51 - The problem with unwritten partnership agreements

When Informal Deals Become Legal Partnerships Host Melissa Bush explains that under Australian law, a partnership can exist without a written agreement if people carry on a business in common with a view to profit, and courts determine this from conduct and evidence such as profit sharing, control, contributions, records, and representations to others. She outlines major consequences, including partners acting as agents who can bind each other, joint and several personal liability for debts, and fiduciary duties. The episode discusses Hallam v Tancred, where an arrangement labelled as employment was found on appeal to have partnership hallmarks, and a NSW cafe dispute case (Pitac v Sdo) showing vague informal understandings and undocumented cash claims failing against formal company records. Bush covers dissolution, valuation, death of a partner, and urges documenting contributions, profit distribution, decision-making, exit and valuation mechanisms, estate planning alignment, and tax considerations through a formal partnership deed. 00:00 Handshake Deals Risk 01:29 Show Intro Disclaimer 02:37 Partnership Basics NSW 04:11 Legal Consequences Partners 05:21 Case Hallam Tancred 07:11 Cafe Dispute Case 09:41 Exit Without Agreement 11:33 Hidden Liability Risks 12:41 Death Estate Issues 13:49 Why Avoid Agreements 14:49 How To Protect Yourself 16:14 Key Takeaways Wrap 17:29 Final Call To Action