Think, Pair, Share: Can my partner do this?

Situation A - Agribusiness

You both agreed to contribute P2,000,000 each to put up a corn and vegetable farm but
while you have delivered your commitment, your friend kept deferring his promised
contribution until it became necessary for you to purchase seedlings on credit since you
have ran out of cash. Because your partner continued to ignore your reminders for him to
turn over his contribution, you failed to pay the supplier on time and it charged you interest
and penalties. You also failed to take advantage of a seasonal promotion from a fertilizer
company that offered a huge mark down because you had no cash on hand.

Situation B - Bookstore

You both agreed that a bookstore in front of De La Salle University is a promising business
so you contributed P1,000,000 each to set one up. Unfortunately, your business did not
turn out as you had hoped for as today’s students are more interested in social media than
in reading books. To create an attraction in your bookstore, your partner prepared a
special section on adult books and magazines right by the entrance. You are a devout
Catholic and found this disturbing but you kept quiet at first. The following week, he invited
Mocha Uson to prepare an autobiography and offered free publication and exclusive
distribution by the bookstore. This angered you very much but before you were able to
confront your partner you just realized that he cleared one corner of the bookstore and set
up a liquor bar.

Situation C - Catering Business

From the outset, you agreed that all partnership transactions must have the consent of
both partners. One day, your catering services were sought for a special dinner by a
wealthy family living in Forbes Park. For this occasion, your partner wanted to purchase a
set of spoons and forks decorated with the partnership emblem in 18 karat gold. You
refused to give your consent to such unnecessary expense because you already have
good quality silver cutlery. Your partner insisted and secretly purchased the spoons and
forks to impress the wealthy client thinking that she can be excused from not securing your
consent because you were, at this time, on vacation leave.

Situation D - Dress Shop

You both agreed to contribute P500,000 each to set up a dress shop catering to brides and
debutantes. After six months of operation, you felt that something is terribly wrong with
your business as you were barely getting clients other than those who occasionally
request minor repairs and alterations. Since your capital has been depleted and your
unpaid utility bills are mounting, you discussed with your partner the necessity of
contributing an additional P250,000 each but your partner refused. She said, “businesses
do not really prosper immediately, let’s just keep waiting and for sure, a big break will come
our way soon”. After another 3 months without a substantial client, you reiterate the need
for additional capital to hire a popular celebrity endorser but your partner still refused.

Situation E - Engineering Firm

Fresh from passing the board examinations for electrical engineers, you both agreed to put
up an engineering firm and to contribute P1,000,000 each for start-up expenses. One day,
your partner’s uncle sought your technical advice as he needed an expert to reconstruct
the electrical circuits that power the various rides at his carnival. After drafting the
necessary plans, you billed him P200,000. Your partner’s uncle promised to return the
following day with the payment but failed to do so. After a month, your partner met his
uncle at a family gathering. Your partner reminded his uncle of the P200,000 that the latter
owes the engineering firm as well as an unpaid personal loan of P100,000 that he owed
his nephew several years back. The uncle apologised profusely and gave P60,000 to your
partner who kept everything for himself.

Situation F - Fish and Prawn Farming

You both agreed to contribute P1,000,000 each to engage in sustainable fish and prawn
farming. Since your business is located in Talisay, your partner’s hometown, you also
agreed that he will be the managing partner. After several months of operation, you started
to suspect that your partner is not completely honest in so far as partnership income is
concerned. As managing partner, he controls the partnership’s bank account, keeps all
records of receivables and payables, and decides all business-related purchases. He
keeps saying that your business was barely breaking even but he suddenly purchased a
new SUV. You also learned that he and his wife went on a two-week European tour. As
soon as he returned, you immediately demanded that he prepare a formal account but he
said you should wait until December 31st because that’s when the partnership books are
supposed to be closed.

Situation G - Gasoline Station

You and your partner agreed to contribute P25,000,000 each to acquire a SeaOil franchise
and operate a gasoline station. As business was quite slow in the beginning, your partner
thought of negotiating a tie up with an association of taxi operators and drivers, giving
them discount and free parking privileges in exchange for exclusive supply of gas and
diesel for their entire fleets. As this appeared to be a brilliant idea, you entrusted the details
of the tie up to your partner and focused your attention on other business concerns. After
some time, you received a demand letter from a lawyer who represented an independent
taxi owner claiming damages. According to the letter, the taxi owner regularly purchased
fuel and other supplies from your gasoline station in exchange for which he was granted
free parking privileges for five hours from 12 midnight to 5AM. One morning, however, the
taxi owner found a huge damage on the rear of his car, most likely from a vehicular
collision. It turned out that your partner had an urge to buy beer that night, saw the parked
taxi and drove off with it (key was left with him because the taxi was scheduled for change
oil and tune up) then figured in an accident. He is now in hiding, as you learned from a
note that he left for you saying, “please pay the damage that I caused”.

Situation H - House Rentals

You and your partner acquired a vacant lot to construct a 5-door apartment for rent. You
contributed P20,000,000 for this purpose while your partner, being a civil engineer, contributed his
expertise in construction and management. You both agreed that profits shall be divided 80% for
you and 20% for your partner. After one year of operation, your partner informed you that the
business did not earn any profit. You were both surprised and disgusted because your partner
earlier told you that all 5 apartment units were already occupied by tenants. You undertook some
serious investigation and found out that your partner actually occupied one unit with his family
without paying rent. You confronted your partner about this but he reasoned that it is his right to
occupy one unit.

Situation I - Internet Cafe

You contributed 25 desktop computers while your partner contributed his management
skills, as well as his expertise as a computer engineer, to put up an internet cafe that
operates on weekdays from 10am to 6pm. Business was slow on the first few months and
you realized that this is because serious computer users are either at school or at their
workplaces during this time while gamers prefer evenings and weekends. You tried to
discuss with your partner the possibility of extending your operating hours in the evening
and opening your cafe on weekends but your partner refused saying that you should
spend those times with your respective families. You were convinced that this was the right
attitude so the following Saturday, you took your wife to Greenbelt for lunch after which
you proceeded to Salcedo Market to look for artwork. You then came across a familiar face
- your partner is also in the same market selling antique furniture and rare stamp
collections.

Situation J - Jewelry Store

You and your partner agreed to put up a jewelry store specializing in various kinds of
pearls and diamonds. Your partner contributed P10,000,000 while you contributed your
expertise as a certified gemologist, having earned a degree from the Gemological Institute
of America. As business was quite slow due to stiff competition, you decided to invest in
corporate and government bonds to ensure that you have a fallback position should your
venture fail to take off. Unknown to you, your partner was also thinking of a back-up plan
for herself. She invested heavily in the stock market, more particularly in mining
companies.