Abstract

Partnership law in the United States and England has long differed on a basic question that has pervasive significance: if a partner wishes to terminate membership in a general partnership, is the partner bound by a prior agreement to remain a member of the partnership? English partnership law has long made such agreements enforceable. In contrast, under U.S. partnership law, a partner who exits from a general partnership prior to an agreed-upon term or otherwise in contravention of the partnership agreement is subject to liability for breach of contract but has power to exit prematurely by dissolving the partnership or by dissociating from it. My thesis is that general partnership law in each country strikes a different balance between stability for the partnership association and risk over time as perceived by each individual partner. These tradeoffs make the general partnership in the United States less stable as a form of business association, but also reduce certain risks otherwise borne by individual partners.