During the Survey period, Texas courts handed down cases emphasizing that a drafter’s choice of words in the partnership agreement can have dramatic effects in determining the rights and liabilities of partners. Specifically, the Texas Supreme Court reversed a court of appeals decision that interpreted a partnership’s purpose clause in such a way as to dramatically increase a limited partner’s ability to act on behalf of the partnership. In other cases, courts showed a willingness to interpret applicable law in such a way as to permit creditors and other claimants to collect against partnership assets, especially where the owners of the subject partnership interests had perpetrated a fraud or otherwise acted in bad faith to shield partnership assets. This article is divided into seven main sections that explore recent decisions encompassing the following topics: (1) existence of a partnership; (2) personal liability of members for fraudulent transfers; (3) personal liability of members or managers under agency principles; (4) admission of an estate’s representative as limited partner; direct versus derivative claims; (5) purpose clauses and authority of limited partner; (6) divorce and partnership property; and (7) creditors’ remedies against a partner.
Jeff Dorrill, et al., Partnership Law, 3 SMU Ann. Tex. Surv. 321 (2017)