FBE2604
Assignment 1
Semester 1
Due 24 March 2026
, Question 1: Whether a Valid Partnership Exists Between Thabo and Lerato
To determine whether a valid partnership exists, South African law requires an analysis
of the essentialia (essential elements) of a partnership. The classic test comes from
Joubert v Tarry & Co 1915 TPD 277, which is still applied in UNISA marking. According
to this case, a valid partnership must meet three requirements:
1. Each party must contribute something to the partnership
2. The business must be carried on for the joint benefit of the parties
3. The object must be to make a profit
Each element must be applied to the facts.
1. Contribution by Each Partner
A valid partnership requires that each party contributes something of value. The
contribution does not need to be money. It can include skill, labour, expertise, or
contacts (Joubert v Tarry & Co 1915 TPD 277).
Application to the facts: Thabo contributes R100 000 in cash. Lerato contributes
expertise, industry contacts, and manages daily operations. South African law
recognises non-monetary contributions as valid partnership contributions (Nagel et al.,
2020).
Conclusion: This requirement is satisfied because both parties made identifiable
contributions.
2. Business Carried on for Joint Benefit
The parties must intend to carry on the business for their joint benefit, meaning they
both share in the risks and rewards of the business (Pezzutto v Dreyer 1992 (3) SA 379
(A)).
A key issue here is whether the parties share both profits and losses, as partnership
involves mutual risk.
Assignment 1
Semester 1
Due 24 March 2026
, Question 1: Whether a Valid Partnership Exists Between Thabo and Lerato
To determine whether a valid partnership exists, South African law requires an analysis
of the essentialia (essential elements) of a partnership. The classic test comes from
Joubert v Tarry & Co 1915 TPD 277, which is still applied in UNISA marking. According
to this case, a valid partnership must meet three requirements:
1. Each party must contribute something to the partnership
2. The business must be carried on for the joint benefit of the parties
3. The object must be to make a profit
Each element must be applied to the facts.
1. Contribution by Each Partner
A valid partnership requires that each party contributes something of value. The
contribution does not need to be money. It can include skill, labour, expertise, or
contacts (Joubert v Tarry & Co 1915 TPD 277).
Application to the facts: Thabo contributes R100 000 in cash. Lerato contributes
expertise, industry contacts, and manages daily operations. South African law
recognises non-monetary contributions as valid partnership contributions (Nagel et al.,
2020).
Conclusion: This requirement is satisfied because both parties made identifiable
contributions.
2. Business Carried on for Joint Benefit
The parties must intend to carry on the business for their joint benefit, meaning they
both share in the risks and rewards of the business (Pezzutto v Dreyer 1992 (3) SA 379
(A)).
A key issue here is whether the parties share both profits and losses, as partnership
involves mutual risk.
