BUSINESS LAW QUIZ

March, 2019

Instructions:
1. Use ENGLISH to answer all the questions.
2. Students are expected to make a legal analysis based
on the facts, legal reasoning, prevailing laws and
regulations applicable according to indonesian law
to the situation/case.

CASE I

Galih Agung, a 22 years old student, works as an hourly employee at a small

Café owned by Ms. Nikita Kencana, a widow of 17 years old, as the manager.
Agung has worked in the Café for four years and he has performed his duties
diligently and Ms. Kencana is very satisfied with his performance although
Agung works as a part timer where he can leave his work to attend classes.

With the increase of tourists visiting Bandung, especially during the week-ends
and public holidays, the Café business flourishes as it becomes a popular place
for tourists to have coffee and snacks. Such new conditions inspire Ms.
Kencana to expand the capacity and service of the Café and she is thinking to
re-decorate and to add more chairs and tables besides providing new menu.

Ms. Kencana came from a very wealthy family, to increase her capital in the
business is not a problem, and therefore she plans to implement her desires to
extend her Café. Two years ago, she has asked her brother Raja Ahmad, an
18 years old student to join her in the business and she also offered Galih
Agung to join her in the business. He will receive 20% (twenty percent) share
of the net profit of the business after all expenses were paid, including labour,
supplies, and other expenses. Agung contributed no capital to the enterprise
but he provides his services as the person in charge of the day-to-day
operations of the Café.

The compensation was paid on an irregular basis - every several weeks the
three of them will sit down and compute the income received and expenses paid
and then a check will be issued to Agung for 20% of the balance.

Nikita Kencana, Raja Ahmad and Galih Agung did not enter into a written
partnership agreement, the name of the Café does not reflect the partnership
at all. The participation of Agung in the enterprise was based on a verbal
statement by Ms. Kencana that he will be paid on a commission basis so that
he will have a sense of belonging to the enterprise if he has an interest in the
business.

Ms. Kencana handled all the finances and books of the Café and borrowed
money from the bank solely in her own name and/or with her brother Raja for
business purposes. Agung managed the operations of the Café, supervise the
services by the chef and also the waiters and oversaw the performance of
supply contracts.

At the end of the year 2005 after the expansion Agung knew that the revenue
of the business is increasing so well and he suspect that he does not get the
full value of the 20% interest he has in the business. He has requested Agung
to provide him with the books of the enterprise, because as a partner he has
the right to see all the books of the enterprise so that he has the actual and
whole picture of the financial condition of the enterprise, but Ms. Kencana has
always excuses for not letting him see the books and also said that there were
never a partnership between them.

Agung was very unhappy about this situation and he has brought an action
against Ms. Kencana for dissolution of the alleged partnership and he sought
payment for 20% of the business inventory.

QUESTIONS
1. Do you think a partnership was formed in this case? Should all
partnership agreements be required to be in writing? Can Agung
make a contract with a food supplier for the Café?
2. Do Nikita Kencana and her brother Raja Ahmad have the capacity to
enter into a partnership agreement or any agreement with third
parties. As Manager of the Café, Agung has made a contract with an
event organizer to arrange a monthly entertainment at the Café
including life show performances by girls specifically for men, do you
think that this contract can be enforceable?
3. Who do you think has the capacity to make a work agreement with
the employee of the café? Explain your answer.
4. Do you think Ms. Kencana can get a loan from bank by using Raja
Ahmad’s land as collateral? What should Ms. Kencana do to get a
loan from bank?