PARTNERSHIP AT WILL

Submitted By:
SALONI KUMAR
Division : A PRN : 18010224200 Batch : 2018-23

SYMBIOSIS LAW SCHOOL , NOIDA

Symbiosis International (Deemed University) , Pune

In
August , 2019
Under the Guidance of

Miss Dhamita Prasad

( Assistant Proffessor )
 CERTIFICATE
The project entitled “ Partnership at Will ” submitted to the Symbiosis Law School,
NOIDA for Special Contract as part of Internal assessment is based on
my original work carried out under the guidance of-------------------------
------------------from-----------to -----------------. The research
work has not been submitted elsewhere for award of any degree.
The material borrowed from other sources and incorporated in the
research report has been duly acknowledged.
I understand that I myself could be held responsible and accountable for
plagiarism, if any, detected later on.

Signature of the candidate

 INTRODUCTION
“Partnership at Will” is a partnership where no provision is made by contract between the
partners for the duration of their partnership , or for the determination of their partnership , the
partnership is known as “Partnership at Will”. It is part of section 7 of the Indian Partnership
Act, 1932 .

 Reason for this section

In Moss v.Elphick1 it was held that as the duration of the partnership was provided for
in the partnership agreement , it was a partnership for a fixed term . To obviate this
difficulty felt in England section 7 has inserted the definition of “Partnership at Will” .

 Conditions of Partnership at will

The following two conditions are to be fulfilled in order that a Partnership is at will :
a) That there is no contract between partners for the duration of their partnership, and
b) That there is no provision in the contract for the determination of the partnership .
If any one of the above provisions is present in the contract of partnership, the partnership is
not one at will . In the absence of express stipulation, there may be an implied contract as to
the duration of partnership. In such case the partnership is not deemed to be one at will2 . Where
there is no express agreement to continue a partnership of definite period , There may be an
implied agreement to do so . The same principle is also applied to a case of determination .

LITRATURE REVIEW
The research paper aims at scratching out the difference between Partnership Agreement and
Partnership at Will .
Kelly Schofield (2015) A Partnership at Will is a form of business partnership where there is no
fixed term agreed for the duration of the partnership. In other words, it is completely open ended.
This differs from a usual business partnership by way of agreement as this type comes to an end at
any time when a partner serves a notice to dissolve the partnership on the other partner or partners
providing the partnership agreement provides for this.

A partnership will be deemed to be a Partnership at Will unless contrary evidence can be

shown. To show contrary intention there must be an express (in writing) or an implied (by
conduct) agreement which shows that the partnership is not a Partnership at Will. It can be
difficult to reflect by conduct alone that the business is not a Partnership at Will and therefore
it is advisable that any business partnership agreement is contained in a written document
which can be referred to.

1
(1910) 1 KB 846 : 79 LJKB 631 : 162 LT 639
2
Halsbury’s Law of England , 4th edition , Vol 35 , Para 42
A Partnership at Will is governed and subject to the terms of the Partnership Act 1890 (“the
Act”). This Act, given the date, is often considered to be ‘out of date’ for modern businesses
and does not take into consideration the intricacies of today’s business world. For example,
under the Act when a partner dies, the partnership automatically comes to an end and similarly
there is no provision for a partner to retire without bringing the partnership to an end. In this
day and age your business can be as flexible as you want it to be, providing that you have
drafted an agreement which contain the terms for reference.
In addition, the Act dictates that the business’ profits and losses in both income and capital are
divided equally between the partners. Therefore as a result of the Act, all partners are liable for
any debts incurred by the business in addition to an equal sharing of the profits which in some
partnerships might not be intended. For example, partnerships can now be more diverse where
each partner may have different responsibilities and workloads which may be reflected in the
remuneration that they receive. The Act unfortunately does not allow such flexibility.
By having a formal agreement in place such as a partnership deed or agreement you are
preventing any unexpected adverse consequences of your partnership being solely governed
by the Act which can be considered to be rigid. It allows you, together with the other partners,
to decide how the partnership will come to an end, how profits and liabilities are dealt with and
how retirement is dealt with amongst other key matters. A partnership agreement can therefore
act as a type of insurance policy which guides the partners through every eventuality in
business.

CRITICAL ANYLASIS
A partnership at will is a partnership where there is no fixed term agreed for the duration of
the business. Unless there is any indication to prove otherwise, a partnership of this sort can
begin and dissolve relatively informally.
Without any formal agreement the partnership is subject to the terms of the Partnership Act
1890 by default in the eyes of the law.
The 1890 Act is often unsuited to modern businesses as they are automatically dissolved
when a partner dies, and it is impossible for a partner to retire without the same outcome.
Unless there is agreement to the contrary, a partnership at will also calls for equal division of
all of the business’ profits and losses in income and capital. This means that all partners are
liable for any debts incurred by the business which could result in repaying creditors out of
personal assets.
It can take very little for a partnership at will to be dissolved, for example any partner has a
right to serve a notice to dissolve the partnership at any time.
Having a formal arrangement such as a partnership deed or agreement protects against
unwanted legal difficulties when a partner leaves the business.
A partnership agreement can outline a provisional protection in the instance that the worst
should happen and a partner is bankrupted or dies, leaving problems behind for the remaining
partner/s. If this happens without precautions in place, the other partners are liable for all
costs owed.
An agreement is particularly crucial in a medical partnership. The lack of an agreement or
deed in this scenario could result in the redundancy of staff and loss of existing NHS contract
for services.
In a medical partnership a new agreement must be in place and signed by all involved before
the first day of any incoming partner. Failure to do so will result in a partnership at will
which does not provide the maximum level of protection.
Ralli Solicitors are highly experienced in creating bespoke agreements and deeds to suit all
manner of businesses and organisations. Partnership law solicitors can provide expert advice
to give your partnership the best security for everyone concerned.