29-1063. Dissociated partner's liability to other persons

229 words·~1 min read·/az/title-29/29-1063

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

A. 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 B of this section.

B. 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 pursuant to any merger permitted by law, within two years after the partner's dissociation, only if the partner is liable for the obligation under section 29-1026 and at the time of entering into the transaction the other party:

1. Relied on a reasonable belief that the dissociated partner was then a partner.

2. Did not have notice of the partner's dissociation.

3. Is not deemed to have had knowledge under section 29-1023, subsection E or notice under section 29-1064, subsection C.

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

D. 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.