Explanation of Article 544
The first paragraph established a general rule that partners are obligated to provide the company with what they promised in the partnership contract, whether it is a cash amount, tangible property, or labor. Whether the property is real estate or movable, because the partnership is a contract independent of the sale contract and the like, the partner is obligated to deliver the share to the company and register it. If there is a delay, the company may revert to demanding the partner to provide their share along with compensation for any damage resulting from this delay according to general rules. The following results from this:
First: A partner who is obligated to provide a cash amount is considered indebted to the company and must compensate it for any lost profit if they delay delivering it by the agreed date, from the date it is due without the need for a warning or notice.
Second: A partner who is obligated to provide their share in kind from movable or real property, and owns it, the ownership of the share transfers to the company by delivery if it is movable, and by registration if it is real estate. The partner is liable for it in case of destruction, entitlement, or defect according to the provisions of the sale contract referred to in Article (402).
Third: A partner who is obligated to provide a share in kind from property they do not own, the ownership of the benefit of the share transfers to the company by delivery if it is movable, and by registration if it is real estate. The partner is liable for it in case of destruction, entitlement, or defect according to the provisions of the lease contract referred to in Article (402).
The second paragraph established that a partner who is obligated to provide their share as labor is liable for any damages to the company resulting from a breach of that labor. The liability of the partner providing labor is determined by the type of work provided, and it is a personal liability that varies according to the importance of the work provided; the expert's liability differs from that of an ordinary worker.
If the partner fails to provide the labor they committed to, they are liable to the company for the damage it suffered as a result.
If the partner provides their labor, they may not practice the work they provided as their share in the company for their own account, because the principle is that what the partner provided is for the company alone.
Related To
Article 544
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The company contract shall terminate when the purpose for which it was established ceases to exist or upon the expiration of its term. The term may be extended upon the agreement of the partners prior to its expiration.
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If the term of the company expires or the purpose for which it was established ceases to exist, and the partners continue to engage in any of the activities for which the company was established, the contract shall be deemed renewed under its original terms, except for the terms related to specifying the company term; in such case, the company shall be subject to the provisions governing a company with an unspecified term.
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The creditor of any partner may object to the renewal of the company contract. In such case, renewal of the contract shall not take effect against said creditor.