Chan sold a business to Scott and in the process they valued the "good will" at $50,000. In the sale contract, it was agreed that this amount would be paid by Scott giving Chan 15% of the business profits until it was paid. This creates a partnership between them.

Question

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The agreement to pay a portion of profits does not necessarily create a partnership; it is a method of payment for the goodwill, not an indication of shared ownership or partnership in the business.

Chan Sold a Business to Scott and in the Process