The Delaware Court of Chancery recently addressed the complexities of partnership formation–and the importance that an oral agreement contain all material terms–in the decision of Handler v. Centerview Partners Holdings, L.P., C.A. No. 2022-0672-SG (Del. Ch. Apr. 24, 2024).


The case originated from a books and records demand under 6 Del. C. § 17-305, which Centerview, a prominent investment banking advisory firm, refused. The plaintiff, David Handler, joined Centerview in 2008 with the title of “Partner,” but the company maintained that this was merely an honorific designation and that Handler remained an employee. The dispute centered on a meeting in November 2012, where Handler claimed an oral partnership agreement was reached, while Centerview contended that no such agreement was finalized.


In its analysis, Vice Chancellor Glasscock reviewed the nature of partnership agreements under Delaware law. The Court emphasized that while Delaware recognizes oral partnership agreements, they must include all material and essential terms to be enforceable. The Court’s examination revealed that Handler’s original employment letter explicitly stated that his “terminal value interest” did not entitle him to profit sharing, ownership, or governance rights, clearly distinguishing his status from that of a true partner.

The court found that the November 2012 meeting resulted in what was essentially an “agreement to agree,” which is insufficient to establish a binding partnership. This conclusion was supported by the parties’ continued negotiations and exchanges of draft agreements in the years following the meeting. Furthermore, Handler’s conduct, including the ongoing negotiation of his compensation, was deemed inconsistent with the formation of a partnership.

Vice Chancellor Glasscock’s decision drew upon the precedent set in Grunstein v. Silva, reaffirming that for any partnership agreement – oral or written – to be enforceable, all essential terms must be agreed upon. 2014 WL 4473651 (Del. Ch. Sept. 5, 2014). The Court placed the burden of proof on Handler to demonstrate the existence of a comprehensive oral agreement, a burden he ultimately failed to meet.

The decision also addressed the significance of titles in professional settings. The Court colorfully noted that partners with honorific titles “were no more equity holders than Colonel Harland Sanders was a field officer,” underscoring that the title “Partner” alone does not confer actual partnership rights.


Handler serves as a critical reminder of the standards for partnership formation under Delaware law. The decision reinforces several key principles: first, that true partnership involves sharing in both the risks and rewards of the enterprise, not merely holding a partner title, and second, that enforceability requires agreement on all essential terms, regardless of whether the agreement is oral or written.

This ruling has significant implications for businesses and individuals in Delaware, particularly in sophisticated professional contexts. It highlights the importance of clear documentation and agreement on all material terms when forming partnerships. The case underscores the risks of relying on informal understandings or assumed agreements in high-stakes professional relationships.

In Handler, the Court of Chancery reinforced Delaware’s approach to partnership formation, emphasizing the need for clear agreements and consistent conduct. This decision provides valuable guidance to practitioners and serves as a cautionary tale about the complexities of transitioning from employee to partner status in professional services firms. It reaffirms Delaware’s position as a jurisdiction that values clarity and formality in business relationships, particularly in the realm of partnership law.