1. Review the general concepts and principles of Contracts.

  How
are those concepts and principles correlated with Contract of
Partnership?

Because Contract of Partnership is a type of Contract, some of its

concepts and principles fall under the general concepts and
principles of Contracts. A partnership is formed when two or more
persons bind themselves to contribute to the partnership with the
intention of dividing the profits. For a partnership to be
established, the essential elements of a contract: consent, object,
and cause, must be present.

Consent: The partners give their consent when it is expressed or

implied that they agree with the terms of the partnership.

Like contracts, only persons with capacity can give their consent
and enter a contract of partnership.

Object: The partners are bound by contract to contribute money,

property, or industry to the partnership.

Cause: The partners intend to divide the profits gained by the

partnership among themselves.

A contract of partnership is consensual, nominate, bilateral,

onerous, commutative, principal, and preparatory. These
characteristics of contract of partnership are present in the
classification of contracts.

 2.Illustrate the characteristics of the contract of partnership using the

following case:

       Kimmy and Chinny agreed to sell textbooks to their classmates.

Kimmy provided the money, P50,000.00, to buy the books, and
Chinny purchased them from a bookshop in Recto, Manila.  Kimmy
was particularly negative on travelling to Manila due to the health
risks involved due to the pandemic, and Chinny agreed to take on the
health and safety risks as the purchasing of their products was her
contribution. Their estimate was to sell the books with 20% mark-up
as there was no other way their classmates can buy them as there was
no distributor or publishing house outside Metro Manila which was on
lockdown.  By the middle of the semester, only 70% of the books were
sold, giving Kimmy and Chinny only break-even sales.  Kimmy
revealed that she borrowed the P50,000.00 from a micro-finance
lending cooperative for the purpose of their business. The said loan of
P50,000.00 is not yet paid and earning interest.

Consensual – It is consensual because their contract of partnership is

perfected by their agreement to form a partnership to sell books

Nominate –When Kimmy and Chinny give their consent, they form a
contract of partnership

Bilateral – Two Persons, Kimmy and Chinny have an agreement to

contribute to the partnership and divide profit and obligations.

Commutative – Kimmy’s contribution of P50000 and Chinny’s

contribution of purchase of merchandise and taking on the health and
safety risks is considered an equivalent of each other.

Principal – Their contract of partnership is principal because it does

not depend on the validity of another contract.

Preparatory – It is preparatory because as their partnership begins

business, their contract of partnership became a means to enter a loan
contract for the partnership.

Onerous – It is onerous because they agree to contribute their money

and industry to make profit