PARTNERSHIP AT WILL Partnership may be of two types-(1) Partnership for a fixed period: and (2) Partnership at will.

If under the partnership agreement no period or duration of partnership is fixed, it is called partnership at will. Section of the Partnership Act provides: When no provision is made by contact between the parties for the duration of their partnership, or for the determination of their partnership, the partnership is partnership at will. Thus where a partnership is constituted for a specific job and the duration of partnership is also mentioned in deed with a rider that partnership will continue till completion of job and the partnership does not undertake any other venture, partnership will come to end after completion of job and so it is not a partnership at will. Case 53 When there is a partnership of two partners, absence of one automatically given room of determination of partnership under Section 7 of the Partnership Act itself. This is the prime difference between partnership made by two partners or made by more than two partners. Since the partnership of more than two partners cannot automatically evaporate by virtue of absence of any one, such partnership will have to be treated as

partnership at will in absence of any condition on determination. Case 54 According to Section 43: When the partnership is at will, the firm may be dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm. The firm is dissolved as from the date mentioned in the notice as the date of dissolution or, if no date is so mentioned, as from the date of communication of the If the duration of the partnership is fixed, the dissolution of such partnership is subject to certain conditions and can be done only in pursuance of the prescribed procedure. Even if in any partnership there are only two partners and the duration of the partnership is not fixed, Section 7 will apply. In such a partnership agreement, provision relating to retirement of a partner is not inconsistent with Section 7 Case 55 When a clause in partnership deed manifests intention of parties not to determine it even in case of death or retirement of partner, prime facie makes it clear that it is not partnership at will

Case 56 In case of partnership at will, a mere notice by one partner to the other partner under Section 43 dissolves the partnership Case 57 A partnership can be called a partnership at will under Section 7 if following two conditions are present(A) There must be no provision, express or implied relating to the duration of the partnership in the partnership agreement. (B) The partnership agreement must also not contain any provision regarding the termination of the partnership. CASE 58 It may be noted here that in a partnership deed a provision relating to the retirement of a partner cannot be cannot be said to be relating to determination of their partnership. The legal position in this respect has been clarified by Bhagwati, J. (as he then was) in the case of Kehsav Lallubhai Patel v. Patel Bhailal Narandas. In the word of Bhagwati, j: What Section 7 requires is that there should be no provision made by contract between the partners for the duration of their partnership or for the determination of their partnership ......A provision for retirement of a partner which has the effect of disrupting the partnership

only as between the retiring partner and the continuing partners and not as between all the partners inter se cannot therefore be regarded as a provision for determination of their partnership within the meaning of Section 7 In case there is some expressed or implied provision relating to duration of partnership the partnership cannot be said to be a partnership at will. In Moss v. Elphick the plaintiff and the defendant established a partnership by a written agreement on 14th August, 1907 to carry on the business of tobacco. The agreement provided that the partnership could be terminated only by mutual agreement. On 2nd March 1909, the plaintiff gave a two weeks notice to the defendant, expressing his intention to terminate the partnership agreement. The defendant considered that the notice was ineffective because under clause 4 the agreement could only be terminated by mutual agreement or compromise. This argument was regarded as correct by the Court of Appeal. The Court of Appeal held that the agreement contained a provision regarding the duration of the partnership. In his judgment Farewell, L J. observed: It is impossible in this case to say that by the terms of the partnership agreement the partnership was at will because that means that it is determinable at the will of either of the

parties. The effect of the agreement is that the partnership is to endure for the joint lives of partners. The above rule has been followed in Abhott v. Abhott. The facts of this case are as follows: The partnership deed between his father and five sons provided that the death or retirement of a partner shall not terminate the partnership and that if any partner does an act which becomes a ground for the dissolution of the partnership by the court, such a partner shall be deemed to have retired. According to one partner, since the duration of the partnership had not been fixed, it was partnership at will. He gave a notice for the dissolution of the partnership. He filed a suit for the declaration of the dissolution of the partnership. The court held that it was not a partnership at will. In the words Clauson, J: There is some limitation upon this character of the partnership, it is subject to the express agreement that a single partner cannot determine the partnership although he can determine if as between himself and the others. This involves the fact that of one intimates his desire to go out, the partnership shall continue among the remaining partners. As regards the question as to how long the partnership shall continue, his Lordship observed that it cannot be determined

between all the partners at the desire of one partner. I t shall continue as long as its dissolution is made by court or through some other event. In the words of Clauson, J: That clause seems to indicate that this is a partnership that is not determinable at the will of one partner or between all the partners but it is a partnership which is to continue until there is dissolution of it by the court or some other event saves as against a partner who retires. In Karumuthu Thiagrajan Chettiar v. E. M. Muthappu Chettiar, a partnership agreement between the appellant and the respondent contained following provisions relating to the agency of the management of mills, the partners shall get equal share in salaries, commission, profits etc, the management shall be carried on for four years at a time by each of the partners; and in the beginning the management shall be in the hands of the appellant. It was also provided that the partner and his heirs and those getting rights from them shall carry on business on by one and if any partner decides to give up his right to manage, it should be given to the other partner and that it cannot be sold or transferred to any other person. Finally it was provided that both the partners shall keep the management under their hands for four years each and that the income shall be divided equally every year. Their heirs shall also get equal share in the

income and they shall also carry on the business accordingly. On these facts, the Supreme Court held that the intention of the partners was not to create a partnership at will. The Supreme Court observed: The intention of the partners could not be to create a partnership at will. The intention obviously was to have a partnership of some duration though the duration was not expressly fixed in the agreement. The partnership was for the sole business of carrying on the managing agency and therefore by necessary implication it must follow that the partnership would determine when the managing agency determined. The terms of the partnership clearly suggested that the duration of the partnership would be same as the duration of the managing agency.Further, a term in the contract that either partner might withdraw from the partnership by relinquishing his right of management to the other partner did not make the partnership a partnership at will, for the essence of a partnership at will is that it is open to either partner to dissolve the partnership by giving notice. Relinquishment of one partners interest in favour of the other, which was provided in the contract, was a very different matter. The Supreme Court added to its judgment that in this specific case there were only two partners and that as soon as one

partner relinquished its right in favour of the other, the partnership shall be determined. But if there were four partners and one of the partners relinquished its right of management in favor of the other, the partnership would not be determined. Consequently a term that a partner can relinquish its interest in favour of the other does not make the partnership a partnership at will. In Suresh Kumar v. Amrit Kumar, the Court held, this rule will apply with greater force in a situation where the partnership agreement specifically provides for all situations and provides that the death or retirement of a partner shall not dissolve the partnership. The partnership agreement between the parties to this case provided that the partnership shall not be dissolved on the death or retirement of a partner. The partnership business shall be carried on by other partners or legal heir of the deceased or retired partners or persons nominated by them. The Delhi High Court held that the partnership was not partnership at will. In its judgment the Court observed that the right confirmed under Section 43 to dissolve the firm has been taken by the agreement and that no partner can get the partnership dissolved. Therefore, despite a partner relinquishing the business, the partnership business can be carried on by remaining partners and they are entitled to its

good will. In fact, mutuality is the real basis of partnership agreement. As aptly by the Supreme Court in M.O.H. Uduman v. M.O.H. Aslum, the cardinal principle is to be ascertaining the intention of the part6ies to the contract through the word they have used, which are key to open the mind of the matters. It is seldom that any technical or pedantic rule of constructions can be brought to bear on their construction. The guiding rule really is to ascertain the natural and ordinary sensible meaning to the language through which the parties have expressed themselves unless the meaning leads to absurdity. In the instant case, a clause of the partnership agreement, i.e. Cl. (5) in the instant case, manifest the intention of the parties that so long as there exist two partners, partnership cannot be determined, although he/she may withdraw from partnership and terminative the legal relationship between himself and other partners. If one of the partners desires to withdraw or retires from partnership, the partnership shall continue between remaining partners, unless all the partners mutually agree to determine the relationship. It also further indicates that on retirement or death of one of the partners the partnership does not automatically come to an end. Therefore, so long as there are two partners, the partnership

would continue unless either by mutual agreement or according to the law, it is put an end to the partnership. This construction of the relevant clauses put up appears to be the intention of the parties and any other construction would sum counter to the express intention of the partners, manifested in the contract. Since the duration of the partnership has been expressly provided in the deed, namely, that the partnership will continue till there are two partners and that, therefore, it is not a partnership at will. Therefore, the respondent has no right to dissolve the partnership except to seek accounting for the period in dispute or his right to withdraw or retire from partnership and to take here value of his share in the partnership either by mutual agreement or at law in terms of the partnership deed.

CONCLUSION
BY JUDICIAL INTERPRETAION OF THE ABOVE DISCUSSED CASES

Partnership at will means 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. In other words, it is a partnership that can be dissolved by any partner at any time without any liability. A partnership at will may be dissolved at any time by a partner serving notice on the other partner(s). A partnership will be a partnership at will unless contrary intention can be proved, for this, there must be an express or implied agreement that is inconsistent with the right which a partner would otherwise have to determine the partnership by notice.