Also known as: appropriating a partnership opportunity · appropriated a partnership opportunity · appropriation of partnership opportunities · partnership opportunity doctrine · usurpation of partnership opportunity
Written by attorneys · grounded in primary & secondary sources — see below
Conduct by which a partner secures for personal benefit a business opportunity that arises in the conduct of the partnership's activities or that the partnership could pursue.
Lena serves as the sole general partner of Oakview LP, which acquires and manages apartment buildings. Using Oakview staff and market data, Lena evaluates a building across the street but decides not to present it to the partnership. She buys the property personally instead. Oakview may require Lena to account for any profits from the acquisition because she appropriated an opportunity that arose through partnership resources.
Drew manages client relationships for the Pacific Stack partnership. During a meeting with Apex Dynamics, the client requests an add-on inventory module. Drew signs a separate contract through his own LLC, assigns partnership engineers to the work on company time, and uses the firm's demo code. Pacific Stack may require Drew to account for the profits because the opportunity originated in partnership business and relied on partnership assets.
Select any source to read its text and confirm it supports the definition.
The partner must account to the partnership and hold any resulting property, profit, or benefit as trustee for the partnership.
Supporting sources
Yes. The duty requires the partner to offer the opportunity to the partnership first. Rejection after full disclosure is required before the partner may pursue it personally.
Supporting sources
No. Courts look to substance rather than form. Using a controlled entity does not excuse the duty to account for benefits derived from partnership resources or opportunities.
Supporting sources