Musa, Ahmed, and Tukur formed a partnership as equal partners to engage in haulage business and adopted the partnership law as their partnership agreement. Due to his vast experience in haulage business, the partners appointed Tukur as the firm’s Managing Director with full powers to execute all business transactions for the firm, while Musa and Ahmed were to oversee the office administration.

Due to unfavorable economic conditions, the firm suffered huge losses for a couple of years, which caused huge indebtedness. The partnership was dissolved, leaving Tukur with an alleged incurred liability for the firm’s debts. Tukur claims that Musa and Ahmed were still in full control of the firm’s operations and that the firm’s liability alone is to be cleared. Tukur seeks your advice.

Required:
Advise Tukur, stating the legal issues involved. (10 Marks)

Tukur can be advised as follows:

  • The Partnership Act stipulates that all partners are liable for the debts and obligations incurred by the firm during the existence of the partnership, regardless of their specific roles within the partnership.
  • Joint and Several Liability: Each partner in a partnership is jointly and severally liable for the debts and obligations of the firm. Therefore, even though Tukur was the Managing Director, he cannot be solely responsible for the firm’s debts. Musa and Ahmed, as equal partners, share the liability for the debts incurred.
  • Authority of Partners: The partnership agreement empowered Tukur to execute business transactions. His actions as Managing Director are binding on the partnership, but the liability for losses is borne by all the partners equally, as there was no express agreement stating otherwise.
  • Dissolution and Liability: Upon the dissolution of the partnership, the liability of the partners for any debts remains. If any partner pays more than their share of the firm’s debts, that partner may seek reimbursement from the others.

In summary, Tukur is not personally liable for the firm’s debts. Musa and Ahmed also share responsibility for settling the liabilities of the dissolved partnership.

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