Also known as: partnerships for a definite term · definite-term partnership
Written by attorneys · grounded in primary & secondary sources — see below
A partnership formed for a fixed duration or to accomplish a specific undertaking. The arrangement imposes a temporal limit that distinguishes it from an at-will partnership and triggers special rules governing dissociation before the agreed endpoint.
Select any source to read its text and confirm it supports the definition.
Patrick Phan, Perry Pratt, and Paula Pierce formed a partnership to run a telehealth clinic tied to a five-year public grant. In year three Patrick sent written notice that he was leaving to join another practice. The remaining partners incurred extra hiring costs and sued Patrick for damages arising from his departure before the grant period ended.
Saint Alphonsus Diversified Care and MRI Associates formed a limited liability partnership to operate imaging centers. After several years Saint Alphonsus announced it would cease participation. MRI Associates claimed the venture had a definite term and sued for wrongful dissociation. The court submitted the question of term length to the jury.
Courts examine the partnership agreement language and surrounding circumstances to decide whether the partners fixed a specific duration or tied the venture to completion of a particular undertaking. Explicit statements such as a five-year pilot project or prosecution through final judgment establish a definite term. Absent such language the partnership is presumed at will.
Supporting sources
The dissociation is wrongful unless it falls within a narrow statutory exception such as withdrawal within ninety days after another partner’s death. The withdrawing partner becomes liable to the partnership and remaining partners for damages caused by the early exit in addition to any other obligations.
Supporting sources
No. Penalty and buyout provisions merely prescribe financial consequences. They do not convert an express prohibition on early exit into a permitted option. Breach of the non-withdrawal clause still renders the dissociation wrongful under the statute.
Supporting sources
The safe harbor applies only when the withdrawal occurs not later than ninety days after the death or other qualifying dissociation. A withdrawal sent ninety-eight days or eleven months later falls outside the exception and remains wrongful in a definite-term partnership.
Supporting sources