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BSCI 121 Test 3
U7
| Term | Definition |
|---|---|
| Partnership | Legal relationship created by contract between 2+ persons where each person agrees to make some contribution that is for the joint benefit of the parties & of which the object is to make a profit. |
| Characteristics | Estate of business = estate of members Rights & obligations are members Mutual benefits Assets belong to members in undivided shares Will not exist after death of partner No legal personality |
| Partnership laws | No Partnership Act, so we use the Common Law Guidelines are in the Companies Act, Consumer Protection Act & Insolvency Act No legal formalities to form a partnership One formality: Name must be registered |
| Types of partnerships | 1. Universal/ordinary partnership - Universorum bonorum 2. Silent partnerships 3. Partnership en Commandite |
| Universal Partnership | All assets obtained during existence of partnership belongs to the partnership |
| Silent Partnership | Business is operated under the name of ONLY SOME partners. Silent partners don't take part in day-to-day operations. Share in profits & liable for losses pro rata (depending on terms) Partial shielding from external liabilities Public doesn't know |
| Partnership en Commandite | 2 clauses of partners: General & limited (commandite) General: manage & have unlimited liability. Commandite: Contribute capital but not management. Limited liability |
| Silent vs Commandite | Silent: Unknown to public; Commandite: Known as contributor Silent: Liable for losses as per agreement; Commandite: Liable strictly limited to contribution |
| Partnership essentialia | Each member must contribute money labour/skills or assets or a combination thereof. Sole purpose = profit Mutual benefit |
| Partnership naturalia | Partners can alter them, but in the absence: - Profit shares ito contributions - Assets does not belong to partnership but to members is undivided shares - Member can be excl from contributing to creditors - Memebers can be excl from representation |
| Partners | 2-20 Business comes to an end: New members, death or change of scope of business |
| Partnership fund | Contributions form part of PF Ownership: partnership property Use: Right of use - part of partnership property Co-owners of assets of duns in joint undivided shares - share size depends on agreement |
| Assets | Assets only used for partnership purposes For own use: Permission & liable toward partners |
| Duties of partners | 1. Fiduciary duty 2. Duty towards contribution 3. Duty to share in losses 4. Act with care, skill & maintain bona fides |
| Fiduciary duty | Relationship between brothers (1961) Pardon v Muller If relationship is scared, court can dissolute p/s. Duty can continue after dissolution |
| Duty towards contribution | Cannot be required to contribute more than agreed upon, but if payment fails, interest is charged Joubert v Tarry |
| Duty to share losses | Links to right to share profits, if no specific stipulation, you look at how profit is shared |
| Duty to act with care, skill & maintain bona fides | Applicable to ALL partners Test: how do you act in your personal life? |
| Partner rights | When dissolved, partners entitled to share of assets (naturalia) Partners are entitled to profits in accordance with PA (essentialia) Remuneration of services only if agreed upon (naturalia) Management (naturalia) Access to records (naturalia) |
| Actio pro socio | A partner acts against another to enforce PA |
| Actio communi dividundu | Division of property held in common |
| Authority | Power to perform legal acts on behalf of partnership Every partner has automatic authority to bind p/s within business scope (mutual mandate) |
| Rule of Turquand | P/s is bound to contract when 3rd party is bona fide (didn't know that the party is acting outside scope of without authority) |
| Estoppel | Legal rule barring inconsistency Partner cannot excuse themselves from their own wrong doing |
| Doctrine of estoppel | Remedy to person injured by deceit Deceived stops deceiver form relying on true state of affairs Deception is true state of affair Req: unlawful rep, culpable rep by deceiver, deceived relied on it, to the deceived's loss |
| Doctrine of undisclosed principle | Intention not conclusive if representative did not disclose they were acting on behalf of p/s P/s not bound since 3rd party contracted in personal capacity |
| Delictual liability | Delict: Negligent or intentional act/mission in breach of duty imposed by law to take care and which results in damages to 3rd party Must be proved by party that claims it P/s bound to delicts due to mutual mandate |
| Proof delictual claim | Conduct, Wrongfulness, Fault, Damage, Causation |
| Criminal liability | P/s is not a legal person & cannot commit a crime or be prosecuted Partners CAN commit crimes All other partners are deemed guilty, except if it can prove they did not take part commission of offence & they could not have prevented it |
Created by:
CARA.FAURIE
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