Commentary

71.2 Prior charge to landowners

AGRICULTURE vol 2(2)
| Commentary

71.2 Prior charge to landowners

| Commentary

71.2 Prior charge to landowners

From the point of view of the landowners it is reasonable and commercial to expect a prior charge on profits as a fair return for having made available to the partnership the valuable asset represented by the farm. Clause 11 of the commercial farming partnership agreement1 is drawn on that basis. The owners must be properly advised that their return is not a guaranteed return—and it is this fact that distinguishes their return from a rental payment. Any sort of guaranteed return to the owners must be avoided because it could well be

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