Legal Updates

In a partnership unlimited by time each partner may dismantle the partnership by a notice

May 26, 2019
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Parties signed an agreement to examine the feasibility of a business activity between them and later also a partnership agreement that specified a minimum period of time. Over time, the partners entered into a dispute and one of them notified of the termination of the partnership.
The Court held that the partnership was duly terminated. A partnership agreement for an unlimited period may be terminated by either party by giving notice to the other parties. This is unlike a partnership agreement for a fixed period which may be terminated only by moving the Court to order the dissolution of the partnership in case of breach of the partnership agreement in a manner that the partnership cannot be continued, or if other circumstances arise that justify the dissolution of the partnership. Here the parties reached a status of lack of cooperation and loss of trust and thus, regardless of whether the agreement was for a fixed period or not, each party was entitled to terminate partnership.