AREA: Partnership through conduct- This is a written agreement pre-requisite for the formation of a Partnership.
Facts:- At their father's passing, two brothers who lived together received some property. The properties weren't divided. Instead, they raised Rs 5,000 by selling a garden and putting the money into a separate timber company. Although there was no formal partnership agreement, it seemed like they were planning to split the profits. But, the company failed before it could turn a profit, raising the issue of how to settle the Liabilities.
Issue: - Can it be considered as that of a partnership Business?
Judgment: -. It was held that they must bear the liabilities as partners. The court observed an agreement of partnership need not be expressed. It can arise out of mutual understanding shown by a consistent course of conduct. The agreement may be written or oral, express or implied.
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