[Health Food] Josh and Merida Are Partners and Owners of J&M

question 87

Multiple Choice

[Health Food] Josh and Merida are partners and owners of J&M Health Food Store. Carson, who is a registered dietician, works for J&M on and off as a consultant, as he is very knowledgeable about the health benefits of natural herbs. Carson travels to conventions around the country and tests new products and often relays information about the new products to J&M. At a convention last month, Carson met Monte, a vitamin producer, who stated that he was glad to meet one of J&M's partners. Carson replied that the new Fresh product line was exactly what J&M needed and placed a significant order for J&M. When the Fresh product was delivered, J&M had closed the store for remodeling, and the product spoiled.
-Assume Carson pays the damages suffered by Monte. Carson then asks J&M for a share of J&M's profits, which J&M refuses. Is J&M justified in denying Carson any share of the profits?

• A) Yes, even though Carson paid the debt, Carson is not a partner of J&M and is not entitled to profits.
• B) Yes, even though Carson is considered a partner, he is not entitled to a share of the profits because he failed to seek approval of his partners for the deal.
• C) No, Carson is now considered a partner of J&M and is entitled to a share of the profits.
• D) No, even though Carson is not considered a partner of J&M, he is entitled to a share of the profits up to the amount of damages paid to Monte.
• E) No, even though Carson is not considered a partner of J&M, he is entitled to a share of the profits up to the amount of damages paid to Monte and any reasonable expenses.