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The Accounting Remedy – II

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Statutory Provisions under New York Law

As discussed in our last Blog post, the right to an accounting exists under common law and, in some instances, according to statute

The accounting remedy is codified in New York Partnership Law § 44 and New York Business Corporation Law § 720.  Section 44 of the Partnership Law provides that:

            Any partner shall have the right to a formal account as to partnership affairs:

1. If he is wrongfully excluded from the partnership business or possession of its property by his copartners,

2. If the right exists under the terms of any agreement,

3. As provided by section forty-three[1],

4. Whenever other circumstances render it just and reasonable.

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The “Equitable Accounting” Remedy

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The right to an accounting has its basis both in common law and in statute. 

The law related to common law “equitable accountings” has evolved and changed over the years, and this evolution affords courts much flexibility to achieve just results.  But, the law is still subject to conflicting opinions and inconsistent rules of law.  As New York Supreme Court Justice Judith J. Gische stated after analyzing the law relating to equitable accountings:

“The body of law on equitable accountings is conflicting and muddled.” - Evans v. Perl, 2009 N.Y. Slip. Op. 31413, 2009 WL 1905169 (N.Y. Sup. Ct. June 23, 2009).