Legal Definitions - contributio lucri et damni

Contributio lucri et damni is a Latin term used in Scots law to refer to the distribution or sharing of profit and loss. It is a test used to determine whether a partnership exists.

For example, if two people start a business together and agree to share the profits and losses equally, they are engaging in contributio lucri et damni. If one partner makes a profit, they both share in the profit. If the business incurs a loss, they both share in the loss.

Another example would be if a group of friends decide to invest in a property together and agree to share any profits or losses equally. This would also be considered contributio lucri et damni.

The examples illustrate the concept of contributio lucri et damni by showing how two or more parties can agree to share in the profits and losses of a business or investment. This sharing of risk and reward is a key characteristic of a partnership, and the use of this test helps to determine whether a partnership exists under Scots law.