Continuing fixed-term partnership terms PA 1890 s. 27
When a fixed-term partnership continues past its expiry without a new agreement, old terms apply so far as consistent with a partnership at will.
Where a partnership entered into for a fixed term is continued after the term has expired, and without any express new agreement, the rights and duties of the partners remain the same as they were at the expiration of the term, so far as is consistent with the incidents of a partnership at will. A continuance of the business by the partners or such of them as habitually acted therein during the term, without any settlement or liquidation of the partnership affairs, is presumed to be a continuance of the partnership.
Text in force at .
Source: legislation.gov.uk — The National Archives (legislation.gov.uk), reproduced under licence Open Government Licence v3.0.
What it actually says
When partners agree to trade together for a set duration, that contract naturally reaches its end when the time elapses. If the partners simply keep trading without signing a fresh contract or settling up the business, this provision creates a legal presumption that the partnership continues under its previous rules.
However, because the original fixed end date has passed, the business becomes a partnership at will. Existing terms regarding profit shares, duties, and management rules stay in force, but any term that contradicts the right to dissolve or leave a partnership at will no longer applies.
When it applies
- Partners in a professional practice reach the expiry date in their original deed but continue managing clients and sharing profits as usual.
- An active partner continues handling daily trading after the agreed partnership duration ends without any partner requesting a liquidation of assets.
- A partner disputes profit shares after the contractual term ends, while all members have continued running the business without a new written agreement.
What this section does not say
- How a partner may leave or dissolve a partnership at will by giving notice, which is governed by PA 1890 s. 26 and PA 1890 s. 32.
- Varying terms during an ongoing active agreement by mutual consent, which is governed by PA 1890 s. 19.
- Winding up firm business and settling accounts after dissolution, which is governed by PA 1890 s. 38.
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This page reproduces the text of PA 1890 s. 27 in force at the date shown and explains it in general terms. It is not legal advice and takes no account of the circumstances of your case, which can change the answer completely. For a live dispute, for limitation periods, and before taking any step in court, consult a qualified lawyer in England and Wales.