Question

Question A. Charlie owned and operated an auto parts junkyard in Utah. Charlie's son, Max, started working in the business part-time as a child and full-time when he left school at the age of sixteen. Max oversaw the business's finances, depositing the profits in a bank. Charlie gave Max a 1/2 interest in the business, telling him that if anything ever happened to Charlie, the entire business would be in Max's hands. In 2019, Charlie and his wife, Allie, transferred to Max the land on which the junkyard was located. Two years later, however, Allie and her two daughters falsely convinced Charlie, whose mental competence had deteriorated, that Max had cheated him in business. Max was ordered off the land. Shortly thereafter, Charlie died. Max filed a suit in a Utah state court against the rest of the family, asserting that he and Charlie had been partners and that he was entitled to Charlie's share of the business. Was the relationship between Charlie and Max a partnership? Is Max entitled to Charlie's share? Explain in detail. I will be looking for a very thorough legal analysis.

Answer 1

Answer:

Yes the relationship between Charlie and Max is a partnership relationship. Because of the following reasons

• Charlie has given half of interest in the business to Max.
• Charlie had told him that something has happened to Charlie or if Charlie died, then entire business will be in Max’ hand.
• The land of business location was transferred on the name of Max, in 2019.

The all the above points forms a verbal agreement between Max and Charlie. Verbal agreement is legally valid and based on this verbal agreement, the partnership between the Charlie and Max can be proved. Thu once the partnership can be proved based on this verbal agreement, then we can say that Both were partners for the business.

Legally Compliance: The verbal agreement between the Charlie and Max i a valid contract. Charlie had a verbal agreement with him. Charlie has already given half interest in the business. Charlie had already said that after Charlie, Max will be owning the entire business. Thus this verbal agreement is good enough for partnership agreement and based on this verbal agreement, partnership contract can be proved. Hence it can be proving legally that Charlie and Max were in partnership.  

Yes Max is entitled to Charlie‘s share, as Charlie had told to Max that after Charlie, the entire business will be in the hand of Max. This is verbal agreement which works like a contract. Thus the verbal agreement is a valid contract and it can be used as a proof.