ASSIGNMENT PARTNERSHIP

QUESTION 1
Examine the principle of uberrimae fide based on the above case study.
Utmost good faith is a common law principle (sometimes called Uberrimae Fidei). Aperson
must, therefore, always be honest and accurate I the information they give to the insurance
company.
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Every partner must act honestly because the relationship between partners is based
on principle fidei (utmost good faith). Further obligations of partners in a firm are provided in the
following provision; Section 30, 31 and 32 of the Partnership Act, 1961.
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a. Under Section 30, the all information about company and the account the partnership
must should know and finalize and obligated. In Law v. Law (1904), a partner transferred
part of his share to another partner for 21,000. The partner who bought the share knew
that the partnership assets comprised of securities and charges but concealed the facts
from the partners knowledge. The court held that the partner who had the information
must disclose it; otherwise the sale of the shares may be set inside.
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In Section 30 from
Partnership Act 1961 Duty one partner to render. It is statuary duty and defendant to
appear to have breached it or not. For the principle is the partner must deal with honest
with the true and right fact when making the deal or decision.. In Section 30, to prove
fraud or negligence in order to invoke no necessity.

b. Under Section 31, Accountability of partners for private profits. For any related about the
partnership, every partner should alert and consent with the other partners. Anything
about the company must take action and secure for the all information. In Pathirana v.
Ariya Patrirana [1967], dispute aroused between two partners who were the marketing
agent for Caltex. The defendant give 3 month for terminated. Before the offered ended,

1
Claims Information Specialist via http://www.claimshelp.co.nz/utmost-good-faith access at 19 March 2014
2
Rozanah Ab. Rahman, S. W. (2010). Handbook of Malaysian Contract and Business Law. Perak: Emeritus
Publications.
3 Rozanah Ab. Rahman, S. W. (2010). Handbook of Malaysian Contract and Business Law. Perak: Emeritus
Publications.



the defended enter for the new agency contract with the Caltex. The court held the profit
gained the defendant from the agency belonged the firm.

c. Under Section 32, duty of partner not to compete with the firm. This about the when the
partner opens a competing business without the consent of other partners, the account
must all render all profit. In case Ass v. Benham [1891], the partnership brokerage firm
assisted in the incorporation for Ship Company. He using for information obtained for the
firms business. The others partners make it claimed for the benefit from the company.
Based the court held that other partners had no right to claim for the benefit since the
ship company was different nature from the ship-brokerage business.

A breach of the duty of good faith in relation to lodging a claim can arise in a number of ways.
These include are when a claims is lodged for an event that has not happened, or for an item
that has not been lost or damaged. When a false statement is made relating to the
circumstances leading to the loss itself, or relating to what happened after the loss.
Insurance contracts are not based on the principle of caveat emptor. Those involved in
negotiations for an insurance contract must disclose all relevant information to all the other
parties in the negotiation. This is particularly importance because relevant information will
typically only be known to one party to the contract, which is the proposer. This is the principle
of utmost good faith or uberrima fides.
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4
Utmost good faith via http://www.cila.co.uk/files/Certificate/Chapter%206.pdf access at 19 March 2014


QUESTION 2
Whether RMCED action against Congress Automobile would affect Majeemudins
position as a sleeping partner?
The sleeping partner may prefer not to publicly associate with the investment. The established
company, sleeping partner in running the start-up affairs, cam nevertheless provides valuable
advice and expertise in developing the promising business plan.
The objective as a sleeping partner is to help finance the partnership operations by providing a
financial investment. The person doesnt have many responsibilities within the partnership, and
the other partners, called general partner, handle company operations. In the agreement, the
term how profits and losses are allocated to each partner is written out. Generally, profits and
losses are split according to the ownership interest of each partner.
Based for the Section 7, Power of partner to bind firm. Every partner is an agent of the firm and
his other partners for the purpose of the business of the partnership; and the acts of every
partner who does any act for carrying on in the usual way business of the kind carried on by the
firm which he is a member bind the firm and his partners, unless the partner so acting has in
fact no authority to act for the firm in the particular matter, and the person with whom he is
dealing either knows that he has no authority or does not know or believe him to be a partner.
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For the case, look for the responsibilities for the Majeemudins based the agreement. What the
should take action. For this section, Majeemudin;s still as agent for the company as him can
affected for the action from the Royal Custom and Excise Department. But look for deeply for
the agreement with their partnership.
The other Section for the case is Section 11, Liability of partners. Every partner in a firm is liable
jointly with the others partners for all debts and obligations of the firm incurred while he is a
partner; and after his death his estate is also severally liable in a due course of administration

5
Law of Malaysia, Act 135(2006) Partnership Act 1961
for such debts and obligations, so far as they remain unsatisfied but subject to the prior payment
of his separate debts.
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For the case, the Majeemudins, being a silent partners makes a liable for the business
obligations just like the general partners. This happen the position Majeemudins can affected
and the financial investments in the business still effected, Also as a silent partners must keep
out of the day-to day operations of the business at all times. If they appear to be employees in
the business, they will lose their liability protections.
A sleeping partners investment may represent a personal conviction, a wish to see a business
succeed, rather than a desire to share in future profits.
For the case Majeemudins, when a venture capitalist enters a partnership agreement, assumes
some, if not all, legal responsibility. Limited partnerships reduce the liability of the silent so that
the personal assets are not at stake in the event lawsuit occurs. However, if the sleeping partner
enters a general partnership, both the assets of the business and the personal assets of all
partners are at the stakes limited partnership is resisted through the state, while general
partnership operate as sole proprietorships. No matter how the business is structured, the
sleeping partner must respond to legal issues surrounding the business and face penalties if
they arise.










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Law of Malaysia Act 135 (2006) Partnership Act 1961




QUESTION 3
Would Congress Automobile be liable for Saleem who commits criminal offence?
A criminal offence is an offence (or crime) against the state. It us often called breaking the law
the charge sheet or notice to appear will say what offence been charge if accused of a criminal
offence.
Any partner who commits criminal offence shall be personally liable. Other partners shall not be
liable unless there is evidence to prove their participation in the commission of the crime. For
the Case Chung Shin Kian &Anor v. Pendakwaraya [1980], two partners in a firm had used a
trade name, belonged to another company on their products. There was no evidence to prove
that the second appellant was involved in the crime except as to become a partner in the
business. Thus, the appeal of the second appellant was allowed.
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The time limits in most cases proceedings against adult summary offences must be commenced
within one year from the date that the offence happened. There us no time limit for indictable
offences.
For this case, what happen is Saleem must responsibility make it the decision and take action
and cannot effected for the other partnership. The way in which a criminal offence is
investigated and prosecuted depends on the type of crime involved. For Saleem , him must alert
about the purpose criminal offences may be described in different way such as summary
offences, Indictable offences, Minor Offences, Serious offences and Arrest able offences. This
because for secure for the business and the partnership.



7
Rozanah Ab. Rahman, S. W. (2010). Handbook of Malaysian Contract and Business Law. Perak: Emeritus
Publications.





QUESTION 4
Advise Majeemudin on his intention to withdraw himself from the partnership. Justify
your answer with support from relevant statutes and case laws.
Subject to any agreement between the partners, every partnership is dissolved by the death or
bankruptcy of any partner. A partnership Saleem and Kenny may also be dissolved if any
partner suffers his share of the partnership property to be charges under this Act for his
separate debt.
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Generally dissolution of a partnership occurs when one of the partners ceases
to be a partner in the firm. Others causes of dissolution are the Bankruptcy or death of partner,
an agreement of all partnership have making problems. However, the partner Saleem and
Kenny withdraws in violation of a partnership agreement; the partner may be liable for damages
as a result of the untimely or unauthorized withdrawal.
For the reference refer the Section 28, Retirement from partnership at will. Section 28 (1) Where
no fixed term has been agreed upon for the duration of the partnership, any partnership may
determine the partnership at any time on giving notice of his intention to do so to all the other
partners. And the Section 28 (2) where the partnership has originally been constituted by written
document, a notice in writing, signed by the partner giving it, and shall be sufficient for this
purpose.
Base for the case, Re Siew Inn Steamship Co [1934] retired partner had inserted at newspaper.
After retired his lent money to the firm on the security.], the court held that retired partner was
liable on the notes actual notice being necessary so far as far old customers were concerned.
For the section 34 (1) Subject to any agreement between the partners, a partnership
is dissolved
(a) if entered into for a fixed term, by the expiration of that term;

8
Rozanah Ab. Rahman, S. W. (2010). Handbook of Malaysian Contract and Business Law. Perak: Emeritus
Publications.

(b) if entered into for a single adventure or undertaking, by the termination of that adventure or
undertaking; or
(c) if entered into for an undefined time, by any partner giving notice to the other or others of his
intention to dissolve the partnership.
(2) In the last-mentioned case the partnership is dissolved as from the date mentioned in the
notice as the date of dissolution, or, if no date is so mentioned, as from the date of the
communication of the notice.
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The case Lee Lay Lay v. Wong Yiik Tai. Defendant claim of dissolving to partnership was valid
since their entered to single adventure . For the case , court held, no evidence the partnership
entered into single adventure or undertaking.
After remaining partners may carry on the partnership business, but the partnership is legally a
new and different partnership. A partnership agreement may provide for a partner to leave the
partnership without dissolving the partnership but only if the departing partners interested are
bought by the continuing partnership. Nevertheless, unless the partnership agreement states
otherwise, dissolution begins the process whereby the partnerships business will ultimately be
wound up and terminated.
Dissociation occurs upon receipt of a notice from a partner to withdraw, by expulsion of a
partner, or by bankruptcy-related events such as the bankruptcy of a partner.









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Law of Malaysia Act 135 (2006) Partnership Act 1961



References
1. Claims Information Specialist via http://www.claimshelp.co.nz/utmost-good-faith access
at 19 March 2014
2. Rozanah Ab. Rahman, S. W. (2010). Handbook of Malaysian Contract and Business
Law. Perak: Emeritus Publications.
3. Utmost good faith via http://www.cila.co.uk/files/Certificate/Chapter%206.pdf access at
19 March 2014
4. Law of Malaysia Act 135 (2006) Partnership Act 1961