§ 7-64-703 — Dissociated partner's liability to other persons

(1) A partner's
dissociation does not of itself discharge the partner's liability for a partnership
obligation incurred before dissociation. A dissociated partner is not liable for a
partnership obligation incurred after dissociation, except as otherwise provided in
subsection (2) of this section.

(2) A partner who dissociates without resulting in a dissolution and winding
up of the partnership business is liable as a partner to the other party in a
transaction entered into by the partnership, or a surviving partnership under part 2
of article 90 of this title, within two years after the partner's dissociation, only if the
partnership obligation arising from such transaction is one for which the partner
would have been liable under section 7-64-306 had such partner not dissociated
and, at the time of entering into the transaction, the other party:

(a) Substantially relied on a reasonable belief that the dissociated partner
was then a partner; and

(b) Did not have notice of the partner's dissociation.

(3) By agreement with the partnership creditor and the partners continuing
the business, a dissociated partner may be released from liability for a partnership
obligation.

(4) A dissociated partner is released from liability for a partnership
obligation if a partnership creditor, with notice of the partner's dissociation but
without the partner's consent, agrees to a material alteration in the nature or time
of payment of a partnership obligation.

Legislative History

Source: L. 97: Entire article added, p. 890, � 1, effective January 1, 1998. L. 2003: IP(2) amended, p. 2253, � 158, effective July 1, 2004.