Two owners who each hold half of a business can never produce a majority between themselves. The Uniform Partnership Act (1997) decides ordinary business questions by "a majority of the partners" and reserves anything outside the ordinary course, or any change to the agreement itself, for the consent of all of them (section 401(j)). One person is not a majority of two, so a 50/50 partnership that writes nothing further has written a business that can be frozen by either owner, over anything, forever.

That is the whole reason a deadlock clause exists, and it is why it matters more at 50/50 than at any other split. A 60/40 partnership has a tiebreaker built in: the 60 percent owner. A 50/50 partnership has to build one, and the six ways to do it trade off against each other in predictable ways: who it favors, how fast it resolves things, and what it costs to use. Without one, the fallback is a lawsuit asking a judge to decide the business cannot go on, which is slow, expensive, and not really a tiebreaker at all. This is general information, not legal advice for a specific agreement; a lawyer in the owners' state should read the clause before it is signed.

Six mechanisms, and who each one favors

A deadlock clause answers two separate questions: what happens to the decision that is stuck, and what happens to the partnership if the owners keep getting stuck. The first six rows below are decision-level fixes; the last two are structural, for when the owners decide they cannot keep working together at all.

Deadlock mechanisms side by side

Mechanism How it works Who it tends to favor Main risk
Casting vote to a third person A named mediator, independent director, or senior employee gets a tie-breaking vote on specified matters only Whichever owner picked the tiebreaker, or neither if chosen jointly The tiebreaker is hard to find and harder to agree on later, after a dispute has already started
Rotating chair or alternating authority Each owner holds final say over named areas (one runs operations, the other finance) or the deciding vote alternates by year or by matter Whoever gets the areas that actually generate the disputes Easy to draft badly: if the areas overlap, the deadlock just moves to the boundary
Cooling-off then mediation A fixed delay (say, 10 business days) before either owner may force the next step, then non-binding mediation under a clause like the one in the agreement itself Neither; it buys time and a neutral read on the dispute before anything is forced Resolves the mood, not always the question; some deadlocks are not about communication
Shotgun (buy-sell at a named price) Either owner may offer to buy the other out at a stated price; the other must sell at that price or buy the offering owner out at the same price The owner with more cash or better financing, since the other side may be forced to buy on short notice A partner with less liquidity can be bought out cheap by a partner who can borrow faster
Texas shoot-out (sealed-bid auction) Each owner submits a sealed bid for the whole business to a neutral third party; the higher bid wins and must buy the other out at that price The owner who values the business more, since the mechanism is designed to find the true price rather than let one side set it Still needs financing lined up fast, and a bidder who guesses wrong overpays
Put/call option One owner (often the one who did not start the business) has the right, not the obligation, to sell to or buy from the other at a pre-agreed formula Whoever holds the option, since using it is optional for them and not for the other side An option that sits unused for years can go stale if the business's value has moved a long way from the formula
Forced sale of the whole business If the deadlock is not resolved by a set date, the owners must jointly market and sell the business to a third party and split the proceeds Neither owner over the other, but both lose the business if a buyer cannot be found at a fair price The slowest and most disruptive option, and the one most likely to sell at a discount under time pressure
Dissolution and wind-up The owners agree the partnership dissolves and is wound up under the default rules, assets sold, creditors paid, and the rest split Neither; it liquidates rather than transfers the business, and usually destroys the most value Covered in full in how to dissolve a business partnership

The shotgun clause is the one worth a specific warning. It looks even-handed: either owner can name a price, and the other owner either buys at that price or sells at it. In practice it favors whichever owner can raise cash on short notice, because the other owner may be forced into a sale (or a purchase) they cannot really afford on the clock the clause sets. An owner who put in the money rather than the sweat, or who has outside wealth to draw on, holds the stronger hand under a shotgun even in a partnership that started as equals. The Texas shoot-out variant, where both sides bid blind to a third party, removes some of that asymmetry because neither side sees the other's number first, but it does not remove the financing problem.

What a court does without a deadlock clause

A 50/50 owner stuck with a partner who will not agree to anything has one statutory option left: ask a court to dissolve the partnership. Under section 801(5) of the Uniform Partnership Act (1997), a partner may apply for judicial dissolution on a finding that the partnership's economic purpose is likely to be unreasonably frustrated, that the other partner's conduct makes it not reasonably practicable to carry on the business with that partner, or more broadly that it is not reasonably practicable to carry on the business in conformity with the agreement. Courts have read "not reasonably practicable" narrowly in some states and more sympathetically in others; the grounds that actually apply, and how each state's courts have used them, are compared state by state in the reference table.

Litigation is the backstop, not the plan. It takes months at the fastest and often more than a year, it is expensive on both sides, and the remedy a court orders is not always a clean buyout; some states' courts will order dissolution and a forced sale rather than let one owner buy the other out, which can cost both owners far more than a drafted shotgun or put/call ever would. An owner who has reached this point without an exit clause already in the agreement should read writing a partnership exit clause before you sign and mediation vs arbitration for a business partner dispute before filing anything, since a faster private process is usually on the table even after the relationship has broken down.

Two clauses to start from

Escalation clause: cooling off, then mediation, then a named tiebreaker 
Deadlock. If the Partners are unable to agree on any matter requiring their mutual consent under this Agreement (a "Deadlock"), either Partner may deliver written notice of the Deadlock to the other. For ten (10) business days following that notice, neither Partner shall take any action inconsistent with the status quo ante with respect to the matter in Deadlock. If the Deadlock is not resolved within that period, the Partners shall submit the matter to non-binding mediation before a mediator agreed by the Partners or, absent agreement within five (5) business days, appointed under the commercial mediation procedures of [the American Arbitration Association / a named provider]. If the Deadlock remains unresolved fifteen (15) business days after mediation concludes, the matter shall be decided by [Name], acting as an independent tiebreaker, whose decision shall be final and binding on the Partners as to that matter only.

Name a real tiebreaker (or a method for choosing one) now, while the partners agree on everything, not after a dispute makes the choice itself contested. Limit the tiebreaker's power to the categories of decision named in the agreement; a tiebreaker with unlimited authority is a third owner in substance.

Shotgun clause with a response period 
Buy-Sell Offer. Either Partner (the "Offeror") may at any time deliver to the other Partner (the "Offeree") a written notice (an "Offer Notice") stating a single cash price per percentage interest in the Partnership (the "Offer Price") at which the Offeror is willing either to purchase the Offeree's entire interest or to sell the Offeror's entire interest, at the Offeree's election. Within thirty (30) days after receiving the Offer Notice, the Offeree shall elect, by written notice to the Offeror, either (a) to sell the Offeree's entire interest to the Offeror at the Offer Price, or (b) to purchase the Offeror's entire interest at the Offer Price. If the Offeree does not respond within thirty (30) days, the Offeree is deemed to have elected to sell under clause (a). The closing of the elected transaction shall occur within sixty (60) days after the election, on terms otherwise consistent with Section [__] (Buyout Terms) of this Agreement.

The response and closing windows are what make a shotgun fair or unfair in practice. Thirty days to decide and sixty to close is workable for a business a bank will finance quickly; a partner who knows financing will be slow should negotiate longer windows before signing, not after being served an Offer Notice.