Asked by Tiffany Riggs-Kredit on Jun 01, 2024
Verified
Emmy,Shane,and Rusty are partners of the firm Esha Associates.Rusty nonwrongfully dissociates himself from the partnership.Under these circumstances,Rusty will not be liable to the creditors for the liabilities incurred while he was partner only:
A) if all the partners consent to it.
B) if there is an agreement.
C) if there is a court order.
D) by novation.
Nonwrongfully Dissociates
The process by which a partner departs from a partnership according to the terms of the partnership agreement or without violating any legal obligations.
Liability
The state of being legally responsible for something, especially in terms of owing money or being obligated to provide compensation for damage or injury.
Creditors
People or organizations that are creditors to whom debtors or borrowers owe money.
- Absorb the rules that outline the liability of ex-partners for obligations incurred during their association.
Verified Answer
JK
Jenny KleierJun 06, 2024
Final Answer :
D
Explanation :
Dissociated partners remain liable to partnership creditors for partnership liabilities incurred while they were partners;however,a dissociated partner's liability may be eliminated by the process of novation.
Learning Objectives
- Absorb the rules that outline the liability of ex-partners for obligations incurred during their association.