[Car Repair] Gordon and Leo are partners in SafeT Car, a full service automotive repair company. Leo does nearly all of the day-to-day work as Gordon is thinking about retiring. When Leo was moving a customer's car last week, he accidentally collided with the garage door, and the door had to be replaced at a cost of $6,000. Leo recently met with BigBox stores about a potential deal by which BigBox would set up a SafeT Car shop in every BigBox store nationwide. Leo signed an agreement to open a "test" store in one BigBox store. Leo hasn't told Gordon yet, because Gordon hasn't been in the office in a month. Gordon opens The Oil Place, an express oil change company, which he plans to have his sons operate in his retirement. When Leo learns about The Oil Place, he threatens to sue Gordon for breach of duty because Leo is sick of doing all the work at SafeT Car while Gordon was apparently opening a competing business. Gordon tells Leo that he hasn't breached any duty and they don't have a written agreement that restricts Gordon from opening his own store with his sons. Gordon also tells Leo that the $6,000 for the damaged door is coming out of Leo's pocket. Leo, who's thinking about the potential deal about BigBox, tells Gordon he wants to split up the partnership.
-Did Gordon breach any duty by opening his own oil change store?
A) Yes, Gordon breached his fiduciary duty by engaging in a business that competes with the partnership.
B) Yes, but only if the oil change store is also a partnership.
C) No, because there was no written agreement that sets forth the duties of the partners.
D) No, because, even though there was no written agreement, partners are permitted to form their own businesses so long as they remain loyal to the partnership.
E) No, but only if Gordon also continues to work at SafeT Car.
Correct Answer:
Verified
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