============================== CFJ 2041 ==============================
If a partnership incurs contract obligations from another contract
while a particular member is a member, and that member departs the
partnership, the member in question may be required by an equity
settlement involving the second contract to be a party to the
settlement, even if the partnership agreement does not explicitly
Called by G.: 24 Jun 2008 21:32:17 GMT
Assigned to Quazie: 26 Jun 2008 03:23:49 GMT
Judged TRUE by Quazie: 02 Jul 2008 17:48:03 GMT
R2145 requires that partnerships devolve responsibilities to its
members. Since it is required by Rule, this devolution must be
construed even if the partnership agreement does not specify it
(although if the partnership does specify, an equity court should
give deference to the specification as long as doing so maintains
To prevent R2145 from being meaningless in construing devolution,
"fair equity" should be interpreted so that this devolution allows
contract obligations to be pursued down to a partnerships' members,
regardless of "membership games" that might be played. Note that
the statements are phrased negatively in terms of "obligations", but
a TRUE judgement on these statements (which I am arguing for) would
also imply that former members might also pursue benefits (e.g.
collect on things they are owed even beyond the lifetime of the
partnership) as well.
Rule 2145/4 (Power=2)
A binding agreement governed by the rules which devolves its
legal obligations onto a subset of its parties, numbering at
least two, collectively, is a partnership. The members of a
partnership are those parties onto whom the partnership's legal
obligations are collectively devolved. A partnership's identity
and partnershiphood are not disrupted by changes to its
membership provided that it continues to meet the definition of
A partnership's basis is the set consisting of the union of the
the bases of each of its members. Where circularity occurs in
this definition, it is resolved by using the minimum basis sets
that provide consistency.
A partnership that is a public contract and whose basis contains
at least two persons is a person.
Judge Quazie's Arguments:
This CFJ I find to be TRUE, but only in cases in which the equity case
is about an obligation that was incurred while the former member in
question was still a member of the partnership. As the partnership
still exists, it is still able to incur obligations.
Furthermore when the partnership is required to become party to a
settlement not all of the players that incurred the obligation have
become part of the settlement. As a result, a former
member is unable to escape their obligation by leaving the partnership
and may be required to become party to the settlement.