, Question 1
In order to determine whether a valid partnership exists between Thabo and Lerato, it is necessary
to consider the essentialia (essential requirements) of a partnership agreement as developed in
South African law and case law, and apply them to the facts.
1. Legal principles: Essentialia of a partnership
South African courts have consistently accepted Pothier’s formulation of the requirements for a
partnership, as confirmed in Joubert v Tarry & Co 1915 TPD 277, and reiterated in later cases such
as Pezzutto v Dreyer and Bergh v Viljoen. These requirements are:
Each partner must contribute something to the partnership (money, labour, or skill);
The business must be carried on for the joint benefit of the parties; and
The object of the business must be to make a profit (Bergh v Viljoen 2014; Pezzutto v Dreyer;
Joubert v Tarry & Co) .
These requirements are also reflected in more recent case law, which emphasises contribution,
joint benefit, and profit motive as the core essentialia (J J J B v S J M B 2025) . Additionally, the
parties must have the intention to create a partnership, and this intention must be determined
from their agreement and conduct (Deary v CIR; J J J B v S J M B 2025) .
Furthermore, while a partnership agreement need not be in writing and may be oral or tacit, it
cannot exist unless the essentialia are satisfied (Ponelat v Schrepfer; Festus v Worcester
Municipality) .
2. Application to the facts
(a) Contribution by each party
Thabo contributed R100 000 in cash, while Lerato contributed expertise, contacts, and
management services. Contributions need not be monetary, and labour or skill is sufficient (Joubert
v Tarry & Co principle) . Therefore, this requirement is likely satisfied.
(b) Business carried on for joint benefit
A key indicator of joint benefit is that the parties share in the profits and losses of the enterprise.
South African law generally requires that partners benefit jointly, meaning one party cannot take
profits while another bears all losses (general partnership principle) .
Here:
Lerato only receives 30% of profits if net profits exceed R200 000;
Thabo insists his capital must be repaid even if the business fails;
Thabo seeks to hold Lerato liable for losses.
This arrangement suggests a lack of true joint benefit because Lerato’s entitlement to profit is
conditional and Thabo seeks protection against losses. Such terms resemble a financing
arrangement rather than mutual participation as partners. Thus, this requirement is doubtful.
In order to determine whether a valid partnership exists between Thabo and Lerato, it is necessary
to consider the essentialia (essential requirements) of a partnership agreement as developed in
South African law and case law, and apply them to the facts.
1. Legal principles: Essentialia of a partnership
South African courts have consistently accepted Pothier’s formulation of the requirements for a
partnership, as confirmed in Joubert v Tarry & Co 1915 TPD 277, and reiterated in later cases such
as Pezzutto v Dreyer and Bergh v Viljoen. These requirements are:
Each partner must contribute something to the partnership (money, labour, or skill);
The business must be carried on for the joint benefit of the parties; and
The object of the business must be to make a profit (Bergh v Viljoen 2014; Pezzutto v Dreyer;
Joubert v Tarry & Co) .
These requirements are also reflected in more recent case law, which emphasises contribution,
joint benefit, and profit motive as the core essentialia (J J J B v S J M B 2025) . Additionally, the
parties must have the intention to create a partnership, and this intention must be determined
from their agreement and conduct (Deary v CIR; J J J B v S J M B 2025) .
Furthermore, while a partnership agreement need not be in writing and may be oral or tacit, it
cannot exist unless the essentialia are satisfied (Ponelat v Schrepfer; Festus v Worcester
Municipality) .
2. Application to the facts
(a) Contribution by each party
Thabo contributed R100 000 in cash, while Lerato contributed expertise, contacts, and
management services. Contributions need not be monetary, and labour or skill is sufficient (Joubert
v Tarry & Co principle) . Therefore, this requirement is likely satisfied.
(b) Business carried on for joint benefit
A key indicator of joint benefit is that the parties share in the profits and losses of the enterprise.
South African law generally requires that partners benefit jointly, meaning one party cannot take
profits while another bears all losses (general partnership principle) .
Here:
Lerato only receives 30% of profits if net profits exceed R200 000;
Thabo insists his capital must be repaid even if the business fails;
Thabo seeks to hold Lerato liable for losses.
This arrangement suggests a lack of true joint benefit because Lerato’s entitlement to profit is
conditional and Thabo seeks protection against losses. Such terms resemble a financing
arrangement rather than mutual participation as partners. Thus, this requirement is doubtful.
