 Hello in this lecture we will define partnership contract according to fundamental accounting principles wild 22nd edition the definition of partnership contract is agreement among partners that sets terms under which the affairs of the partnership are conducted also called articles of partnership when we have a partnership in which two or more individuals get together and start doing business in a general partnership it's important to lay out what the terms of that partnership are that can be done with a partnership contract so we had two or more individuals here that start a restaurant together in the form of a general partnership they would want to have a partnership contract or articles of a partnership that would lay out at a minimum the profit sharing agreement when the partnership is going to start and other things depending on the type of partnership that is being set up a partnership is typically limited in terms of the life of the partnership meaning it's going to end at some time either at a set time when the partnership is set up or it could end at the death or the leaving of particular partners and that timeframe may want to be set up as well if it's a limited lifetime the terms of the live should be set up any terms that are expected at the death or the leaving of a particular partner might want to be thought about at the point in time that the partnership is started if these things are not set up then it is typically assumed that the profit will be shared in that case at a 50-50 sharing and some partners often set up a partnership and don't put in a clear set of goals in terms of the articles in the partnership highly recommend setting up as clear goals as possible so that everybody within the partnership knows what is expected from each individual partner within the partnership and I recommend this no matter who's involved within the partnership whether it be family members or good friends within the partnership it's still really important to put it in writing list out as detailed as possible what is expected and and put that down so that everybody is clear on what is expected within the partnership including of course how much time is going to be spent in the partnership and what that profit sharing agreement will be.