During my time as an agriculture attorney, I have seen unnecessary legal disputes arise between horse owners due to either a poorly drafted partnership agreement or the absence of a memorialized agreement. Even if you are going into business with someone you know and trust, a handshake won’t protect you if unexpected things go wrong. Having a partnership agreement in place can help salvage friendships and business relationships.
Each state has “default rules” for partnerships when there is not a written agreement or the agreement is silent on certain terms. To avoid surprises, horse owners are encouraged to get the terms of the agreement in writing so a court will enforce the terms of the partnership that you decided on.
Consider the following issues in a well-crafted partnership agreement:
1. Names and addresses of the partners;
2. Name of the partnership;
3. Purpose of the partnership;
4. Term of the partnership;
5. Initial contribution of the partners;
6. Additional contribution requirements;
7. Assets of the partnership;
8. Allocation and distribution of profits and losses;
9. Duties of partners;
10. Expenses of partnership;
11. Management and control of business;
12. Effect of a default;
13. Amendments to partnership agreement;
14. Effect of partner’s death or incapacity;
15. Assignability of ownership interest;
16. Arbitration, mediation, and/or forum selection clause; and
17. Dissolution and winding up of the partnership.
Of course, there are other issues that may need to be discussed in the partnership agreement depending on your specific situation. Partnership law is state specific so if you are considering drafting a partnership agreement, make sure you consult an attorney licensed in your jurisdiction.
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Written by Cari Rincker, Rincker Law, PLLC. Click here to read Cari’s bio!
Photo credit: www.sxc.hu
