Clark was then to have the agreed value of the lot, and the profits were to be equally divided. Did a partnership exist?
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Clark, who owned a vacant lot, and Bird, who was engaged in building houses, entered into an oral agreement by which Bird was to erect a house on the lot. Upon the sale of the house and lot, Bird was to have his money first. Clark was then to have the agreed value of the lot, and the profits were to be equally divided. Did a partnership exist? |
Explanation
This case is an example of a joint venture where two parties come together for a project with the same motive. A situation, where only one transaction has occurred, cannot be categorized as a partnership business. Moreover, it has not been made clear how the profits are going to be distributed, which is the essence for any partnership business.
Verified Answer
There is no partnership since there is no business that is being carried out by the individuals; only one transaction that took place. There is also no agreement specifying the partnership relation.
