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 If you were advising Tina about entering into a business with Tony and Ethel what would you advise?

July 12, 2021
Christopher R. Teeple

1.  Mary goes to a used car dealership to buy a car.  The used car salesperson tells Mary the car is in fantastic condition.  For various reasons Mary has no confidence in what she is being told but it is more of a “gut feeling” than anything she can point to.  Mary buys the car for $10,000 and drives it off the lot.  One week later the car develops major problems and keeps stalling out and Mary can not drive it safely.  She takes it to a car mechanic and is told it will cost $3,000. to fix.  Does Mary have any recourse over the car dealership? Explain your answer fully exploring all issues.
2.
Tina is friends with Tony and Ethel and one night they decide to start a new business.  Tina likes Tony but is not sure of Ethel because she is a multi-millionaire and acts “snooty” and acts better than everyone else.  If you were advising Tina about entering into a business with Tony and Ethel what would you advise?  In the discussion talk about both partnership and limited partnerships.  What if Ethel goes into the business relationship as a limited partner; does that change your advice?  Would you advise Tina to enter as a partner or limited partner and why? I have left the type of business blank so if it helps your analysis feel free to make a business up.  Explain your answer fully exploring all issues.

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