General Partner Liability (RUPA 1997) - Next Generation Bar Exam

1. Under RUPA (1997), what must a partnership creditor ordinarily do before collecting from a partner's personal assets?

   Obtain a judgment against the partnership and the partner, and have execution against the partnership go unsatisfied. Exceptions apply, for example when the partnership is in bankruptcy or the partner agreed to waive exhaustion.

2. Under RUPA (1997), for how long may a dissociated partner remain liable for new transactions with third parties who reasonably believe the person is still a partner?

   Up to two years after dissociation. Filing a statement of dissociation cuts off this exposure 90 days after filing.

3. Under RUPA (1997), what must a partnership reimburse a partner for?

   Payments made and liabilities incurred in the ordinary course of business or to preserve its business or property. A partner who pays a partnership debt is entitled to indemnification from the partnership.

4. A lawyer joins a general partnership law firm in March. A supplier's invoice from February goes unpaid. What exposure does the new partner have for the debt?

   Her capital contribution may be reached, but her personal assets may not. An incoming partner is not personally liable for obligations incurred before admission.

5. Under RUPA (1997), what is a newly admitted partner's personal liability for obligations incurred before admission?

   Only the partner's contribution is at risk; personal assets are not. Incoming partners are personally liable only for obligations incurred after they join.

6. Under RUPA (1997), who is liable as a partner by estoppel?

   A person who represents, or consents to being represented, as a partner, to those who extend credit in reliance. Liability runs only to persons who relied on the representation.

7. Under RUPA (1997), how are partners liable for partnership obligations?

   Jointly and severally. Each partner may be held liable for the full amount of a partnership obligation.

8. What liability does a partner in a limited liability partnership retain despite the shield?

   Liability for the partner's own tortious conduct. The shield protects against vicarious liability, not liability for one's own wrongs.

9. Under RUPA (1997), what is a dissociated partner's liability for obligations incurred before dissociation?

   The partner remains liable for them. Dissociation does not discharge existing liabilities without agreement of the creditor.

10. Under RUPA (1997), when is a partnership liable for a partner's tort?

    When the partner acted in the ordinary course of partnership business or with authority. Liability extends to loss or injury caused by the partner's wrongful act or omission.

11. Under RUPA (1997), what liability shield does a partner in a limited liability partnership have?

    Protection from personal liability for partnership obligations solely by reason of being a partner. The shield covers contract and tort obligations of the partnership.

12. Under RUPA (1997), what liability does a partnership have when a partner misapplies money or property received from a third party?

    The partnership is liable for the loss. This applies whether the partner received the property in the course of business or with apparent authority.

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