Opinion ID: 6260849
Heading Depth: 1
Heading Rank: 1

Heading: Partnership Implied from Conduct

Text: A partnership is created by contract; it comes into being as do all contracts, through agreement. A contract is “a manifestation of mutual assent on the part of two or more persons.” American Law Institute, Restatement (Second) of Contracts §3, at 20 (Tent. Draft No. 3, April 13, 1964). The verb “to manifest”, as the word is used in the above Restatement quotation, means “to show plainly”. Random House Dictionary of the English Language (1967). Like all contracts, partnership contracts may be either express or implied. “The distinction involves, however, no difference in legal effect, but lies merely in the mode of manifesting assent. [A] ssent may be manifested by words or other conduct, sometimes including silence . . . or by . . . other circumstances, including course of dealing or usage of trade or course of performance.” Restatement (Second) of Contracts §5, at 12 (Comment). 5 There is no requirement that partnership agreements be in writing. Gohen v. Gravelle, 411 Pa. 520, 192 A. 2d 414 (1963); Pappas v. Klutinoty, 383 Pa. 184, 118 A. 2d 202 (1955). They may be made orally or may be found to exist by implication from all attending circumstances (i.e., the manner in which the alleged partners actually conducted their business, etc.). Gohen v. Gravelle, supra; O’Donnell v McLoughlin, 386 Pa. 187, 125 A. 2d 370 (1956); Miller v. Miller, 370 Pa. 520, 88 A. 2d 784 (1952). 6 As to this latter method (partnership implied from conduct), the chancellor held that a “course of conduct between the parties can only be considered as it might establish a partnership between the parties as to the claims of third persons. Such a course of conduct does not establish a partnership between themselves in the absence of an agreement, either express or implied.” 7 In so concluding we are of the opinion that the chancellor fell into error. As will be seen, however, (see part III, infra), this limitation on partnership implied from conduct did not lead to a wrong result.