What is the purpose of an outgoing partner agreement?

The primary purpose of an outgoing partner agreement is to prepare for the exit of a business partner. Such agreements are crucial in outlining the terms and conditions under which a partner leaves the partnership, ensuring a smooth transition and minimizing potential conflicts or misunderstandings that may arise during the exit process. This agreement typically covers various aspects, such as the valuation of the departing partner's share, the payment structure, and the division of assets and liabilities.

While implementing valid non-compete clauses and other provisions can be part of a broader partnership agreement or the conditions surrounding a partner's exit, the central focus of an outgoing partner agreement is on facilitating the departure itself and ensuring that it aligns with the partnership's operational continuity. This plays a critical role in maintaining stability within the remaining partnership.