prove the intention of the three partners was to share equally any profit from the sale of the licence
• The draft agreement which had not been signed by Marco, stated that Marco only provided assistance.
• Marco had not attended any meetings with Jack and Jill for three months prior to Jack and Jill granting the exclusive copyright licence to Hyper Games.
• The contract with Hyper Games was only with Jack and Jill.

A) WOULD MARCO BE ENTITLED TO SHARE THE PROFITS WITH JACK AND JILL?
Marco would only be entitled to an equal share of the royalty if it can be proven there was a partnership arrangement between the three of them and in order to establish whether this was the arrangement it is necessary to refer to the Partnership Act 1963 and previous case law.
APPLYING THE PARTNERSHIP ACT 1963 and PREVIOUS CASE LAW TO THEIR CASE:
A partnership is NOT a separate legal entity like a company. Each partner is an individual and bound to other partners by the partnership agreement whether written oral or implied. There are no special formalities – just carrying on business in

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