Pav-Saver Corporation v. Vasso Corporation
Illinois Court of Appeals
493 N.E.2d 423 (1986)
Pav-Saver Corporation (plaintiff) and Vasso Corporation (defendant) formed a partnership to manufacture paving machines, with Pav-Saver contributing intellectual property and its principal managing operations; their agreement made the partnership perpetual absent mutual termination, and specified that if one party terminated unilaterally, Pav-Saver would reclaim its intellectual property while the non-terminating party received liquidated damages. When Pav-Saver unilaterally terminated the partnership, Vasso instead took over operations and retained control of Pav-Saver's intellectual property under the state's Uniform Partnership Act, which allows non-terminating partners to continue a wrongfully terminated partnership's business by paying the exiting partner the value of their interest (excluding goodwill); Pav-Saver sued to recover its property, Vasso countersued, and the trial court ruled for Vasso on both the property and liquidated damages.
Whether a partnership agreement's private provision entitling a partner to reclaim contributed intellectual property upon unilateral termination can override the Uniform Partnership Act's statutory rule allowing the non-terminating partner to continue the business and retain partnership property.