PARTNERSHIP AGREEMENT AND TYPE OF PS

THE PARTNERSHIP AGREEMENT.

The PS Agreement is not so different from any other contractual agreement - may be oral or in writing.

Subject to various contractual rules such as illegality, misrepresentation and mistakes.

Usually the agreement sets out the condition and terms of the partnership.

Within some limits like restraint of trade - the partners are free to include whatever terms they wish - Sec 21 PA : “ …… may be varied by the consent of all the partners and such consent may be  either express or inferred from a course of dealing.”

However the contract binds the parties of the contract only – doctrine privity of contract – it cannot affect the third party. S.10 PA:

Two common terms - as to commencement and duration.Statements as to the date of commencement of the partnership is however subject to contrary proof if it can be shown that the date is incorrect.

Duration - most agreement provide for some method of ending the partnership.

TYPE OF PARTNERSHIP

The PA provides for two types of partnership:

1. Partnership entered for a fixed term.

Ends only in accordance of the agreement or express provision of the PA like death and bankruptcy. If entered into for a single venture - by the completion / termination of that venture.

If this partnership continues after the affixed time - automatically becomes a partnership at will - Sec 29

2. Partnership at will

The right to dissolve by giving notice to the other partners - Sec 28(1) and Sec 34.

Dissolution commence from the date mentioned in the notice or from date of communication of the notice.