Nancy, aged 17 years, and Jean, 19, planned to earn money in the summer by sewing children's clothing and placing it on consignment at a local clothing store. Each of the girls owned their own sewing machine and worked from their own home. The girls decided to pool their funds for the purchase of necessary supplies. The proceeds of any sales would be deposited in the pool. Nancy, with Jean's consent, placed an order with a fabric store for 100 metres of fabric, which she planned to use for a line of dresses she had designed. After the fabric was delivered and she had completed several dresses, Nancy informed Jean that she was going to spend the remainder of the summer travelling with her family. She then gave the remaining fabric to Jean and asked for her share of the profits to date. The fabric had not yet been paid for. Discuss the nature of this relationship, and the duties and liabilities of the parties, if any.

This case is intended to examine the elements of a partnership and the implications of infant partners. Students must decide whether the relationship is a partnership on the basis of the intention and interaction of the parties. Their activities seem to suggest they are carrying on a business in common with a view to profit. Both girls share in profits, have contributed capital, and are participating in the management of the business. Partnership by estoppel may also be established on the conduct of Nancy of holding herself out as a partner in purchasing the fabric.
Nancy, the infant, may become a legitimate partner, although the regular contract principles regarding infants will apply. Nancy may repudiate the partnership agreement before reaching the age of majority. If she does so, she erases her responsibility for partnership debts or liabilities, in particular, payment for the fabric. As an infant, however, Nancy is not entitled to her share of profits until all the partnership liabilities have been paid.
Nancy's departure potentially triggers a dissolution of the partnership to which the standard rules and procedure of dissolution would apply. The assets must be liquidated, debts satisfied, capital advances returned and then profits, if anything remains, are distributed on the agreed proportional basis.