question_answer

X, Y and Z are partners. They are engaged in catering business. Whenever someone approaches Mr. X for a catering contract, he does not declare it to other partners and manages to handle it alone so that he can enjoy all profits. Gradually, he becomes very well off. He starts a joint stock company which organizes events for corporate. He withdraws himself from partnership and Y and Z continue to do their business.

(a) Which feature of partnership is highlighted in above case?

(b) Which values are lacking in Mr. X?

(c) What action can Mr. Y and Mr. Z take against Mr. X?

Answer:

Ans.     (a) Mutual trust

(b) (i) Honesty

(ii) Concern for others

(iii) Loyalty

(c) Mr. Y and Mr. Z can force Mr. X to hand over all the profits earned from these personal contracts in the partnership firm and compensate them for breach of trust.