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Joe and Sam Were in Business School Together in College

Question 38

Multiple Choice

Joe and Sam were in business school together in college, and after they graduated decided to open an ice-cream store in a mall together. They had skipped the classes where they were taught about different methods and forms of carrying on business and so gave no thought as to how they would structure their relationship. Which of the following is true with respect to the legal positions of Joe and Sam?


A) If Sam opens up another ice-cream store in another mall in a nearby city without telling Joe, he must share any profits he makes with Joe.
B) If a customer were injured because of poorly kept food and Sam did not have the assets to pay his half, Joe would only have to pay for his half of the damages suffered.
C) Sam and Joe are not in a partnership since they have not specifically agreed to be.
D) If Sam were to find a great deal on anchovy ice-cream and purchase 2,000 litres of it, only Sam would be liable for the debt incurred as a result of the purchase.
E) If Sam opens up another ice-cream store in another mall in a nearby city without telling Joe, Joe would be liable for any losses he suffered along with Sam.

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