Brief Fact Summary. Plaintiff, Southex Exhibitions, Inc., took over Sherman Exhibition Management (SEM), a company that had contracted with Defendant, Rhode Island Builders Association, Inc., to produce home shows. Plaintiff maintained that the agreement between SEM and Defendant formed a partnership.
Synopsis of Rule of Law. The determination of whether a partnership exists requires an analysis of a extensive set of factors that indicate the extent of the relationship in question.
Issue. The issue is whether the 1974 agreement, along with the conduct of SEM and Defendant, established a partnership between SEM and Defendant.
Held. The 1974 agreement between Defendant and SEM does not establish a partnership, and therefore Defendant owes no obligation to Plaintiff arising from the 1974 agreement. The court did not think that the agreement itself established a partnership; the agreement was not titled “Partnership Agreement”, the agreement used the term “partner” only once, and SEM never considered themselves as partners. As far as their conduct post-agreement, the parties may have split the profits but they never shared in tangible property, did not hold themselves out as partners to third parties nor gave the collaboration a separate name. The totality of the factors favored a non-partnership relationship.
Discussion. In Fenwick v. Unemployment Compensation Commission, the court deemphasized the fact that the parties referred to themselves in the agreement as partners, ruling that a partnership is determined by how the relationship works day-to-day rather than the parties’ intentions. In this case, the court puts substantial weight towards the parties’ intentions.