, FEB2604 Assignment 1 (COMPLETE ANSWERS) Semester 1 2026
– DUE 24 March 2026 ;100% 100% trusted ,comprehensive and
complete reliable solution with clear explanation
QUESTION 1
With reference to the essentialia of a partnership agreement and relevant case law,
advise whether a valid partnership exists between Thabo and Lerato. (10 marks)
Answer
In determining whether a valid partnership exists between Thabo and
Lerato, we must consider the essentialia of a partnership agreement
under South African law. A partnership is defined in the Partnership
Act 1956 as a relationship between persons who carry on business in
common with a view to profit. The essentialia include
1. Agreement to carry on a business:
Thabo and Lerato agreed to start a skincare business, which shows a
common intention to operate commercially. The agreement does not
need to be in writing to be valid; a verbal agreement can create a
partnership if the essentialia are met. By agreeing on the nature of the
business and their respective roles, the first element of a partnership—
consensus ad negotium—is satisfied. Courts have consistently held that
a mutual intention to operate a business together is sufficient.
2. Mutual contribution:
Both parties contributed something of value to the business: Thabo
provided R100 000 in cash, and Lerato contributed her expertise,
contacts, and management services. However, Thabo’s cash is a loan,
guaranteed to be repaid regardless of profit or loss, which is inconsistent
– DUE 24 March 2026 ;100% 100% trusted ,comprehensive and
complete reliable solution with clear explanation
QUESTION 1
With reference to the essentialia of a partnership agreement and relevant case law,
advise whether a valid partnership exists between Thabo and Lerato. (10 marks)
Answer
In determining whether a valid partnership exists between Thabo and
Lerato, we must consider the essentialia of a partnership agreement
under South African law. A partnership is defined in the Partnership
Act 1956 as a relationship between persons who carry on business in
common with a view to profit. The essentialia include
1. Agreement to carry on a business:
Thabo and Lerato agreed to start a skincare business, which shows a
common intention to operate commercially. The agreement does not
need to be in writing to be valid; a verbal agreement can create a
partnership if the essentialia are met. By agreeing on the nature of the
business and their respective roles, the first element of a partnership—
consensus ad negotium—is satisfied. Courts have consistently held that
a mutual intention to operate a business together is sufficient.
2. Mutual contribution:
Both parties contributed something of value to the business: Thabo
provided R100 000 in cash, and Lerato contributed her expertise,
contacts, and management services. However, Thabo’s cash is a loan,
guaranteed to be repaid regardless of profit or loss, which is inconsistent
