Legal Updates

In the absence of a non-competition agreement a partner may compete with the partnership once it is dissolved

April 4, 2019

Four partners set up a website in the field of home planning and design, and one of whom brought the professional content, which derived from a printed newspaper that she had managed before the partnership was established. The partnership was dissolved due to the breach of the partnership agreement by the same partner and with the dissolution of the partnership, the partner established her own website, to which she uploaded the contents of the printed newspaper.
The court rejected the claim regarding the tort of "passing off" due to the similarity between the magazine's website, which was established by the partnership and the site that was established by the partner following the dissolution of the partnership. When a partnership is established and a partner brings her asset to the partnership, upon dissolution of the partnership the asset is returned to that partner. Insofar as there is no non-competition agreement, that party may continue to manage the business she conducted prior to the partnership through the asset returned to her and thus compete with the dissolved partnership business, even if the partnership was dissolved due to breach of the agreement by that partner.