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Thu 7 Oct, 2004 12:32 pm
Hi all,
I'm in the middle of a take home Bus Orgs midterm, and I have a great flow going so far (pulling out issues, developing the outline, etc), but I realized that I'm getting stuck on one minor part of the question, and its driving me banannas.
My professor is asking that we discuss the legal claims our client would have, and I just realized that we never really discussed what a "legal claim" is in class!
I only need to know if there is a specific "legal claim" phrase that is expected, as in other classes (such as "Manslaughter" in Crim Law or "Trespass" in Torts, know what I mean?).
In a nutshell, I'm working on a problem where one individual starts a business, gets financial help from a friend, who then eventually provides services as well. Soonafter, they invest large amounts of money (including profits) into the business. They have a falling out, and one partner tries to kick the other out, claiming that the financial assistance provided was a loan. My client is the person who is being "kicked out", claiming that it was not a loan, but an investment, that they are partners, as well as the other partner is doing this in part to cut him out of a potential lucrative business opportunity that seems on the horizon.
What "legal claim" should be argued? "Attempt at a fraudulent dissolution of a partnership"? I know I will include an action for accounting, but other than that, I'm stuck on the semantic phraseology of what the claim is. Otherwise, I'm in the clear.
Any help or guidance would be immensely appreciated! Thanks...
Re: "Legal Claims"? From a confused 2L
JustanObserver wrote:My professor is asking that we discuss the legal claims our client would have, and I just realized that we never really discussed what a "legal claim" is in class!
I suppose a "legal claim" is any kind of cause of action: a tort claim, a breach of contract claim, etc. Your professor might even be including equitable claims in there: there's some ambiguity in the term "legal" (as opposed to non-legal) and "legal" (as opposed to equitable). For instance, an action for accounting is, I believe, an equitable remedy, but it's still something that you might want to include as a "legal" claim.
JustanObserver wrote:What "legal claim" should be argued? "Attempt at a fraudulent dissolution of a partnership"? I know I will include an action for accounting, but other than that, I'm stuck on the semantic phraseology of what the claim is. Otherwise, I'm in the clear.
I'd ask for a declaratory judgment, declaring the respective rights of the parties to the putative partnership agreement. Also breach of contract, breach of implied contract (quasi-contract), equitable estoppel. Depending upon the facts of the case, there might also be claims for tortious interference with a business expectancy or an account stated, in addition to the accounting action. I don't know what a "fraudulent dissolution of partnership" might be, but if there was actual fraud involved (over and above the breach of contract) then that might be a possible claim as well.
Thanks for putting me in the right direction!
I'm trying to avoid that aspect of it right now. I'm on fire with the rest of it though.
In conjunction with the breach of contract action, I'd also seek the establishment of a constructive trust. Each partner is obligated to act on behalf of the partnership: if the breaching partner has, or will have, received money from the prospective business opportunity, he should be forced to hold those funds in trust for the benefit of the partnership.
Thats just what makes this a tricky question, though. There was no contract or agreement between the two individuals. Here a partnership must be argued using Statutory provisions (Uniform Partnership Act), since at the start, only one person was responsible for the whole thing, then my "client", through his various acts (financial support, increasing interaction eventually amounting to control of certain aspects of the business) became a partner in the eyes of the law.
Basically, I'm taking the fact pattern apart piece by piece to determine at exactly what point this became a partnership, then using the provisions of the UPA to see what remedies each person has in respect to one another and to the "partnership".
As for the business opportunity, I'm glad to see I have my head in the right spot. I've fleshed out the trust fund aspect of it already and I'm working out other possibilities that might allow for a continuation of the business. Basically, I'm trying to avoid liquidating an otherwise sucessful venture just because two guys had a falling out.
The last time I had any contact with the UPA was probably during my Enterprise Organizations class in law school (that's the equivalent of your Business Org. class), so I can't be of much help in that regard. Even if the parties did not formally enter into a partnership agreement, there still should be equitable remedies that your client could pursue. But then your prof. is probably more interested in the contractual/statutory claims rather than any equitable claims, so I suppose that somewhere in there the two parties actually did enter into a formal partnership. Your job, then, is to find out when and how that happened.
Eek, it's been a while since I looked at any of this, but I found this site, hope it helps:
http://www.law.cornell.edu/topics/partnership.html
Re: "Legal Claims"? From a confused 2L
JustanObserver wrote: My professor is asking that we discuss the legal claims our client would have, and I just realized that we never really discussed what a "legal claim" is in class!
In a nutshell, I'm working on a problem where one individual starts a business, gets financial help from a friend, who then eventually provides services as well. Soonafter, they invest large amounts of money (including profits) into the business. They have a falling out, and one partner tries to kick the other out, claiming that the financial assistance provided was a loan. My client is the person who is being "kicked out", claiming that it was not a loan, but an investment, that they are partners, as well as the other partner is doing this in part to cut him out of a potential lucrative business opportunity that seems on the horizon.
If you were required to draft a complaint (a pleading) on behalf of your client (the plaintiff), what would be his legal claims (legally cognizable causes of action)?
Inasmuch as this is a BUSINESS ORGANIZATIONS class--your professor wants you to identify possible claims your client has as they relate to your class studies.
Your client's first claim, obviously, is that the plaintiff and the defendant are engaged in a partnership d/b/a ___________ (name of business).
A partnership is the association of two or more persons to carry on as coowners a business for profit forms a partnership,
whether or not the persons intend to form a partnership.
(Discuss the elements that courts look at to determine whether a partnership exists and the facts to support the existence of a partnership in this case.)
Depending on facts--other possible claims: Breach of duty of good faith and fair dealing (defendant's wrongful attempt to oust your client (plaintiff) from partnership business); and action for the defendant's dissociation (keeps business intact with your client [the plaintiff] buying out the defendant's share); or dissolution of the partnership (dissolves the partnership and winds up business).
Wonderful tips. Thank you all very very much.
Today I'm putting it all together, and Debra, that was just what I needed to hear !
Objectivity
Remember to maintain objectivity when writing your paper. Your professor wants to you to identify both the strengths and the weaknesses in your client's case.
Your professor will rarely present you with a fact scenario that is clear cut. He wants you to flesh out the issues and think like a lawyer!
If you were writing a brief to submit to the court, you would use the art of persuasion to convince the judge to find in your client's favor. But, a really good attorney needs to objectively assess his client's case before walking into court--before the art of persuasion even comes into play. It is imperative to identify the weaknesses in your client's case and determine how to best approach those weaknesses in order for your client to prevail.
I just wanted to thank you all for the tips. It was a bit tricky, but the midterm is done, handed in, and I'm rather proud of the work.
By the way, in trying to be objective, yet detailed with my information, as well as incorporating the UPA as well as caselaw resulted in a 29 page paper! Jeez!
Anyway, the advice was appreciated. Thanks again
done
Congratulations. It always feels great to complete a major project and hand it in. 29 neatly-typed, double-spaced pages is a respectable length. Now you can look forward to the final!
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