Reference no: EM133454310

Case Study: Adams and Nancy are in business together, providing financial advice and accounting services. Due to their different experience, Adams handled the financial advice and Nancy looked after the accounting clients. Unfortunately, their business has not been performing well.

Adams and Nancy invite their friend Stevie to help with the business. He invested $100,000 into the business, which they called a loan. Stevie was to receive a share in profits at the end of each financial year and would have input into how the business was run.

Following the investment of Stevie, the business begins to improve. Adams purchased an expensive Type-X 10 computer on which to run his financial analysis models. Nancy was furious at the $74,000 price tag and challenges Adam's right to purchase the computer without her consent by refusing to authorize payment of the purchase invoice.

Following the purchase of the computer Adams has become increasingly distracted by the new computer and is often careless in the advice he gives to clients. Chris and Meg, two of Adam's clients have recently suffered a significant loss as a result of following the careless advice given to them by Adams.

REQUIRED: Would the business which supplied the computer be successful in suing for payment of the sum due ($74,000) despite a term in the partnership agreement which required approval of all partners to any purchase in excess of $10,000. Give your answer and cite your sources.