MRL2601 ENTREPRENEURIAL LAW
Assignment 1 Semester 1: Year 2025
, Question 1
1.1 Remedy Available to Susan in the Given Circumstances
In this scenario, Susan has grounds to claim her share of the goodwill based on the
dissolution of the partnership and the subsequent actions of Jane. The key issue here is
that the partnership agreement is silent regarding the goodwill, which means that the
partnership will follow the legal principles that govern the distribution of partnership
assets upon dissolution.
In South African law, goodwill is generally considered a partnership asset that should be
divided between the partners in proportion to their share in the partnership unless
otherwise agreed upon in the partnership agreement. Since the agreement does not
specify how goodwill is to be handled upon dissolution, the common law position would
apply, and Susan is entitled to a share of the goodwill, which is valued at R1 million.
Furthermore, Jane’s action of taking over the clients de facto (essentially using the
partnership’s goodwill for her personal benefit) could be seen as an unfair appropriation
of partnership assets. Susan may have a legal remedy based on unjust enrichment,
where she can claim her rightful share of the goodwill, as Jane's actions have resulted
in a benefit to her at Susan’s expense. Susan could initiate legal action for the recovery
of her share of the goodwill, possibly through a claim for damages or an accounting of
profits from the goodwill.
1.2 Five Reasons for the Termination of a Partnership
i. Mutual Agreement: Partners may agree to dissolve the partnership by mutual consent.
ii. Expiry of the Partnership Term: The partnership may be set for a specific duration or
project, and once that term expires, the partnership is automatically terminated.
iii. Death of a Partner: The death of a partner may lead to the dissolution of the
partnership unless the partnership agreement provides for continuation.
Assignment 1 Semester 1: Year 2025
, Question 1
1.1 Remedy Available to Susan in the Given Circumstances
In this scenario, Susan has grounds to claim her share of the goodwill based on the
dissolution of the partnership and the subsequent actions of Jane. The key issue here is
that the partnership agreement is silent regarding the goodwill, which means that the
partnership will follow the legal principles that govern the distribution of partnership
assets upon dissolution.
In South African law, goodwill is generally considered a partnership asset that should be
divided between the partners in proportion to their share in the partnership unless
otherwise agreed upon in the partnership agreement. Since the agreement does not
specify how goodwill is to be handled upon dissolution, the common law position would
apply, and Susan is entitled to a share of the goodwill, which is valued at R1 million.
Furthermore, Jane’s action of taking over the clients de facto (essentially using the
partnership’s goodwill for her personal benefit) could be seen as an unfair appropriation
of partnership assets. Susan may have a legal remedy based on unjust enrichment,
where she can claim her rightful share of the goodwill, as Jane's actions have resulted
in a benefit to her at Susan’s expense. Susan could initiate legal action for the recovery
of her share of the goodwill, possibly through a claim for damages or an accounting of
profits from the goodwill.
1.2 Five Reasons for the Termination of a Partnership
i. Mutual Agreement: Partners may agree to dissolve the partnership by mutual consent.
ii. Expiry of the Partnership Term: The partnership may be set for a specific duration or
project, and once that term expires, the partnership is automatically terminated.
iii. Death of a Partner: The death of a partner may lead to the dissolution of the
partnership unless the partnership agreement provides for continuation.
