The Fiduciary Obligations of Partners

When a partner is involuntarily expelled from a biz, his expulsion must have been _______________ for a dissolution to occur without violation of the partnership agreement?

"bona fide" or in "good faith"

A business is defined as? It includes?

A series of acts directed toward an end. Every trade, occupation, and profession.

Pre-withdrawal recruitment is generally allowed only when?

After the firm has been given notice of the lawyer's intention to withdraw.

A partnership is?

An association of two or more persons to carry on as co-owners a business for profit.

The crucial elements of a partnership?

An intention to be partners. Co-ownership of the business. A profit motive.

ABA ethical standard for attorneys announcing a change in professional association?

Any notice must explain to a client that he has the right to decide who will continue the representation.

The court will only imply contract terms when the party asserting the implied covenant proves that the other party has acted? When conducting this analysis, the court assesses the parties?

Arbitrarily or unreasonably, thereby frustrating the fruits of the bargain that the asserting party reasonably expected. Reasonable expectations at the time of contracting.

One can't base a claim for breach of an implied covenant on conduct that is?

Authorized by the agreement.

Where a dispute arises from obligations expressly addressed by contract, that dispute will be treated as a? Any fiduciary claims arising out of the same facts that underlie the contract obligations would be?

Breach of contract claim. Foreclosed as superfluous.

A partnership relationship can be created by oral agreement but proof of the fact of partnership and its terms must be established by what level of proof?

Clear, unequivocal, and decisive evidence.

For a business enterprise to constitute a joint venture, the following four elements must be present?

Contribution by the parties of money, property, time, or skill in some common undertaking, but the contributions need not be equal or of the same nature. A proprietary interest and right of mutual control over the engaged property. An express or implied agreement for the sharing of profits, and usually, but not necessarily, of losses. An express or implied contract showing a joint venture was formed.

Unless authorized by the other partners ... one or more but less than all the partners have no authority to? What is this rule's purpose?

Do any act which would make it impossible to carry on the ordinary business of the partnership. To limit the liability of the other partners for the unauthorized act of one partner; in other words to protect the partners.

The implied duty of good faith and fair dealing is not a?

Equitable remedy for rebalancing economic interests after events that could have been anticipated, but were not, that later adversely affected one party to the contract.

The relationship btw partners is in what character? It imposes upon all the participants the obligation of?

Fiduciary Loyalty to the joint concern and over the utmost good faith, fairness, and honesty in their dealings with each other with respect to matters pertaining to the enterprise.

The threat of tort liability for expulsion would tend to?

Force partners to remain in untenable circumstances to their own detriment and that of their clients.

A partner is a fiduciary of his partners, but not of? Why?

His former partners. The withdrawal of a partner terminates the partnership as to him.

The members of a partnership owe each other a duty of loyalty and good faith, and as fiduciaries, a partner must consider?

His partner's welfare, and refrain from acting for purely private gain.

As a fiduciary, a partner must consider?

His partners' welfare, and refrain from acting for purely private gain.

Fiduciaries may plan to compete with the entity to which they owe allegiance, provided that?

In the course of such arrangements they do not otherwise act in violation of their fiduciary duties.

For these co-adventurers, the rule of undivided loyalty is relentless and supreme?

Managing co-adventurers

A joint venture is similar to a partnership but is? Do the principles of partnership law apply to joint ventures?

More limited in scope and duration. Yes.

A partner can be expelled without subjecting the partnership to tort damages for accusing another partner of? Why?

Overbilling. Such charges may have a profound effect on the personal confidence and trust essential to the partner relationship.

A partnership exists solely because the partners choose to?

Place personal confidence and trust in one another.

A partnership may expel a partner for?

Purely business reasons. To protect relationships both within the firm and with clients. To resolve a fundamental schism.

Conduct that is underhand or lacking in reasonable candor, does not?

Receive from equity a healing benediction.

The fiduciary duty that partners owe one another does not encompass a duty to?

Remain partners or else answer in tort damages.

Partnerships exist by the agreement of the partners therefore partners have no duty to?

Remain partners.

Where the remaining partners in a firm deem it necessary to expel a partner under a no cause expulsion clause in a partnership agreement freely negotiated and entered into, the expelling partners act in "good faith" regardless of motivation if?

That act does not cause a wrongful withholding of money or property legally due the expelled partner at the time he is expelled.

The fiduciary relationship between partners to which the terms "bona fide" and "good faith" relate concern? And prohibit a partner from?

The business aspects or property of the partnership. Taking any personal advantage touching those subjects.

Co-adventurer has a duty not to exclude his co-adventurer from this chance?

The chance to compete, the chance to enjoy the opportunity that had come to him alone by virtue of his agency.

The manner in which partners plan for and implement withdrawals is subject to?

The constraints imposed on them by virtue of their status as fiduciaries.

The time a dissolution occurs is statutory: Dissolution is caused without violation of the agreement between partners by? On what date does the dissolution occur?

The expulsion of any partner from the biz bona fide in accordance with such a power conferred by the agreement between the partners. On the date of expulsion in accordance with the partnership agreement, not when the partner is notified of the proposal to expel him.

Joint adventurers like partners owe to one another, while the enterprise continues, the duty of? What is the standard of behavior in executing that duty?

The finest loyalty. Not honesty alone, but the punctilio of an honor the most sensitive

The existence and scope of a fiduciary duty depends on?

The language of the parties' agreement.

If the power to involuntarily expel partners granted by a partnership agreement is exercised in bad faith or for a "predatory purpose," then?

The partnership agreement is violated, giving rise to an action for damages the affected partner has suffered as a result of his expulsion.

A partner owes duties of loyalty and care to the other partners. What does that duty of loyalty entail?

To account to the partnership and hold as trustee for it any property, profit, or benefit derived by the partner in the conduct and winding up of the partnership business or derived from a use by the partner of partnership property, including the appropriation of a partnership opportunity; To refrain from dealing with the partnership in the conduct or winding up of the partnership business as or on behalf of a party having an interest adverse to the partnership; and To refrain from competing with the partnership in the conduct of the partnership business before the dissolution of the partnership.

A partner has an obligation on demand to render?

True and full info of all things affecting the partnership to any partner.

Partnership is a creature of?

Voluntary agreement.