Even if you do not create a partnership contract, if you work with someone else, you are legally bound by the provisions of the Partnership Act 1890. Among the important provisions to understand are the following: the first time for a formal contract that most people experience is with roommates when you share a place, whether at university or later in life. No matter how cool people are, you should have a contract that determines who pays what and what the responsibilities are. This gives you some leverage when someone skips bills or harms the place. The twelfth edition of Business Law: Text Cases (Clarkson, Miller & Cross) says that formal contracts are “contracts that require a particular form or method of creation to be enforceable.” Personally, I think that if you lend a sum of money to a friend or family member, you should have a formal repayment contract. .
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