What type of partnership automatically transitions to a partnership at will?

The correct choice is a partnership based on mutual consent. In partnership law, a partnership that is established for a fixed term automatically transitions to a partnership at will once the fixed term expires, unless the partnership agreement states otherwise. This transition occurs because the intent of the partners was initially to engage in the business for a specific period, but upon the lapse of that time without a formal renewal or extension agreement, they continue their business relationship without a defined term.

In contrast, a partnership for a fixed term explicitly restricts the duration of the partnership, meaning it does not automatically become a partnership at will unless there is an agreement indicating such. Partnerships with a clearly defined duration will not transition into a partnership at will unless the partners take action to change their agreement. A partnership with no written agreement can still be at will or for a fixed term based on the conduct of the partners, but it is not definitively categorized as one or the other without further context.

Understanding these nuances about how partnerships operate differentiates the different types and their implications.