F
, BE2604 Assignment 1 Semester 1 2026 - Due 26 Mar
ch 2026;
Question 1
Whether a valid partnership exists between Thabo and Lerato
A partnership in South African law is a contract between two or more
persons who agree to contribute something to a lawful business,
carried on for their joint benefit, with the object of making and
sharing profits. The essentialia of a partnership were confirmed in
Joubert v Tarry 1915 AD 277.
(a) Contribution by the parties
Thabo contributed R100 000 in cash. Lerato contributed her expertise,
industry contacts and management services. A contribution need not
be monetary and may consist of skill or labour. This requirement is
therefore satisfied.
(b) Business carried on for the joint benefit of the parties
For a partnership to exist, the parties must share both profits and
losses. Thabo insists that his capital contribution must be repaid in full
even if the business fails. This indicates that Thabo does not intend to
share in the risk of loss, which is inconsistent with a partnership
relationship.
(c) Object to make and share profits
Although the business aims to make a profit, Lerato is only entitled to
30% of the profits if the business earns more than R200 000 net profit
per year. This conditional profit entitlement resembles remuneration
rather than genuine profit-sharing. In Pezzutto v Dreyer 1992 (3) SA
, BE2604 Assignment 1 Semester 1 2026 - Due 26 Mar
ch 2026;
Question 1
Whether a valid partnership exists between Thabo and Lerato
A partnership in South African law is a contract between two or more
persons who agree to contribute something to a lawful business,
carried on for their joint benefit, with the object of making and
sharing profits. The essentialia of a partnership were confirmed in
Joubert v Tarry 1915 AD 277.
(a) Contribution by the parties
Thabo contributed R100 000 in cash. Lerato contributed her expertise,
industry contacts and management services. A contribution need not
be monetary and may consist of skill or labour. This requirement is
therefore satisfied.
(b) Business carried on for the joint benefit of the parties
For a partnership to exist, the parties must share both profits and
losses. Thabo insists that his capital contribution must be repaid in full
even if the business fails. This indicates that Thabo does not intend to
share in the risk of loss, which is inconsistent with a partnership
relationship.
(c) Object to make and share profits
Although the business aims to make a profit, Lerato is only entitled to
30% of the profits if the business earns more than R200 000 net profit
per year. This conditional profit entitlement resembles remuneration
rather than genuine profit-sharing. In Pezzutto v Dreyer 1992 (3) SA
