FBE2604
Assignment 1 Semester 1 2025
Unique #:
Due Date: 2025
Detailed solutions, explanations, workings
and references.
+27 81 278 3372
, QUESTION 1 (3 ANSWERS PROVIDED)
A partnership is a legal relationship created by way of a contract between two or
more persons. Each partner must contribute something of value to the
partnership, and the business must be carried on for the joint benefit of all
partners, with the objective of making a profit. According to the essentialia of a
partnership, the agreement must include a contribution by each partner, a
business operated for the joint benefit of all parties, an intention to make a profit,
and a legally valid agreement.
In analyzing the potential partnership between Sebo, Tiyani, and Tshepo, it is
necessary to determine whether their respective contributions align with the
requirements of a valid partnership agreement.
Evaluation of Sebo’s Contribution
Sebo intends to contribute R15,000 but only on the condition that, should the
partnership fail, she will be reimbursed by the other two partners. This condition
violates a fundamental requirement of a partnership—namely, that a partner’s
contribution must be exposed to the risks of the business. A valid contribution
must have an economic value and must be subject to the potential risks and
rewards of the business.
In Pezzutto v Dreyer (1992 (3) SA 397 (A)), the court held that a valid
partnership cannot exist where a partner’s contribution is insulated from risk.
Since Sebo’s financial contribution is conditional and not genuinely at risk, her
contribution does not meet the requirement of an essential element of a
partnership.
Evaluation of Tiyani’s Contribution
Tiyani intends to contribute his expertise as a qualified chef. According to case
law, skills and knowledge can constitute a valid contribution in a partnership,
provided they have commercial value and are applied for the benefit of the
partnership. In Joubert v Tarry and Co (1915 TPD 277), the court confirmed that
Varsity Cube 2024 +27 81 278 3372
Assignment 1 Semester 1 2025
Unique #:
Due Date: 2025
Detailed solutions, explanations, workings
and references.
+27 81 278 3372
, QUESTION 1 (3 ANSWERS PROVIDED)
A partnership is a legal relationship created by way of a contract between two or
more persons. Each partner must contribute something of value to the
partnership, and the business must be carried on for the joint benefit of all
partners, with the objective of making a profit. According to the essentialia of a
partnership, the agreement must include a contribution by each partner, a
business operated for the joint benefit of all parties, an intention to make a profit,
and a legally valid agreement.
In analyzing the potential partnership between Sebo, Tiyani, and Tshepo, it is
necessary to determine whether their respective contributions align with the
requirements of a valid partnership agreement.
Evaluation of Sebo’s Contribution
Sebo intends to contribute R15,000 but only on the condition that, should the
partnership fail, she will be reimbursed by the other two partners. This condition
violates a fundamental requirement of a partnership—namely, that a partner’s
contribution must be exposed to the risks of the business. A valid contribution
must have an economic value and must be subject to the potential risks and
rewards of the business.
In Pezzutto v Dreyer (1992 (3) SA 397 (A)), the court held that a valid
partnership cannot exist where a partner’s contribution is insulated from risk.
Since Sebo’s financial contribution is conditional and not genuinely at risk, her
contribution does not meet the requirement of an essential element of a
partnership.
Evaluation of Tiyani’s Contribution
Tiyani intends to contribute his expertise as a qualified chef. According to case
law, skills and knowledge can constitute a valid contribution in a partnership,
provided they have commercial value and are applied for the benefit of the
partnership. In Joubert v Tarry and Co (1915 TPD 277), the court confirmed that
Varsity Cube 2024 +27 81 278 3372
