Short answer. The partnership bears the risk, not the contributing partner. Under Article 1795 of the Civil Code, when goods are fungible, cannot be kept without deteriorating, or were contributed to be sold, their loss is borne by the partnership, because such goods are treated as effectively transferred to the firm.
What the law says
If the things contribute are fungible, or cannot be kept without deteriorating, or if they were contributed to be sold, the risk shall be borne by the partnership.
Civil Code, Article 1795 — Risk of Contributed Things. Read the full provision →
The partnership carries the loss
For fungible goods a partner hands over to be sold, the loss falls on the partnership, not on the partner who contributed them. Article 1795 of the Civil Code is explicit: If the things contribute are fungible, or cannot be kept without deteriorating, or if they were contributed to be sold, the risk shall be borne by the partnership. So if a partner contributes stock or merchandise for the firm to sell and it is destroyed before it can be sold, that loss is the partnership's. The contributing partner does not have to absorb it himself, and his capital credit for the contribution stands.
Why the risk moves to the firm
The reason is that these goods are, in substance, given to the partnership rather than merely lent for use. When you contribute goods to be sold, or fungible things like money or commodities, you are not keeping a specific item to get back later; you are transferring value into the common enterprise. Ownership, in effect, passes to the firm, and with ownership goes the risk of loss. This is the mirror image of the rule for a specific, non-fungible thing contributed only for its use, where the owner keeps the thing and therefore keeps the risk. Here, having parted with the goods, the partner has parted with the danger too.
The three triggers
The clause covers three overlapping situations, each pointing the same way. First, goods that are fungible, interchangeable things measured by number, weight, or measure, such as cash or grain, which cannot sensibly be returned in the identical units. Second, goods that cannot be kept without deteriorating, like perishable produce, which are expected to be used up. Third, goods contributed to be sold, handed over precisely so the firm can dispose of them. In all three, the partner's contribution is meant to be consumed, converted, or sold rather than preserved and returned, so it makes sense that the partnership shoulders any loss.
A related rule and the room to agree
Article 1795 adds a fourth partnership-risk situation worth noting. In the absence of stipulation, the risk of the things brought and appraised in the inventory, shall also be borne by the partnership, and in such case the claim shall be limited to the value at which they were appraised. So property listed and valued in the inventory is likewise at the firm's risk, though the contributor's recovery is capped at the appraised figure. Finally, all of this can be altered by agreement. Partners are free to allocate the risk differently in their contract, so a clear stipulation can change who bears the loss.