School Essay: Shuptrine v. Brown

Leslie Penny

Writing Assignment # 4

Shuptrine v. Brown

               We can see by the points given that the details were thoroughly thought out while the two were putting their partnership together.  However, they didn't think it through in regards to if their partnership were to come to an end.  Shuptrine would produce the art and Brown would handle the distribution of the art.  The artist, Shuptrine, would receive 50% of the revenues (profits) and Brown would receive the other 50%.  As per their agreement, Brown would he held responsible for all the losses as well as the management of the business.  The issue at hand is whether there was a valid agreement or not between the two once they called off their partner relationship.

            According to our book, Business Law and the legal environment, page 816, the court will determine between the two if a partnership in fact existed by evaluating if they shared the profits of the business, shared management of the business, shared the losses of the business and referred to themselves as partners.  First I want to touch base on the agreement that they both signed before Brown went away on his trip to Israel.  The UPA (Uniform Partnership Act) expresses that an agreement either written or oral is not a requirement to deem the partnership valid in court and that actions speak louder than words (Beatty, 2010).  Therefore, in the above argument  for Brown stating they both signed a partnership agreement is void. 

            The second issue is in regards to the management rights of their relationship.  We've already learned that it's a partnership if they share management of their business agreement and that each "partner has equal rights in the management and conduct of the business" (Beatty, 2010, p. 805).  The important phrase in this case is at the end of the statement that says "unless the partners agree otherwise" (Beatty, 2010, p. 805).  In their agreement it states clearly that that is the case.  They agreed that Brown would handle management of their business.  So, even though in the argument for Shuptrine is correct, a partnership agreement does not create a partnership, the argument that it's not a valid partnership because Brown alone managed the business is wrong and a mute point. 

            The agreement between the two also states that Brown would cover the losses.  Our learning material states that "an agreement to share in losses is strong evidence of a partnership" (Beatty, 2010, p. 798), however, they made the agreement that Brown would solely cover any losses.  So that argument as to why they aren't a partnership would be invalid.  I feel that even though the two agreed to terminate their business partnership, it being an oral termination, it remained a partnership until a winding up process is completed.  According to the scenario above there were no time constraints on the partnership so it was an at will partnership meaning they can end the partnership at any time (Beatty, 2010). 

            According to the list of circumstances for dissolution, the partnership between the two falls under this category: "In a partnership at will (which they do have), when a partner notifies the partnership that he intends to withdraw (as both parties did).  Therefore, they have created the first step in termination of their partnership business.  The next step is the winding up process.  The two apparently never discussed this process nor did anyone of them take it upon themselves to begin that process.  If the court does agree that they do in fact have a business relationship then they will agree that the partnership is still a go since the termination of the partnership wasn't completed. 

            I do feel that Brown was morally incorrect to continue selling the prints after Shuptrine made it clear he no longer wanted his prints sold but I don't think he was legally in the wrong.  To strengthen my argument, I again turn to our book.  Brown has overstepped  his bounds by taking on new business before the winding up process could be attended too, but, since Shuptrine did not file a statement of dissolution with the Secretary of State which doesn't even become effective until 90 days after its filed he is just as liable for Brown's actions (Beatty, 2010). 

            In conclusion, though I find Browns actions wrong in the moral sense, I don't think he did anything that would constitute a law suit.  I feel the court will find the two in fact had a business partnership, not based on their agreement but based on their actions.  The scenario leads one to believe that revenues were indeed split between the two.   They did not share in the management responsibilities but they agreed that is the way they wanted the partnership to play out.  They also did not share in the losses of the partnership, but again, they agreed that is the way they wanted the partnership to be. 

References

Business Law and the Legal Environment : Standard Edition. Beatty, Jeffrey F. / Samuelson,             Susan S. 5TH 10. New Edition West Publishing Co. (College)