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Chapter III - Relations of Partners to One Another

Section 11

Section 11: Determination of rights and duties of partners by contract between the partners

The partnership agreement can set mutual rights and duties, subject to the Act, and can be varied by unanimous consent.

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Need advice on Section 11?

This article is for general information. Refer to the Indian Partnership Act, 1932 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.

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Statutory text

Bare law

(1) Subject to the provisions of this Act, the mutual rights and duties of the partners of a firm may be determined by contract between the partners, and such contract may be expressed or may be implied by a course of dealing.

Such contract may be varied by consent of all the partners, and such consent may be expressed or may be implied by a course of dealing.

(2) Notwithstanding anything contained in section 27 of the Indian Contract Act, 1872 (9 of 1872), such contracts may provide that a partner shall not carry on any business other than that of the firm while he is a partner.

Introduction

Section 11 lets the partners set and vary mutual rights and duties by express contract or a course of dealing, subject to the Act.

All partners must consent to a variation, although that consent may also be expressed or implied by conduct.

Key takeaways

1

Agreement controls

The deed can set mutual rights and duties, subject to statutory limits.

2

Variation

A change requires all partners’ consent.

3

Competing business

The contract may bar a partner from other business while that person remains a partner, despite Contract Act Section 27.

Read and vary terms

Identify the original term, the proposed variation and evidence that all partners consented.

Record changes in writing even where conduct may imply consent.

Illustration

If partners change profit allocations over several periods with all partners’ consent, their course of dealing may evidence a variation; preserve the accounting records and correspondence.

Check deed and state law

Check the partnership deed, evidence of every partner’s consent and any applicable state amendment before treating a right or duty as varied.

Practical checklist

Do

  • Document unanimous consent to major deed changes.
  • Check any non-compete clause against the period when the person is a partner.

Avoid

  • Do not treat one partner’s unilateral decision as a variation under Section 11.

Frequently asked questions

Must every variation be written?

The section permits consent expressed or implied by a course of dealing, though a written record reduces disputes.

Can a partner be barred from another business?

Section 11(2) permits such a contractual term while the person is a partner.

Need help applying this provision to your situation?

Contact Bizeneed

Last updated 10 October 2026