Partnership with no term: it can last the partners’ whole lives

They are Articles 1452 and 1453 of the Civil Code of 2020: how long a partnership lasts, what happens where no duration was agreed, and when one that did have a term may be dissolved early.

Partners in a partnership governed by the Puerto Rico Civil Code, with or without an agreed term.

• The partnership exists from when it is contractually perfected and lasts the agreed time.Verified against the official source
• Failing an agreement on duration, Article 1452 gives four alternatives, one of them the whole life of the partners.Verified against the official source
• To dissolve before the term expires, just cause is required.Verified against the official source
• Article 1453 names two just causes — a partner failing in their obligations and becoming unfit for the partnership’s business — and admits another similar one in the judgement of the courts.Verified against the official source

• The partnership contract with the agreed term, if any: it is the first thing Article 1452 looks at.
• The proof of just cause, if early dissolution of a partnership with a term is sought.

1. 1

   Step 1: From when it exists

   Article 1452, first sentence: the partnership exists from when it is contractually perfected. Not from when it is registered, nor from when it starts operating: from when the contract is perfected.

2. 2

   Step 2: And until when, if they agreed it

   The same sentence closes it: it lasts the agreed time. If the contract carries a term, that term governs.

3. 3

   Step 3: If they agreed nothing: the life of the business

   Subsection (a): for the time the business that gave rise to its existence lasts, if that business, by its nature, has a limited duration. The condition is written: only where the business, by its nature, has a limited duration.

4. 4

   Step 4: Or the length of the cohabitation

   Subsection (b): for the time the cohabitation lasts. It squares with the chapter’s definition, which admits putting cohabitation in common; the Code does not define it there or here, and neither does this guide.

5. 5

   Step 5: Or until a ground for resolution appears

   Subsection (c): until one of the causes giving rise to contractual resolution supervenes. The article refers to the general grounds for resolution of contracts without repeating them.

6. 6

   Step 6: Or the partners’ whole lives

   Subsection (d): for the whole life of the partners. It is the one most worth knowing before signing with no term, because the Code sets it as one of the four possible outcomes when the contract is silent.

7. 7

   Step 7: Four alternatives, with no written order

   The text separates the four and puts "or" before the last: they are alternatives. What the Code does not say is who chooses among them or in what order they are tried. This guide reproduces them as they stand and invents no hierarchy.

8. 8

   Step 8: Ending it early: just cause is required

   Article 1453: a partnership constituted for an agreed time may be dissolved before the term expires if there is just cause for its dissolution. The rule is written for partnerships with a term.

9. 9

   Step 9: The two examples the Code gives

   The same article names them: one of the partners failing in their obligations, and becoming unfit for the partnership’s business. They are introduced by "such as", so they are examples and not a closed list.

10. 10

    Step 10: And the third, decided by the court

    The article closes with "or another similar cause in the judgement of the courts". Whether a cause is similar is expressly left to the courts; the Code gives no criteria and this guide supplies none.

11. 11

    Step 11: What these articles do not carry

    There is no procedure to ask for the dissolution, no period to ask within, no fee, and no rule on how the partnership’s estate is liquidated afterwards. Nor do they say what a partner who wants out of a partnership with no term does. None of that is here.

Article 1453 expressly refers to the judgement of the courts to assess a similar cause: the forum is the Court of First Instance. The Code names no administrative agency for this chapter.

• Signing a partnership with no term without knowing one of the Code’s alternatives is the partners’ whole lives.
• Reading the four alternatives of Article 1452 as ordered steps: the text separates them with "or".
• Believing subsection (a) applies to any business: it requires that the business, by its nature, have a limited duration.
• Seeking early dissolution without just cause where the partnership has an agreed term.
• Taking the two examples of Article 1453 as a closed list: they are introduced by "such as".
• Assuming a similar cause is accepted without more: the article leaves it to the judgement of the courts.
• Counting the partnership’s existence from registration: the Code counts it from contractual perfection.
• Looking in these articles for how the estate is liquidated after dissolution: they do not say.

These are the government pages this guide is based on.

• Poder Judicial de Puerto Rico

  Poder Judicial

  bvirtualogp.pr.gov