Question

Teresa, Peter, and Walker were partners under a written agreement made in 1981 and continue

for 10 years. During 1988, Walker, being indebted to Rebecca, sold and conveyed his interest

in the partnership to her. Teresa and Peter paid Rebecca $5,000 as Walker’s share of the profits for 1988, but refused Rebecca permission to inspect the books, or come to partnership meetings.

Rebecca brought an action in equity for an accounting to force them to allow her to inspect the

books and participate in management. Will she be successful? Explain.

Answer 1

Rebecca is unlikely to win her action to inspect books or participate in partnership management meetings, as the sale of Walker's interest probably only gave her rights to profit shares, not to the duties and privileges of a partner.

Step-by-step explanation:

Rebecca's attempt to force Teresa and Peter to allow her to inspect the partnership books and participate in management is unlikely to be successful. When Walker sold his interest in the partnership to Rebecca during 1988, she may have acquired a right to his share of the profits. However, without being a named partner in the original written agreement, she does not automatically gain the rights of a partner, such as inspecting books or participating in management meetings.

In many jurisdictions, the assignment of partnership interest entitles the assignee to the economic benefits, such as profit shares, but does not confer the authority or responsibility of a partner. Without the consent of the remaining partners, Rebecca cannot assume the roles designated for partners within the partnership, which includes management decisions and access to the books.

Therefore, unless the original partnership agreement includes clauses that allow for the transfer of full partnership rights, or unless Teresa and Peter agree to revise the partnership to include Rebecca as a partner with such rights, Rebecca will not have the legal footing to demand access to the books or inclusion in management meetings.