Reference no: EM131660610

Question: A Question of Ethics. In 1991, Hassan Mardanlou and Ali Ghaffarian signed a lease for 3960 South State Street in Salt Lake City, Utah. Ghaffarian paid $6,000 for the first and last months' rent, and said to Mardanlou, "We are in this together, partner." Mardanlou bought business cards for "Access Auto" with his and Ghaffarian's names on the cards. Both men were listed on Access Auto's insurance policy. Mardanlou bought the firm's furniture. Ghaffarian did the bookkeeping and bought the inventory. Mardanlou did not have access to the books but wrote checks on the firm's account, sold its inventory, and managed the sales staff. In March 1993, Ghaffarian gave Mardanlou a check for $10,000. Otherwise, Mardanlou was paid a fixed amount each month. Later that year, without telling Mardanlou, Ghaffarian bought the leased property with the firm's funds but titled it in his name. In 1995, Mardanlou learned of this deal and confronted Ghaffarian, who said, "Don't worry, we're partners." Ghaffarian filed the firm's tax returns in his name only, despite Mardanlou's repeated objections. Finally, in 1997, Mardanlou quit the firm and filed a suit in a Utah state court against Ghaffarian to dissolve the partnership and obtain a share of the profits.

1 What factors indicate that Mardanlou and Ghaffarian were partners? What factors indicate that they were not partners? If you were the judge, how would you resolve this dispute?

2 Is Mardanlou entitled to a share of the value of the real property that Ghaffarian bought in his own name? If so, how much? From an ethical point of view, what solution appears to be the fairest? Discuss.

3 Is Mardanlou entitled to a share of Access Auto's profits? Why or why not?