In Connecticut, a general partnership can be established by “agreement, whether written, oral or implied, among the partners concerning the partnership,…” Conn. Gen. Stat. 34-301 Definitions (General Statutes of Connecticut (2024 Edition)).
A partnership can be established until a time certain, or for a specific purpose, or at will, or under an agreement as to when partners may be discharged from the partnership.
In the 1990 Connecticut Supreme Court case styled Messina v. Calandro, at issue was a partnership for a specific purpose. Two long-time friends made an oral agreement to go partners in developing a parcel of land in Derby. The idea was that they would complete the partnership either by selling the unimproved land with zoning approval for housing, or by selling the fully-improved land with condominiums. There was no other plan for winding up the enterprise or discharging a partner.
This worked to the plaintiff’s advantage when his friend, who became the defendant, tried to unilaterally end the partnership and take the proceeds. The Supreme Court held that the plaintiff was entitled to an accounting of 40% profits, because “Upon dissolution, a withdrawing partner is entitled to a pro rata share of fees received after dissolution for work done before dissolution.” Messina v. Calandro, 572 A.2d 1012, 214 Conn. 596, 601 (Conn. 1990). The key point underlying this statement was that the oral general partnership was not dissolved until the condominiums were sold.
This worked to the plaintiff’s advantage – but it could have gone the other way! If the partnership came to a loss before its purpose was accomplished, being a general partnership without any written limitations, the erstwhile plaintiff could instead have been a defendant, with partnership creditors coming to collect – despite his friend having long since “discharged” him.
In forming a partnership, be careful whether it’s done by written, oral, or implied agreement – and whether it’s for a time certain, for a purpose, at will, or under some other arrangement.
