CLA2601
Assignment 1
Semester 1 | Due 7
April 2025
NO PLAGIARISM
[Pick the date]
[Type the company name]
, Exam (elaborations)
CLA2601 Assignment 1 Semester 1 | Due 7
April 2025
Course
Commercial Law IIA (CLA2601)
Institution
University Of South Africa (Unisa)
CLA2601 Assignment 1 Semester 1 | Due 7 April 2025. All questions
answered.
Question 1 Zane, Bongi, Muthu and Sophy are friends who decide to form a
partnership to purchase and sell new and secondhand mobile phones. Sophy
and Bongi will provide the capital to purchase the initial stock for the
partnership. Zane will be responsible for the repair of mobile phones and
Muthu will be responsible for the day-to-day activities regarding the sales,
administration and marketing of the mobile phone business. The parties
agree that the profit derived from the partnership will be divided equally
between Bongi, Sophy and Zane, and that Muthu will receive a monthly
salary for his services. Discuss and explain whether the above terms
constitute a valid partnership agreement. Refer to relevant case law in your
answer. 10 marks
Definition and Requirements of a Valid Partnership
A partnership is defined in South African law as a contract between two or more persons who
agree to carry on a business in common with the object of making a profit, and to share in the
profits and losses of the business.
This is supported in the case of Pezzutto v Dreyer 1992 (3) SA 379 (A), where the court
reiterated the key elements of a valid partnership.
There are four essential elements that must be present for a valid partnership to exist:
1. Each partner must bring something into the partnership (money, goods, labour, or
skill).
2. The partnership must be carried on for the joint benefit of all parties.
3. The object must be to make a profit.
4. The agreement must provide for the sharing of profits and losses.
Application to the Facts
Assignment 1
Semester 1 | Due 7
April 2025
NO PLAGIARISM
[Pick the date]
[Type the company name]
, Exam (elaborations)
CLA2601 Assignment 1 Semester 1 | Due 7
April 2025
Course
Commercial Law IIA (CLA2601)
Institution
University Of South Africa (Unisa)
CLA2601 Assignment 1 Semester 1 | Due 7 April 2025. All questions
answered.
Question 1 Zane, Bongi, Muthu and Sophy are friends who decide to form a
partnership to purchase and sell new and secondhand mobile phones. Sophy
and Bongi will provide the capital to purchase the initial stock for the
partnership. Zane will be responsible for the repair of mobile phones and
Muthu will be responsible for the day-to-day activities regarding the sales,
administration and marketing of the mobile phone business. The parties
agree that the profit derived from the partnership will be divided equally
between Bongi, Sophy and Zane, and that Muthu will receive a monthly
salary for his services. Discuss and explain whether the above terms
constitute a valid partnership agreement. Refer to relevant case law in your
answer. 10 marks
Definition and Requirements of a Valid Partnership
A partnership is defined in South African law as a contract between two or more persons who
agree to carry on a business in common with the object of making a profit, and to share in the
profits and losses of the business.
This is supported in the case of Pezzutto v Dreyer 1992 (3) SA 379 (A), where the court
reiterated the key elements of a valid partnership.
There are four essential elements that must be present for a valid partnership to exist:
1. Each partner must bring something into the partnership (money, goods, labour, or
skill).
2. The partnership must be carried on for the joint benefit of all parties.
3. The object must be to make a profit.
4. The agreement must provide for the sharing of profits and losses.
Application to the Facts
