It is important to remember that each has its own unique disadvantages.

There are other principles and clauses that can be used as well. The disadvantage, though, is that you could end up owning something that you never desired to possess.

The main advantage is that it is quick and final (and often there are no or very few ‘bad feelings’ between partners afterwards). There are several advantages and disadvantages in employing this method. This is an extremely delicate process where accountants and psychologists have to sit together to determine a bid that will give you what you want (if your offer is to high, you may end up paying it yourself)! This method is both brilliant and ruthless! It is more complicated than what it seems at first. If she declines, she has to return the same offer to John (R2 million) and John must accept (ending up owing the furniture factory)! Now Mary must decide whether she accepts this offer or decline it! If Mary accepts the offer, she pays John the R2 million and he goes off and away with the cash in his pocket. John notifies Mary that he offers his half of the business to her for R2 million. They fortunately had included a ‘Texas Shoot-out’ clause in their initial agreement. John wants to get out of the business due to constant conflict with Mary. The net worth of their venture is R5 million. This offer must then be accepted otherwise the declining member is obliged to sell all his/her 50% shares to the proposer at the same price.įor example lets assume that John and Mary have a 50/50 partnership in a furniture factory in town. This mechanism commences with one member notifying the other member of his/her intention to sell to that member his/her 50% shares at a specific price. The principle of ‘the Texas shoot-out’ is most commonly applied where each member owns 50% of shares and one or both partners want to end the relationship. This escape clause and principle are often confused by terms such as the “Savoy clause” or the “Russian roulette” escapes. It might be a good idea to sign the escape clause (or pre-nuptial) when the champagne is bubbling! Legal remedies for your dilemma are seldom sufficient, so the only refuge you may have to get out of some of these relationships and agreements may be to employ a mediator, negotiator or to initiate some form of intervention by a third party or by yourself.ĭifferent methods could be used to terminate a relationship but we want to consider a few unique but well practised ways towards a speedy escape (lets hope that you have already included these clauses in your initial contract)! Suppose for instance that you bought a farm or holiday cottage with your friend or that you started a 50/50 partnership with your brother in law! Your country’s legal system may provide laws of termination (such as divorce and labour laws), but such laws seldom apply to the kind of deal that you have signed. The contracts that govern the relationship between you and someone else seldom make provision for termination by one party. Some of the most common reasons for individuals wanting to exit partnerships or contracts are things like insolvency, change of company control, death or terminal illness of a shareholder, severed relationships, ego clashes, conflict in business culture, emigration and many others. Then, when they later want to ‘get out’ of deals, their options are often extremely limited. Not many people consider (at the time of entering the relationship) the fact that it is likely that there will be a break-up time in future. Statistics indicate that the majority will, somewhere in the future, due to many personal and financial reasons, reach a point of such conflict or deadlock that parties want to ‘get out’! Most partnerships, joint ventures, marriages and many contracts and alliances start off with big plans, grand expectations, speeches and champagne!

Adult three way deadlock