When it comes to forming a business partnership, it is important to understand that it can be established in several ways. The agreement to form a partnership may be oral, written, or implied from the conduct of the parties. In this article, we will delve into the different forms of partnership agreements and their implications.

Oral Partnership Agreement:

An oral partnership agreement is an agreement between two or more individuals that is not reduced to writing. This type of agreement is often referred to as a verbal agreement. Although oral partnership agreements are legally binding, they can be difficult to enforce because there is no documentation outlining the partnership’s terms.

Written Partnership Agreement:

A written partnership agreement is a legal document that outlines the terms and conditions of the partnership between two or more individuals. This document serves as evidence of the partnership’s existence and outlines how the partnership will be managed, the responsibilities of each partner, the distribution of profits and losses, and how the partnership can be dissolved.

Implied Partnership Agreement:

An implied partnership agreement is an agreement that has not been explicitly stated but is established through the actions of the parties involved. This type of agreement is often created through consistent business practices or conduct that suggests the presence of a partnership. For example, if two individuals consistently work together, share profits, and split expenses, an implied partnership agreement may be formed even if there is no written or oral agreement.

It is important to note that implied partnerships can be dangerous because they are open to interpretation. When a partnership is implied, it often lacks clear guidelines and can result in disagreement or legal disputes down the line.

In conclusion, when forming a partnership, choosing the right type of agreement is essential. Oral agreements, while legally binding, can be difficult to enforce in court. Written agreements offer the most protection and provide clear guidelines for both parties. Implied agreements can be created unintentionally and therefore, should be avoided as much as possible.

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