Dissociation and Dissolution

Question 1

Continuation Clauses in the PA

Answer 1

If the partnership agreement provides for the distribution of the partnership property, the rights of the partners are governed by the partnership agreement rather than by the UPA.

Question 2

Liability of Incoming Partners

Answer 2

Incoming partners are not personally liable for the debts of the existing partnership.

Question 3

Liability of Withdrawing Parteners

Answer 3

A dissolution operates only with respect to future transactions; as to all past transactions, the partnership continues until all pre-existing matters are terminated.

The dissolution itself does not discharge the existing liability of any partner. There needs to be consent from a creditor to release a withdrawing partner from liability.

Question 4

Dissolution Duties

Answer 4

Upon dissolution, the partners’ duties are to settle the relationships with each other and any business with third parties.

Question 5

Wrongful Dissolution Remedies

Answer 5

When dissolution is caused by the wrongful act of a partner, the innocent partners have an election of remedies. They may wind up the partnership business and seek damages from the wrongful partner; continue the business in the same name, either by themselves or jointly with others, or, continue the business and seek damages.