No Partnership — Cross-Posting from New York Business Divorce

                     No Partnership — Cross-Posting from New York Business Divorce

Peter Mahler and his team at Farrell Fritz in New York publish New York Business Divorce, a blog I have followed for many years.  Whether written by Peter or one of his partners, the case descriptions are always clear and the decisions placed into the broader body of New York law.

Recently a post authored by Becky (Hyun Jeong) Baek addressed a dispute spanning eleven years that came down to the question “Was there a partnership?”  After 11 years the New York intermediate appellate court found that there was no partnership, and there necessarily flowed there was no breach of the partnership agreement. HERE IS A LINK to that posting.

Eleven years.  I have no idea how much has been expended by either side in this litigation, but even from the position of the prevailing party there has been proven the adage “the second worst thing that can happen to you is that you win a lawsuit.”  Be careful when negotiating agreements to be clear there is no agreement until there is a final agreement, make it clear that all parties reject the possibility of forming an inadvertent (unintentional and often oral) partnership, and make it clear that any final agreement will be a written instrument signed by each party.  Then, in actual agreements provide that irrespective of the terms to the relationship it is not a “partnership” (well, unless it is a partnership).