[Grooming Grievances] Andrew, Marie, and Cruz Formed a Partnership to Groom

question 41

Multiple Choice

[Grooming Grievances] Andrew, Marie, and Cruz formed a partnership to groom dogs. Because they were good friends and anticipated making a profit sufficient to compensate all partners well, the articles of partnership did not allocate profit or losses. Marie was appointed managing partner. Unfortunately, the business did not go as well as expected and the partnership incurred some losses. Cruz claimed that he should not have to share in losses because he had groomed more dogs than anyone. Cruz also claimed that although the partnership did not reference compensation for additional duties, he was entitled to compensation because of his extensive work. Marie claimed that she should not have to share in losses because she contributed more capital than did either of the others. Andrew claimed that he should not have to cover the losses because both Marie and Cruz had been hiding the books from him. He demanded to inspect the books and also to review a listing of all partnership assets and profit statements listing distributions to partners. Marie and Cruz denied that they had been hiding the books and claimed complete innocence of any wrongdoing.
-Is Cruz correct that he is entitled to additional compensation based upon the amount of work he was doing?

• A) Yes, he is correct.
• B) Maybe; Based upon equitable principles he may be correct, but only if he can establish that the other partners wrongfully refused to do their share of the work.
• C) No, he is incorrect.
• D) No, he is incorrect unless he can establish that he honestly did not know the law in regard to partnerships and did the extra work believing that he would be compensated.
• E) No, he is incorrect unless he can establish that he did at least 30% more work than any other partner.

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