Final answer:
In Olley v Marlborough, the ratio is 1:1. This means that each party is entitled to an equal share of the profits.
Step-by-step explanation:
In the case of Olley v Marlborough, two partners, Olley and Marlborough, were engaged in a business venture. The partnership agreement stated that profits and losses would be shared equally between the partners. However, a dispute arose when Olley claimed that he was entitled to a larger share of the profits due to his greater input into the business.
The court had to determine whether Olley's claim was justified or whether the partnership agreement should be followed. The court held that the partnership agreement should be upheld and that each partner was entitled to an equal share of the profits. The ratio in this case is 1:1, which means that each partner is entitled to an equal share of the profits. This ratio is determined by dividing the profits equally between the partners. In other words, if the total profits are £100, each partner will receive £50.
The court's decision in this case highlights the importance of clear and detailed partnership agreements. By specifying how profits and losses will be shared, disputes can be avoided and all parties can have a clear understanding of their entitlements. In cases where no such agreement exists, the court may have to make a decision based on other factors, such as the relative contributions of each partner or the nature of the business venture. However, in most cases, it is advisable for partners to have a detailed agreement in place to avoid any ambiguity or disagreement over profit-sharing arrangements.