In Chapter 36, read Case 36-1, Leoff v. S & J Land Co. and discuss the following:
What evidence led the court to determine that Leoff and S&J Land Company were partners? Do you think any evidence hints at suggesting that Leoff and s&J could have not been partners? Suppose for a moment that the court did not believe a partnership existed. Notice that business
should not attempt to avoid partnership responsibilities
Evidence that led the court to determine that Leoff and S&J Land Company were partners was the law. Per Colorado's Uniform Partnership Act, a partnership is "the association of two or more persons to carry on as co-owners a business for profit ... whether or not the persons intend to form a partnership." Because both parties shared profits and losses, they were deemed a partnership. The District Court also refered to the 2006 Management Agreement that states that Leoff is entitled to 30% of profits and losses. Based on the aforementioned circumstances, there is no evidence that would suggest that the two parties were not in a partnership.
Partnerships involve trust between the parties involved where both parties share profits and bear the losses together. When there is an agreement between the parties and signed paperwork forming partnerships, and in a case like this, where one party files suit against another party, any trust between the two is broken and ethics may come into play. Since there wasn't a formal partnership agreement presented to the court, but partnership rules applied, the court ruled in favor of s&J.
The universalization test allows us to practice ethical decision making. When a partnership agreement is disrupted because of one party, the decision affects not only the two parties, but every other company or contractor involved in the business. When Leoff decided to abandon the project to avoid absorbing damages, he assumed that S&J would pick up the pieces. This wasn't ethical and the court ruled against him.
References:
Leoff v. S and J Land Company, No. 11-1293 ti10th Cir. 2012). ti2012, November 29). Justia Law. https:tttlaw.justia.comttcasesttfederalttappellate-courtsttca10tt11-1293tt11-1293-2012-11-29.htm