1. Partnership
at will
Where
no provision is made by contract between the partner for the duration of their
partnership, or for the determination of their partnership, the partnership is
“partnership at will”. Section 7
2. Scope
of these provisions
Section
7 contemplates two exceptions to a partnership-at-will. The firm exception is
where there is a provision in the contract for the duration of partnership; the
second exception is where there is a provision for the determination of the
partnership. In either of these cases the partnership is not at will. The
duration of a partnership may be expressly provided for in the contract but
even where there is no express provision; the partnership will not be at will
if the duration can be implied. The same principle applies to a case of determination
of partnership. The contract may expressly contain a term that the partnership
will determine in certain circumstance, but even if there is no such express
term, an implied term as to when the partnership will determine may be found in
the contract.
3. The
following some points, however demand notice;
a. Relinquishment of interest by one partner in favor of another
A
term in the contract that either partner might withdraw from the partnership by
relinquishing his right of management to the other partner did not make the
partnership a partnership-at-will, for the essence of a partnership-at-will is
that it is open to either partner to dissolve the partnership by giving notice.
Relinquishment of one partner’s in favor of the other, which was provided in
his contract, was a very different matter.
b. Effect of existence of debts
The
mere fact that a firm has incurred debts, and charged its assets for their
payment, is no proof of an agreement that the firm shall continue until its
debts are paid, for those debts may be paid as well after as before
dissolution.
c. Effect of taking lease for a particular period
The
fact that the partners have, for partnership purposes, taken land on lease for
a term of year, is not proof of an agreement that the partnership between them
shall subsist for the same period.
d. Effect of duration of sub-partnership
So,
if one of several partners forms a sub-partnership with a stranger, the fact
that the principal partnership has been entered into for a certain number of
year is no proof that the sub-partnership was intended to last for the same
number of years, or for as many of them as were unexpired when the
sub-partnership was formed.
f. Effect of partnership for single adventure
As
provided by section 42 (b) , a partnership constituted to carry out a
particular adventure of undertaking is, in the absence of a contract to the
contrary, dissolved by the completion thereof.
g. Effect of provision for retirement
A
provision for retirement in a partnership consisting of even two partners would
not be inconsistent with a partnership at will.
4. Particular partnership
A
person may become a partner with another person in particular adventures or
undertakings. Section 8
Single adventure
Under
section 8 a partnership can be for one transaction or one adventure only. The
word adventure or undertaking in the section does not connote matter of very
short duration. The transaction though single may stretch over a short period.
The distinction between single venture and a business is that a single venture
finishes immediately after the purchase and sale. There is no continuity or
carrying on of the business in the senses that one or more partners continue to
have the responsibility and so apply their discretion is buying, storing, and
selling, selling and keeping charge of moneys over a length of period.
5. Dissolution of partnership for particular venture
Where
a partnership is formed for a particular, venture, it continues so long as that
venture continues and is dissolved when that venture comes to an end. No
formality is necessary to affect the dissolution.
6. Shares
is particular partnership are also Prima facie equal
The
rule that the shares of partners are equal, unless they have otherwise agreed,
applies not only to persons who are partners in business generally, but also to
those who are partners as regards one single matter only. Thus where tow
solicitors, not in partnership, were jointly retained to defend certain
actions, and there was no satisfactory remuneration, it was held that they were
entitled to share it equally, although they had been paid separately and had
done unequal amount of work.
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