Section 178 The Indian Contract Act, 1872
Section 178 – The Indian Contract Act, 1872
Title: Termination of partnership by death
📜 Bare Act Language:
"The partnership is dissolved by the death of a partner, unless there is an agreement to the contrary."
🔍 Explanation:
This section deals with the effect of a partner’s death on a partnership.
Generally, the death of any partner dissolves the partnership automatically.
However, if the partners have made a specific agreement that the partnership will continue despite the death of a partner, then the partnership may not dissolve.
This provision safeguards the interests of the deceased partner’s estate and other partners.
🧠 Key Points:
Default rule: Death = dissolution of partnership.
Partnership can continue if agreement says so.
Protects legal clarity about business continuity and liabilities.
⚖️ Example:
If A, B, and C are partners and A dies, the partnership is dissolved unless their partnership deed provides that B and C can continue the business.
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