In CASE 19

Multiple Choice

In CASE 19.2 Holmes v.Lerner (1999) ,Lerner (a wealthy entrepreneur) talked to Holmes about setting up a cosmetics business called Urban Decay.Holmes received assurances from Lerner about finances and setting up the business.Later Lerner negotiated a separate deal for Urban Decay without including Holmes,and drafted articles of incorporation which gave Holmes only a 1 percent interest in Urban Decay.Holmes sued,insisting that even though they had no written agreement,she should have been a full and equal partner.How did the court rule and why?

A) The court held for Lerner as a full and equal partner,because the oral and written expressions and discussion of profits was a prerequisite to form a partnership.
B) The court held for Lerner; there was insufficient evidence of intentions to form a partnership.
C) The court held for Holmes as a full and equal partner,because the oral and written expressions and discussion of profits was a prerequisite to form a partnership.
D) The court held for Holmes,because under state law,she automatically became a limited partner.