1837 duties of partners partners are in a fiduciary

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18.3.7 DUTIES OF PARTNERS Partners are in a fiduciary position to one another. They are supposed to act in good faith and in the interest of the firm and to deal with each other fairly. Every general partner owes the other partners the duties discussed below: 18.3.7.1 Duty of account and information Partners are under a duty to render due and true account and provide full information in respect of partnership matters with which they are concerned – s. 28. In Law v Law [1905] 1 Ch 140 , it was held that in a transaction between co-partners for the sale by one to the other of a share in the partnership business, if the purchasing partner knew more about the partnership account and possessed all material facts about the partnership assets, he was under a duty to make a full disclosure of these to the vendor. If he failed to do this, the transaction would be voidable and might be set aside unless the vendor knowingly chooses not to insist on his right to full disclosure. 18.3.7.2 Duty to account for profits Partners must account to other partners for all profits made without the knowledge or consent of the other partners from any transaction concerning the partnership, its property or business connection – s. 29. In Bentley v Craven [1853] 18 Beav 75 , a partner in a firm was responsible for purchasing sugar. He bought the sugar at a discount but sold it to the firm at the market price. It was held that the other partners were entitled to an account of the profits. Download free eBooks at bookboon.com
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BUSINESS ORGANISATIONS AND AGENCY 345 PARTNERSHIPS In Pathirana v Pathirana [1967] 1 AC 233 , a firm had an exclusive contract with a company. One of the partners in the firm terminated the partnership and entered into another deal with the same company in his own personal capacity. The other partner sued for an account of the profits. It was held that that the new contract was the property of the partnership since it arose from its goodwill and connections, and that the claimant was entitled to an account. See also John Taylors v Masons & Wilsons [2001] EWCA Civ 2106 . 18.3.7.3 Duty not to compete with the firm Partners have a duty not to compete with their firm without the consent of the other partners and to account to the firm for any profits made from any unauthorised competition – s. 30. 18.3.8 DISSOLUTION OF PARTNERSHIPS A partnership may come to an end in different ways, namely retirement, expiration of time, death, bankruptcy or charge. Others are illegality and court order. 18.3.8.1 Retirement Where the partnership is not for a fixed duration, any partner may terminate it at any time by giving notice orally, in writing or by deed (depending on how the partnership was formed) to the others of his intention to retire. 18.3.8.2 Expiration of time Unless the partners agree otherwise, a general partnership dissolves at the end of the time stipulated in the agreement; by the end of the venture or undertaking for which sole purpose it was set up; or by notice of intention to dissolve by any partner if the partnership was for an indefinite duration – s. 32.
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