How is the value of goodwill excluded in a business partnership agreement?

Ontario, Canada


The following excerpt is from Wood Vallance & Co. (Re), 1915 CanLII 18 (ON CA):

We were referred to several cases upon the argument, at which I have of course looked. But, as has often been said, cases upon the construction of documents are seldom of use in construing other documents in other eases. Each case must depend upon its own particular facts and circumstances. For instance, Steuart v. Gladstone, 10 Ch.D. 626, was cited and is also referred to in the judgment as an authority for the proposition that the value of the goodwill is to be excluded in such a case as this. But that is not there laid down as a general proposition, but simply as the proper conclusion to be drawn in that case from the terms of the agreement between the parties, which in no way resembled the very much simpler case with which we are dealing. There the agreement contemplated a partnership comprising several partners, and contained provisions for a partner dropping out, or even being forced out, as the plaintiff was by his copartners; the business continuing. Here the partnership is quite at an end, and the only real question is as to the proper division of the assets.

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