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Hall & Oates Lawsuit Highlights the Importance of a Business Partnership Agreement

1980s pop hit makers and long-time business partners Daryl Hall and John Oates (known as Hall & Oates) are engaged in a legal battle.  Hall sued Oates for breach of their partnership agreement related to the ownership of their songs, which are worth millions of dollars.  According to reports, Hall and Oates are partners in a limited liability partnership (“LLP”) that owns the rights to their songs, along with a third partner, Primary Wave IP, LLC.  Hall sued his band member after Oates attempted to sell off all of his ownership to their third partner without Hall’s consent.

Reports further state that Hall sought a Temporary Restraining Order to prevent the sale and to force the parties to resolve the matter through arbitration.  Although the details of their partnership agreement are confidential, it likely includes a section which outlines when a partner can sell their ownership, and when they are prohibited from selling.  This section typically will state whether such a sale requires the unanimous consent of all of the partners.  If Hall & Oates’ agreement requires unanimous consent for a sale, Hall will likely prevail and will be able to prevent Oates from selling his ownership portion.

This case highlights the importance of a well-drafted partnership agreement and a properly formed business structure (see our previous article on this subject).  A proper business agreement will include key provisions, such as the allocation of profits and losses, and what must occur in order for an owner to sell their interests or dissolve the company.  It will also place restrictions on the owners to prevent them from taking action that the other owners do not agree with.  Without such an agreement, it is easy for disputes to arise between business partners that could ultimately collapse the business and lead to legal disputes. 

For more information about how Chauvel & Glatt can help form a business for you and draft a business partnership agreement that protects your interests, contact its experienced business attorneys at (650) 573-9500.  

The material in this article, provided by Chauvel & Glatt, is designed to provide informative and current information as of the date of the post. It should not be considered, nor is it intended to constitute, legal advice or promise similar outcomes. For information on your particular circumstances, please contact  Chauvel & Glatt at 650-573-9500.

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