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Lee and Morgan orally agreed to run a small kayak-rental business as co-owners. Lee contributed $80,000 in cash. Morgan contributed $20,000 in cash and worked full time managing rentals. They never discussed profit shares, loss shares, management voting, or salary. At the end of the first season, the business had $30,000 in profits after expenses. Morgan demanded 70 percent of the profits because Morgan did most of the labor. Lee demanded 80 percent because Lee contributed most of the capital.
The partners also disagree about whether Morgan can receive a salary for ordinary management work and whether Lee has more voting power because of Lee's larger capital contribution.
How should the disputes over profits, losses, salary, and management rights be resolved under default general partnership rules?