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Question

X and Y are partners. They decided to dissolve their firm. After dissolution they sold the goodwill of firm to W. State the legal position of the following acts:
Case (a): Can X or Y carry on a business competing with that of W?
Case (b): Can X or Y advertise: such business?
Case (C): Can X or Y .use the firm name if there. is no agreement l between .them and LIP?
Case (d): an X or Y represent himself as carrying on firms business it there is no agreement between them and W?
Case (e) Can X or Y solicit the business from the customers of dissolved firm if there is no agreement between them and Vi?
Case (f): Can X or Y make an agreement with W that either of them will not carry on any business similar to that of a firm within a specified period or within specified limits?

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Solution

Solution: Section. to which the given problem relates: Section 55(2).
Decision and Reason: Cases (a) and (b): Yes. Section 55 entitle them to do so.
Cases .( c), (d) and (e): No. Section 55 does not entitle them to do so by making specific provision to that effect.
Case (f): Section. to which the. given problem. relates; Section 55(3).
Decision: Yes.
Such agreement shall ,be.valid if the restrictions, imposed are reasonable.

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