Mike, James and Mary, advertizing consultants, enter into a partnership called "Sensational Adverts". About a year a year after the partnership is established, Mike and Mary have an argument and Mike tells the other partners that he will soon be leaving the partnership. A week later, "Sensational Adverts" is invited to submit a bid to produce an advert for a local beer company. Mike, who is the member of the partnership in charge of beer adverts, sees this as an opportunity to start his own business. Mike resigns from "Sensational Adverts" , starts his own company, and then submits a bid. Mike's bid is accepted. There is nothing wrong with Mike's conduct.

Question

Quizplus · Accepted Answer

Mike's conduct is a breach of his fiduciary duty to the partnership. He used his position to gain information and then used that information for his own personal gain. This is considered a violation of his duty of loyalty to the partnership.

Mike, James and Mary, Advertizing Consultants, Enter into a Partnership