- 10 Marks
BCL – May 2020 – L2 – Q2a – Agency
Advise on whether a firm should bear the cost of an expenditure incurred by a partner during an assignment.
Question
Jabi is a partner of an Accounting Firm. The firm’s office is located in Accra. In May 2019, Jabi was assigned an approved accounting duty outside Accra with the use of the Firm’s car. During the journey, the car had a burst tyre. The driver of the car, for unexplained reasons, had no spare tyre on the car. He therefore recommended the purchase of a brand new tyre, which Jabi bought with his personal money. He obtained a receipt in the name of the Firm.
Jabi sought for a refund of his money amounting to GH¢1,280 for the tyres bought. The Managing Partner refused the refund, saying it was the sole responsibility of Jabi to bear the expenditure.
Required:
i) Advise the Manager as to why the Firm should bear the full or part of the cost and not only Jabi.
(4 marks)
ii) Advise Jabi why it is not the sole responsibility of the firm to bear the cost.
(6 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Agency, Firm Liability, Partnership Act 1962, Partnership Law, Reimbursement
- Level: Level 1
- Topic: Agency Law
- Series: MAY 2020