Also known as: at will partnership · at-will partnerships · partnership at will
Written by attorneys — see sources below.
A partnership in which the partners have not agreed to remain partners until the expiration of a definite term or the completion of a particular undertaking.
Aisha Ahmed and Austin Abbott formed an at-will partnership to operate a delivery service with no written agreement fixing duration. Aisha sent Austin a certified letter stating her express will to withdraw immediately. Upon Austin's receipt of the letter the partnership dissolved by operation of law and the business shifted to winding up its affairs.
Amelia Amari and Adam Anderson began a linen-supply business with no agreement specifying duration. After years of operation Amelia sought to end the venture. Adam claimed the partnership was for a term because profits were to repay equipment loans. The court examined the evidence and determined the arrangement was at will because no definite term or particular undertaking had been agreed upon.
George B. Page and H.B. Page formed an oral partnership in 1949 to operate a linen supply business in Santa Maria, California. Each partner contributed approximately $43,000 within the first two years to purchase land, machinery, and linen for the business. From 1949 to 1957 the partnership lost approximately $62,000. The partnership's primary creditor is a corporation owned entirely by plaintiff that holds a $47,000 demand note issued by the partnership. The business earned profits of $3,824.41 in 1958 and $2,282.30 in the first three months of 1959. Plaintiff then sought to end the partnership. Defendant testified that the partnership terms were intended to be similar to prior partnerships between the parties, under which the business would pay for itself. On cross-examination, however, defendant stated that there had been no discussion about continuing the business in the event of losses. The trial court determined that the partnership was for a term consisting of the reasonable time needed to repay the partnership's debts from profits. Plaintiff appealed from this judgment to the Supreme Court of California.
View caseA partner dissociates by giving the partnership notice of an express will to withdraw. Dissociation occurs on the date of notice unless the partner specifies a later date, in which case dissociation takes effect on that later date.
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The partnership dissolves and its business must be wound up once the partnership receives notice of the partner's express will to withdraw. The remaining partners cannot unilaterally continue the original partnership against the withdrawing partner's will.
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An at-will partnership has no agreed definite term or particular undertaking, so any partner may withdraw by express will and compel dissolution. A term partnership exists for a fixed period or project, and early withdrawal by express will is usually wrongful and exposes the partner to damages.
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Death dissociates the deceased partner. In an at-will partnership the remaining partners may then vote to wind up the business, which triggers dissolution and winding up rather than automatic continuation.
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…for the continuance of said partnership, nor upon any particular undertaking to be accomplished; that the said partnership was a partnership at will.” From this finding the court concluded that plaintiff was entitled to a dissolution under section 2425, subdivision (1) (b), of the Civil Code. The court further found that the parties…