Sunday, June 1, 2014

Waugh v. Carver case brief summary

Waugh v. Carver case brief summary

Facts:  Two ship agents had no intention to be partners, They were nevertheless held as such for the following reason: “He who takes a moity of all the profits indefinately shall, by operation of law, be made liable to losses, if losses arise, upon the principle that by taking a part of the profits, he takes from the creditors a part of the fund which is the proper security to them for the payment of their debts.

o   Despite this case a distinction was drawn between taking profits “as profits” (ie owners ) and taking profits as wages.
-          There are more partnerships than corp, but larger GDP is brought in by corps.
o   hedge funds
o   law partnerships
-          LLP: differ in only respect a limitation of liability
-          There are a lot of joint ventures. What is a joint venture? Is it a partnership?
o   Majority view: joint ventures are partnerships or they are dealt with as such. 
o   Many times happens when one corp. enters into shared transactions with another corp.
o   Joint ventures:  few distinctions except that they are isolated transactions verses continuing enterprises. And t/f the liability under tort and contract may be restricted. But many times partnership law is applied.
§ In one case, “Although the profits of each were dependent upon the overall success of the development, neither was to share in the proffits or losses that the partner might realize or suffer. Although each received substantial payments . . ., neither had an interest in the payment received by the other.”
-          Inherently the partnership is a contractual relationship; hence there can be a lot of variance.
o   There are mainly statutory provisions which are basically default rules (except for fiduciary duties that cannot be contracted away)

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