The legal question in the prevailing circumstances is whether or not Bally ltd is in breach of the

contract with Adada ltd in their partnership agreement.

The law that applies to the legal issue is the law on partnership. A partnership is a strategic
agreement or bond between two or additional people. Doing well partnerships are regularly
based on belief, fairness, and mutual understanding and obligations.  Partnerships can be strict,
where each party’s roles and obligations are spelled out in a printed agreement, or informal,
where the roles and obligations are understood or agreed to verbally.

There are two types of partnerships and those are general and limited. For purposes of the
circumstances at hand the essay will focus on the general partnership. A general partnership is an
understanding in which two or more folks or other persons (such as a company and an
individual) perform production as “partners”, whether formally or not. In terms of asset security,
general partnerships can be even not as good as than sole proprietorships. Whatever thing that
one associate does influences all of the partners, because each partner of the of the general
partnership is individually in lay the blame on for all obligations of the organization. Thus each
general partner’s revelation to risk is enlarged by a factor equal to the number of general partners
in the industry (Beatty & Samuelson, 2010).

In a general partnership, it is trouble-free and economical to produce and manoeuvre. One large
advantage of a general partnership is that you don’t have to record with your position and
compensate a fee, as you do to launch a business or limited liability company. And because a
general partnership is in general a ” pass through” tax article (the partners, not the partnership,
are taxed except you particularly choose to be taxed like a firm) filing revenue tax come back is
easy.

The disadvantages of a general partnership is that partners may have dissimilar apparitions or
aims for the business. There may be uneven obligation in terms of time and investments. There
may also be individual disagreements. Partners are individually responsible for business debts
and liabilities. Each associate may also be responsible for debts incurred, conclusions made, and
accomplishments taken by the other partner or partners. At some time, there most positively will
be differences in organization plans, functioning process, and upcoming vision for the business.
You may meet difficulty in attracting investors.
The concept of a partnership states specifically that it is a collaboration between people. The
corollary of this is that in, or separate from the arrangement, the collaboration has no life. In
other words, apart from its founders, the relationship has no distinct legal personality, unlike a
corporation. Partners in a partnership are personally liable for the debts and obligations of the
firm. However, the law also provides for limited liability partnerships (Partnership Act,1890).

It is normal to carry out the terms of the relationship in written form. The produced document is
known as the 'partnership articles'. No question, after any consultation, the parties concerned
discuss whether they want to be clearly included in the papers. Any holes in the papers may be
covered by analogy or by current common law and by equal relationship laws. It is also
important to account for any unusual or specialized terminology for potential partners to be
incorporated (Ibid)

Generally, the detailed clauses of the articles of partnership relate to matters such as the essence
of the undertaking to be transacted, the name of the undertaking, the capital payments to be paid
by the individual parties, the planning of the company accounts, the way in which revenues are
calculated and divided and the termination of the partnership. A arrangement for conflicts
between spouses to be submitted to arbitration for solution is also standard. (Beatty &
Samuelson, 2010).

The partnership agreement is an internal document and, although it has effect between the
partners, it does not necessarily affect the rights of third parties. Thus, where the agreement seeks
to place limitations on the usual authority of a partner, it is effective with regard to the internal
relations of the partners but does not have any effect as regards an outsider who deals with the
partner without knowledge of the limitation. The sharing of profit is really important in
identifying a potential partnership. All the partners are entitled to share equally in the capital and
profits of the business, and must contribute equally towards the losses whether of capital or
otherwise sustained by the firm (Partnership Act 1890).

In Cox v. Hickman (1860), the court ruled that only a refutable expectation of collaboration
provided the sharing of earnings. In this scenario, the facts were that Mr. Smith and his son
carried out a relationship venture as 'M/s. With Smith and his son. Owing to financial difficulty,
they entrusted the company to their creditors and executed an agreement to the effect. The
company was to be run under the name of 'Stanton Iron Co' by five trustees representing the
creditors, according to the arrangement. Cox and Haywood are among the trustees. The net
income/profit (after paying off the creditors) was to be allocated by the trustees.

After all the creditors had been paid off, the business had to be re transferred to M/s. Smith and
son. The creditors were empowered to discontinue the business or to make rules for conducting
the business. While the business was being managed by the trustees, Hickman, the plaintiff in
this case supplied goods to the firm. Cox did not accept the trusteeship and did not take part in
the transaction. Hickman sued the firm for payment treating Cox and Haywood as partners.The
House of Lords held that there was no partnership and Cox was not liable. Lord Cranworth held
that participation in profits is not the decisive test of a partnership. The true test is, whether there
exists 'mutual agency' between/among the partners (Ibid).

Further, the interests of partners in the partnership property and their rights and duties in relation
to the partnership. It provides that the firm must indemnify every partner in respect of payments
made and personal liabilities incurred by him in the ordinary and proper conduct of the business
of the firm; or, in or about anything necessarily done for the preservation of the business or
property of the firm. In addition it provides that a partner making, for the purpose of the
partnership, any actual payment or advance beyond the amount of capital which he has agreed to
subscribe, is entitled to interest at the rate of five per cent per annum from the date of the
payment or advance (Partnership Act, 1890).

Furthermore, Partnership Act provides that a partner is only entitled to interest on the capital
subscribed by him after the ascertainment of profits. This entails that partners will only get
interest out of their capital contribution after the firm starts making profits. Additionally, every
partner may take part in the management of the partnership business. Partnership Act (1890) also
provides that no person may be introduced as a partner without the consent of all existing
partners.

In addition, property may be owned collectively by all of the partners and may thus amount to
partnership property. Alternatively, it is possible for property to be used by the partnership as a
whole and yet remain the personal property of only one of the partners. Section 20 of the
Partnership Agreement (1890) provides that all property and rights and interests in property
originally brought into the partnership stock or acquired, whether by purchase or otherwise, on
account of the firm or for the purposes and in the course of the partnership business, are called
partnership property, and must be held and applied by the partners exclusively for the purposes
of the partnership and in accordance with the partnership agreement. Section 21 of the
Partnership Act (1890) goes further to provide that unless the contrary intention appears,
property bought with money belonging to the firm is deemed to have been bought on account of
the firm. Therefore, property may be partnership property if the parties have agreed to it.

The Partnership Act (1890) states that each partner is an associate of the firm and its other
members for the purposes of the partnership's activity; and the actions of each partner who
conducts any act for the ordinary business of the sort carried out by the company of which he is a
member bind the company and its partners, except the partner behaving in such a way does not
necessarily have the right to act for the company.

Furthermore an act or instrument relating to the undertaking of the undertaking and carrying out
or carried out in the name of the undertaking or in some other way expressing the intention to
bind the undertaking by any entity allowed to do so whether or not a member, is binding on the
undertaking and all the partners. These clauses indicate that each partner is collectively and
severally responsible for the business with its copartners. They usually have the following
personal liabilities: liabilities of wrongdoing, incorrect relationship, misappropriation of assets,
and misapplication of trust money (Partnership Act, 1890).

In the case of Lloyd v Grace Smith & Co (1912), a lawyer's clerk fraudulently induced a
customer's conveyance, and disposed of her house for his own personal gain. The court held that
in the case of fraudulent actions or omissions, vicarious liability may apply to fraudulent acts or
omissions if such acts were committed in the course of employment or within the scope of the
obvious authority, even if they were performed by an employee or a partner performing the
undertaking of a kind to which he was entitled.

The principal was responsible for the agent's deception because conveyancing is part of the
solicitors' usual business. The client has been invited by the company to deal with their
managing clerk. It was meaningless that the agent acted for his own reasons with a deceptive
motive. His act was of the class or type of actions that come under the lawyers' ordinary
company. This case therefore shows that a partner is an employee of the company and that the
whole company is bound by its actions.
It can be found that a reputable company, Adada Enterprises Ltd, has a piece of land in a proper
position by adding the above law to the facts. Bally Ltd, a company with a financial body, is
doing so. They both agree that there is a shortage of houses in Lusaka and they have decided to
put to the table what each citizen has, land and money. It may also be said that a relationship
exists between Adada and Bally to take out a specific company with a view to profit. The
consensual nature of the arrangement allows the parties to resist the laws of the Act.

The agreement of the parties does not however, provide for an argument and the Act must be
relied on. One of the essential rights that should be paid for is the allocation of profits, as it is the
primary objective of business people. The details show that under the name of Muntu Wandi Ltd
a purpose vehicle was introduced to promote the smooth running of the project. Bally Ltd only
takes cash for 20 homes, unknown, to Adada Enterprises Ltd, and then Muntu Wandi Ltd begins
to auction the houses and use the proceeds to build the remaining houses. The details suggest the
negotiated share of profits will be affected by this. This indicates that Bally Ltd is in violation of
the agreement contract because its actions would conflict with the right of Adada to share the
transaction's benefits.
REFERENCES

Beatty, J & Samuelson, S. (2010). Introduction to Business Law. 3rd ed. New York: Macmillan
Publishing Solutions.

Cox v. Hickman (1860) 8 H.L.C. 268.

Lloyd v Grace, Smith & Co (1912) UKHL 606.

Partnership Act, 1890.