DAVOCOL, NICOLE

Agency, Trusts and Partnerships

JD2-A
Betrayal and Partnership: Legal Reflections on The Social Network

The movie The Social Network, directed by David Fincher, is a story of a very
introspective look at firepower, trust, betrayal, and the strong ties bound when they build an
empire. Thus, the early days of Facebook that are featured in this film could help us understand
the laws on partnership, particularly those written in the civil code of the Philippines. Here, a
well-detailed reflection of the conduct of the characters, notably Mark Zuckerberg and Eduardo
Saverin, will demonstrate the law of partnership and how this applies to business practice.
In other words, it was a partnership — in this case, between Mark Zuckerberg(Jesse
Eisenberg) and Eduardo Saverin(Andrew Garfield) — based on the civil code of the
Philippines, article 1767 defines that by the contract of partnership, two or more persons bind
themselves to contribute money, property, or industry to a common fund, with the intention of
dividing the profits among themselves, which sets them to be Partners. Eduardo's risk for the
co-investing: Not only was he investing in Facebook, but few people really bought Mark's
promise of providing technical know-how on Facebook. They had just harmonized in the early
stages of many startups, where their partners pooled together their skills, their capital, and their
business vision toward a common goal.
Moving forward, Eduardo gives Mark one thousand dollars, which is later very
important because it helps develop Mark's idea into a business. This monetary importance of
the cash also suggests its importance in relation to partnership formation, as envisaged in
Article 1767, which indicates that partners must make contributions to the partnership. On the
other hand, Eduardo's decision to invest in Mark and not bother to control him is a clear
indication of how partners are devoted to each other, which, as the movie shows, can be very
much misplaced.
Within the development of the story, the partnership of Mark and Eduardo gradually
comes apart in a way that shows the unpleasant side of doing business together. Articles 1770,
1788, and 1800 of the Civil Code further provide background in the scene, as it articulates the
fact of the obligations of partners, including the duty to contribute their share of the partnership
capital, to act with diligence in the management of the partnership affairs, and to render an
account of their administration. These obligations implicitly reflect the fiduciary duty to act in
good faith and for the benefit of the partnership. In one of the most gripping moments of the
film, Eduardo realizes that his Facebook shares have been completely diluted, which efficiently
means that he is out of the company. This is a blatant breach of fiduciary duty and utter
disregard of trust, which was the basis of the partnership.
Their documentary also mentions an ongoing rivalry for control between Eduardo and
Sean Parker (Justin Timberlake). It is a bit like the tension of operational versus expansionism.
So, it is no surprise that the tension is well and truly tied up when we compare the differences
in how Sean and Eduardo view things, which brings in Einstein's problem — How can two
people see the same reality in such different ways? This shows how valuable preemptive
harmony via a contract is, so when those agreements are violated, the conflicts do not become
quite as damaging.
Eduardo's removal gives rise to an implied exclusion of Eduardo from Facebook
considering the law of partnerships in the Philippines, Article 1800 particularly. Undoubtedly,
it was recognized that Mark and Shawn did not actively exclude Eduardo from Facebook.
However, it was these very opinions that Eduardo was actively disabused of that put him off
Mark. This paints a picture of how the law of partnership should not be feared but instead
empowered; perspectives of power and manipulation should govern no partnership.
Another key analytical point is the formalization of Facebook's ownership structure.
Eduardo is asked to sign papers that he discovers significantly dilute his shares. It does feel
like a perennially overdue reality check on informed consent through legal agreements, which
are at the core of partnership law. Based on Philippine law, Article 1318 prescribes that the
consent of the parties to a contract must be given to make it valid. Eduardo's misunderstanding
of the documents he signed creates some problems with misrepresentation and bad faith, which,
given his data, has the potential for invalidating agreements under specific laws so long that
his mistake is material.
The film also reveals an imbalance in the bargaining power between partners. Eduardo
was vulnerable, with Mark's increasing power — and Sean Parker's investment — conspiring
against him. It is a common enough ailment of partnerships, one that is more acute, however,
when one-half of the team becomes integral to the business's machinations. Although law
attempts to protect partners from potential exploitation by one party in these types of scenarios,
it represents an ideal of mutuality and fair exchange that, as the film demonstrates, is not
always evident in practice.
The Social Network is a cautionary tale for entrepreneurs and lawyers. This built
transparency, communication, and the rule of law around successful partnerships. Mark and
Eduardo's relationship eventually disintegrated, underscoring the need for partners to set clear
terms and review and renegotiate their agreements over time as circumstances change. It would
be one of the films that resonates closely with the principles of partnership of Philippine
entrepreneurs, reminding us that Business is not simply about profits but also relationships.
Their relationship fracture is a telling metamorphosis that tells how if fiduciary responsibility
and ethical duty between partners runs dry, so does trust: When shark meets shark, when sweat
meets greed. It also underscores the importance of legal protections to guard partners against
exploitation when there are significant imbalances of power.
The point of it is not so much that it is a story about how Facebook began; it is a film
about the human and legal complexities of building a business. A close examination of the
film using partnership law allows for a deeper understanding of how legal structures strive to
find an equilibrium between aspiration and justice in the pursuit of successful and lasting
partnerships.