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.
The rules to establish the existence of a partnership should be viewed in the light of the crucial factor of the intent of the parties revealed in the terms of their agreement, conduct, and the surrounding circumstances when determining whether a partnership exists.View Full Point of Law
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.