Shabbat Parashat Reeh| 5767
The Dissolution of a Partnership - Based on Halacha Psuka, vol. 13
Case: The plaintiff and defendant formed a joint business project, at whose inception each invested an equal amount of money. However, the way the business is legally registered, the defendant is listed as the owner of the business and the plaintiff as his employee. The sides are in the process of dissolving their partnership. The plaintiff wants to break it up along the lines of the legal representation of the business. In other words, the defendant would receive the assets of the business and the plaintiff would be paid for unpaid work, as compensation for having his employment terminated, and the like. The defendant says that the two were full partners and that the representation of employer/employee was done to solve unrelated technical issues. He wants the dissolution to be done into equal parts without worker’s compensation. The plaintiff also claims that the defendant was negligent in his work in a manner that harmed the business and this should be reflected in the terms of the dissolution.
Ruling: The Shulchan Aruch (Choshen Mishpat 176:3) says that two craftsmen who agree to share their profits from clients do not form a binding partnership because people cannot make transactions regarding future matters (profits from future work). The Rama (ad loc) brings three differing opinions. According to the first two, the partnership can be made, the difference being whether a kinyan is necessary to formalize it. The third opinion is that the agreement is binding in regard to profits that were made prior to the decision to back out of it but not into the future.
In the case at hand, the partnership was based primarily around work, not property Therefore, according to the Shulchan Aruch, the agreement could be altered and one could argue that when it was registered as an employer/employee relationship that is what happened. Even according to the Rama, one opinion states that regarding the future, the agreement can be changed. However, since this partnership also includes property, the partnership takes hold and the additional work that they did together can be seen as ensuring the viability of the partnership that is based on property.
The claim that the defendant was negligent in his work is not relevant at this point, when they are already dissolving the partnership. Firstly, in the meantime, the partners continued to work together in a way that indicates mechila on his shortcomings. Secondly, one can demand compensation from the other partner for his negligence only if his work did not meet the minimum standards of reasonable work. The plaintiff did not come close to convincing beit din that this was the case.
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This edition of Hemdat Yamim is dedicated to the memory of
R' Meir ben Yechezkel Shraga Brachfeld o.b.m.
Hemdat Yamim is also dedicated by Les & Ethel Sutker of Chicago, Illinois in loving memory of
Max and Mary Sutker
and Louis and Lillian Klein, z"l.
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