IV.

May juridical entities enter into contract and in the process submit themselves to the laws and legal principles affecting
partnership? In what way, if ever?

May juridical entities enter into contract?

The general rule is, unless authorized by statute or by its charter, a corporation is without
capacity or power to enter into a contract of partnership. This limitation, it is said, is based on public
policy, since in a partnership the corporation would be bound by the acts of persons who are not its
duly appointed and authorized agents and officers, which would be entirely inconsistent with the
policy of the law that the corporation shall manage its own affairs separately and exclusively.

Although a corporation cannot enter into a partnership contract, an exception to the

general rule is that: Yes it may, however, enter into a contract such as joint venture
partnership with another where the nature of the venture is in line with the business authorized by
its charter.

Can juridical entities in the process of entering into a contract submit themselves to the laws and legal principles affecting
partnership? In what way, if ever?

Yes juridical entities submits themselves to the laws and legal principles affecting
partnership when they enter into a joint venture agreement because the usual rules as regards
the construction and operation of contracts generally apply to a contract of a joint venture.

While a joint venture is not a formal partnership in the legal or technical sense, both are
governed, subject to certain qualifications, practically by the same rules or principles of partnership.
This is logical since in a joint venture, like in a partnership, there is a community of interest in the
business and a mutual right of control and an agreement to share jointly in profits and losses
resulting from the enterprise.