During the Survey period, courts handed down a number of cases that highlighted the risk of unintended consequences arising from the drafting of certain provisions of partnership and limited liability company agreements. For example, courts considered the ramifications of a partnership’s broadly-drafted purpose clause, and the extent to which such clause could affect a general partner’s liability. In other cases, the courts’ willingness to give great weight to the terms in partnership and LLC agreements underscored the need for careful drafting of such agreements. And in the context of attorney’s fees, courts highlighted the need for legislative action to clarify whether LLCs should be treated in the same manner as corporations. This article is divided into six main sections that explore recent decisions encompassing the following topics: (II) creation of a partnership; (III) fiduciary duties; (IV) direct versus derivative claims; (V) alter-ego doctrine; (VI) purpose clauses; and (VII) attorneys’ fees.
Jeff Dorrill, et al., Partnership Law, 2 SMU Ann. Tex. Surv. 339 (2016)