Chrissie and Mark have formed a partnership under the firm name of "Fresh Face," to make and market their own line of natural cosmetics. Each contributed $15,000 in capital, but they needed a further $30,000 to start up. They persuaded Mark's mother and Chrissie's father to contribute $15,000 each as limited partners. The limited partnership was properly registered. Mark's mother, a lawyer, occasionally gave them some free legal advice. Chrissie's father, a plastics manufacturer, advised them on aspects of managing a business, and at one point, found them a better and cheaper packaging supplier through his own industry contacts.
Maggie, a famous model, tried their products, and became permanently scarred by a piece of glass in one of their pots of face cream. Maggie sued for $1 million for damages for breach of warranty of fitness for the purpose intended. The business has assets of $120,000. Chrissie and Mark each have personal assets of $20,000. Mark's mother has personal assets of $50,000, and Chrissie's father is a millionaire twice over. The capital accounts of the partners are still $15,000 each. There are no other creditors.
a. If you were representing Maggie, what action would you take, and against what parties? Assess the success of your action as against each party you name.
b. Regardless of your answer in a), if your argument was successful against Chrissie, Mark, and Chrissie's father, but not against Mark's mother, who would pay (and what amount) Maggie's million dollar claim?
c. Would any of the foregoing be different if the limited partnership had not been registered?

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The Answer of Chrissie and Mark have formed a partnership under the firm name of "Fresh Face," to make and market their own line of natural cosmetics. Each contributed $15,000 in capital, but they needed a further $30,000 to start up. They persuaded Mark's mother and Chrissie's father to contribute $15,000 each as limited partners. The limited partnership was properly registered. Mark's mother, a lawyer, occasionally gave them some free legal advice. Chrissie's father, a plastics manufacturer, advised them on aspects of managing a business, and at one point, found them a better and cheaper packaging supplier through his own industry contacts.
Maggie, a famous model, tried their products, and became permanently scarred by a piece of glass in one of their pots of face cream. Maggie sued for $1 million for damages for breach of warranty of fitness for the purpose intended. The business has assets of $120,000. Chrissie and Mark each have personal assets of $20,000. Mark's mother has personal assets of $50,000, and Chrissie's father is a millionaire twice over. The capital accounts of the partners are still $15,000 each. There are no other creditors.
a. If you were representing Maggie, what action would you take, and against what parties? Assess the success of your action as against each party you name.
b. Regardless of your answer in a), if your argument was successful against Chrissie, Mark, and Chrissie's father, but not against Mark's mother, who would pay (and what amount) Maggie's million dollar claim?
c. Would any of the foregoing be different if the limited partnership had not been registered?

Chrissie and Mark Have Formed a Partnership Under the Firm