Many written partnership agreements set forth a “term” of the partnership and a specific date in the future that the partnership agreement will “expire.” Often the partners of a business forget that they included the expiration date in their partnership agreement and only realize that their partnership agreement has expired when they review the agreement after a dispute has arisen.
In New Jersey, the Uniform Partnership Act states that:
- If a partnership for a definite term or particular undertaking is continued, without an express agreement, after the expiration of the term or completion of the undertaking, the rights and duties of the partners remain the same as they were at the expiration or completion, so far as is consistent with a partnership at will.
- If the partners, or those of them who habitually acted in the business during the term or undertaking, continue the business without any settlement or liquidation of the partnership, they are presumed to have agreed that the partnership will continue.
In determining whether a partnership remains in existence after the expiration of a partnership agreement, the Courts will look at the partners’ conduct after the purported expiration date. If the partners continued to conduct the business of the partnership in the same manner both before and after the expiration date, then the partnership will be deemed to have continued in existence past the expiration date.
Spector & Ehrenworth, P.C. has extensive experience analyzing and advising on issues relating to partnership rights and obligations. If you are involved in a partnership dispute, attorneys at the firm would be happy to discuss with you the specifics of your case and advise you with respect to your legal options. To schedule an appointment to speak with a business attorney, call (973) 845-6525 or e-mail firstname.lastname@example.org.