Forms of Business Organisations - Essay Example

Forms of Business Organisations Q4 In the present problem, the issue is whether the partnership is liable for the injury of Stacey due to wrongful work practices. The applicable provisions can be found in Division 2 of PA 1891. Any act or omission of any of the partners in a partnership, except if it is an incorporated limited partnership, committed during the course of its business that causes loss or injury to a third party should be borne by all the partners to the extent of their participation.

1 Moreover, the liability of partners in a general partnership under the foregoing situations is characterised as joint and several, thus, “every partner in a firm other than an incorporated limited partnership is liable jointly with the partner’s co-partners, and also severally, for everything for which the firm […] becomes liable under section 10 or 11.” 2 Joint and several liability means, within the partnership context, that the claimant may bring a claim against all of the partners or choose to recover the entire amount of damages from only one or some of the partners, leaving the partner/s whom the claimant has/have successfully recovered from to go after other partners for the latter’s proportionate contribution to the claim.

3 Applying the above principles, it can be concluded that Stacey can go after both Bertha and Sam or either Bertha and Sam for the recovery of damages caused to his spine due to the wrongful practices of the firm, regardless of whether only one of the partners is at fault or both. In a joint and several liability, the partners will be left to determine for themselves their exact liability and recover from each other the amount of the other’s actual liability. Therefore, Besa Constructions should seriously consider accepting liability for the injury of Stacey after validating the reports of the insurers.

Since the firm is not a separate entity from its owners, this means that Bertha or Sam or both should pay the claim, in accordance to the extent of their individual participation in the wrongful company practices. Moreover, they should initiate a change in its existing working practices to prevent the same problem from occurring again in the future. References: Partnership Act 1891. Partnership (Limited Partnerships) Regulations 1997. Richarson, M. The Second Wave Of Law And Economics. Federation Press (1999).