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Khanh and Lan are partners in an unlimited

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Khanh and Lan are partners in an unlimited partnership. The relationship between the partners has deteriorated recently and Lan has announced that she will leave the partnership immediately to set up a business on her own.The partnership is currently working on a major project that will not be completed for another 12 months. Lan’s technical expertise is vital to the project, and without her partner Khanh will be unable to fi nish the project on time.Soon after Lan announced her decision to leave, three of the partnership’s customers informed Khanh that they would be dealing with Lan’s new business in the future. It became apparent from the discussions that Lan had been negotiating new contracts with these customers for several months.Required:

(a) Discuss the potential consequences of Lan’s immediate withdrawal from the partnership. (6 marks)

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