A partnership contract is a document which highlights the terms and conditions that will govern a partnership between two individuals, two companies or business enterprises. It must be well written and comprehensive. It is a legal document and hence, this entails the incorporation of certain factors in its composition which will render a partnership contract document valuable and efficacious. The agreement must be written by professionals. Certain points which need to be kept in mind while composing partnership contracts are as follows:
- A partnership contract is a legally sanctioned document which must therefore conform to the legal framework of the United States, in order to be ratified. In case of a breach of contract, the laws of the land can be appealed to. Thus, this document not only provides a record of the partnership, it also ensures that the government and the judiciary of the country are aware of the deal.
- This kind of agreement document must provide the necessary information about the partnership to be formed. This includes both personal and professional information regarding the two partners, and also the nature of the partnership, its duration, dates of commencement and termination.
- A agreement must be especially clear about the most crucial aspect of the deal, which is the financial issue. It must clearly highlight the monetary exchanges between the two parties, their profit sharing scheme, and their division of expenditures and so on. This is particularly important since this is the most contentious issue of any agreement and the most likely to invoke controversies and doubts.
- Such an agreement must be written clearly with all the important facts carefully incorporated. Any mistake in the document will result in confusion and ambiguity which are highly undesirable in a document of law. It must be carefully revised and written by professionals who are familiar with the technical and legal jargon that they must write this document in.
- The must be conformed to. It has enormous value, both as a document that contains information about the partnership and will be referred to at every step of the agreement, but also as evidential and archival material. In case of any breach of contract(1), the case shall be solved using this agreement document as the touchstone.
Thus, a partnership contract document must be carefully constructed. It has several sections to it and each section must be delineated and completed with equal consideration.