Bar Exam (Next Generation) Quiz: General Partner Liability Rupa 1997
12 questions · exam conditions
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General Partner Liability Rupa 1997Question 1 of 12

A, B, and C are equal general partners in a landscaping partnership. B, acting with actual authority, borrowed $300,000 from First Bank, in the partnership's name for a new truck. The loan is now in default. The partnership has few assets, and the bank has sued only A. A has ample personal assets. B and C are insolvent. Under the Revised Uniform Partnership Act (1997), maythe bank recover from A?

No, because the bank must first attempt to collect the debt from the partnership's assets before proceeding against any individual partner.
Yes, because A, as a general partner, is jointly and severally liable for the partnership's obligation, so the bank may collect the full amount from A's personal assets.
No, because A is liable only for his one-third share of the debt;the bank must seek the remaining two-thirds from B,and C.
Yes, but only after the bank obtains judgments against B,and C,and shows that those judgments are unsatisfied.
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Bar Exam (Next Generation) Quiz

Bar Exam (Next Generation) Quiz: General Partner Liability Rupa 1997

Practice General Partner Liability Rupa 1997 in Bar Exam (Next Generation) with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on General Partner Liability Rupa 1997, giving you a quick way to practice the rules, question types, and explanations that matter most for Bar Exam (Next Generation).

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

All questions

Question 1

A, B, and C are equal general partners in a landscaping partnership. B, acting with actual authority, borrowed $300,000 from First Bank, in the partnership's name for a new truck. The loan is now in default. The partnership has few assets, and the bank has sued only A. A has ample personal assets. B and C are insolvent. Under the Revised Uniform Partnership Act (1997), maythe bank recover from A?

  1. No, because the bank must first attempt to collect the debt from the partnership's assets before proceeding against any individual partner.
  2. Yes, because A, as a general partner, is jointly and severally liable for the partnership's obligation, so the bank may collect the full amount from A's personal assets. (correct answer)
  3. No, because A is liable only for his one-third share of the debt;the bank must seek the remaining two-thirds from B,and C.
  4. Yes, but only after the bank obtains judgments against B,and C,and shows that those judgments are unsatisfied.
Explanation: Whenever you see a general partner's personal liability for a partnership debt, focus on the nature of the obligation and the creditor's rights. Under RUPA, general partners are jointly and severally liable for partnership obligations. Here, B had actual authority to borrow in the partnership's name, so the debt is a valid partnership obligation. Therefore, the bank may collect the full $300,000 from A's personal assets, despite B and C being insolvent. A's right to seek contribution from B and C later does not limit the bank's right to collect the entire debt from A. The claim that the bank must first exhaust partnership assets is incorrect: RUPA allows a creditor to sue one or more partners directly without first pursuing partnership property. The theory that A is liable only for his one-third share confuses internal contribution rights among partners with the external liability each partner owes to the creditor. And the statement that the bank must first get unsatisfied judgments against B and C is also wrong; joint and several liability means the creditor may choose which partner to sue and may collect the full amount from that partner alone. Study tip: separate the creditor's remedy from the partners' internal rights. A creditor can often collect the full debt from any general partner, leaving that partner to pursue contribution from the others.

Question 2

Stone & Stone is a general partnership,and A is one of its general partners. A creditor obtained a $100,000 judgment against the partnership only after suing it in its own name; A was not named as a party. The partnership's assets sold for $30,000, leaving $70,000 unpaid. The creditor now seeks to execute on A's personal residence. Under the Revised Uniform Partnership Act (1997), maythe creditor do so?

  1. Yes, because each general partner is personally liable for the unpaid debts of the partnership,and the judgment against the partnership establishes that liability.
  2. No, because a judgment against the partnership is not a judgment against A;the creditor must first obtain a judgment against A before reaching A's personal assets. (correct answer)
  3. Yes, but only because the partnership's assets have been exhausted; once partnership property is insufficient, partners' personal assets become available to satisfy a partnership judgment.
  4. No, because a general partner's personal residence is exempt from execution unless he signed a personal guaranty of the partnership debt.
Explanation: Whenever you see a question about partnership liability, separate the partnership's liability from each partner's liability. Under the Revised Uniform Partnership Act, a partnership is an entity that can be sued in its own name, and a judgment against the partnership is an asset of the judgment creditor—but it is not automatically a judgment against any individual partner. Here, the creditor sued only the partnership, not A. The $70,000 unpaid balance is a partnership debt, and A is personally liable for partnership debts generally. But that liability must be established in a proceeding where A is a party or otherwise given notice and an opportunity to defend. Because the judgment is against the partnership only, A's personal residence cannot be reached until the creditor obtains a separate judgment against A individually. The fact that partnership assets were exhausted does not change this; insufficient partnership assets may be a condition for collection, but it does not substitute for a judgment against A personally. The answer "Yes, because each general partner is personally liable" confuses substantive liability with procedural enforceability. The answer "Yes, but only because the partnership's assets have been exhausted" similarly skips the required judgment. The answer "No, because a general partner's personal residence is exempt" is wrong: a residence is not automatically exempt from execution absent a homestead exemption or personal guaranty issue. Study tip: on the bar exam, distinguish "personally liable" from "personally bound by a judgment." Liability requires a judgment naming the partner before you can execute on personal assets.

Question 3

B was a general partner in BCD Supply, a plumbing-supply partnership. B withdrew, and C and D continued the partnership. B did not notify any of the partnership's regular suppliersand did not file a statement of dissociation. Six months later, Hall's Hardware, a supplier that had dealt with BCD for years and knew B as a partner, extended $20,000 in new credit to the partnership. Hall's had no notice of B's withdrawal and reasonably believed B was still a partner. The partnership later defaulted. May Hall's recover from B personally?

  1. No, because a dissociated partner is not liable for any partnership obligation incurred after dissociation.
  2. No, because B did not consent to Hall's extension of credit and did not participate in the transaction.
  3. Yes, because Hall's reasonably believed, without notice,that B remained a partner when it extended credit to the continuing partnership. (correct answer)
  4. Yes, but only if Hall's can show that B received a share of the proceeds of the new credit.
Explanation: This question tests a withdrawing partner's liability to third parties. When a partner dissociates, the outgoing partner does not automatically escape obligations to outsiders who dealt with the partnership before. The key issue is notice: if the departing partner fails to give actual notice to regular suppliers or file a statement of dissociation, and a third party reasonably believes the partner is still in the firm, that partner can be personally liable for debts incurred within two years after dissociation. Here, Hall's had known B as a partner for years, was a regular supplier, and had no notice of B's withdrawal. Its credit extension to BCD is exactly the kind of obligation covered: Hall's reasonably believed B remained a partner and relied on that belief. Therefore B is personally liable. The distractor "No, because a dissociated partner is not liable for any partnership obligation incurred after dissociation" is too broad; liability continues for apparent authority. "No, because B did not consent to Hall's extension of credit and did not participate" misses the point—liability arises from B's failure to give notice, not from consent or participation. "Yes, but only if B received a share of the proceeds" adds a condition the law does not require; liability is based on reasonable reliance, not profit-sharing. Remember the pattern: dissociation + no notice + reasonable third-party reliance = continuing apparent liability for about two years. When you see a withdrawing partner and an old supplier, focus on notice and reasonable belief.

Question 4

A and B are general partners in a graphic design partnership. Without A's knowledge or consent, B borrowed $25,000 from City Bank in his own name, for the purpose of buying a personal sailboat. B signed only his own name; he did not describe himself as a partner or purport to act for the partnership. City Bank knew B was a general partner in A&B Design. B defaulted. City Bank now seeks to collect from A. Under the Revised Uniform Partnership Act (1997), may City Bank recover from A?

  1. No, because the debt was B's personal obligation, not an obligation of the partnership, so A is not liable merely because B is A's partner. (correct answer)
  2. Yes, because City Bank knew B was a general partner and reasonably assumed that B's obligation was connected to the partnership.
  3. Yes, because B is a general partner and all general partners are jointly and severally liable for obligations incurred by any partner while the partnership relationship exists.
  4. No, because A is liable only for B's obligations incurred with A's actual authority, and B lacked actual authority to borrow for a personal purpose.
Explanation: Whenever a question asks whether one partner can be liable for another partner's debt, start by asking: was this debt incurred in the ordinary course of partnership business, or at least with apparent authority? Under RUPA, a partnership is bound only by a partner's act that is apparently for carrying on partnership business in the ordinary course, or is actually authorized. Here, B borrowed in his own name for a personal sailboat, signed only himself, and did not purport to act for the partnership. Even though City Bank knew B was a partner, the loan's purpose was personal, not partnership business. Therefore, the debt is B's personal obligation, and A is not liable merely by being B's partner. The choice saying City Bank could recover because it knew B was a partner and reasonably assumed the obligation was connected to the partnership is incorrect: a creditor's knowledge of status alone does not create a partnership debt. The creditor must reasonably believe the partner was acting in partnership business, and a personal sailboat loan defeats that. The choice saying all general partners are jointly and severally liable for obligations incurred by any partner while the partnership exists is too broad: that rule applies only to partnership obligations, not personal debts. The choice saying A is liable only for obligations incurred with actual authority is also wrong — RUPA imposes liability for apparent authority and ordinary-course acts too, but those do not save City Bank here. Study tip: on partnership questions, separate "personal debt" from "partnership debt." Look for whether the partner purported to act for the partnership and whether the transaction furthered partnership business.

Question 5

D agreed to become a general partner in an existing bakery partnership after the partnership had signed a five-year lease with a commercial landlord. D made a capital contribution but did not sign or personally guarantee the lease. Two years later, with several lease payments unpaid, the landlord obtained a judgment against the partnership and then sought to satisfy it from D's personal bank account. Under the Revised Uniform Partnership Act (1997), maythe landlord reach D's personal assets for this pre-admission lease obligation?

  1. Yes, because all general partners are jointly and severally liable for every partnership obligation, whether the obligation arose before or after admission.
  2. Yes, but only up to the amount of D's capital contribution, because that is the maximum exposure of a newly admitted partner.
  3. No, because D merely joined an existing partnership;a person becomes liable for preexisting debts only if he expressly assumes them in writing.
  4. No, because D's liability for obligations arising before his admission may be satisfied only from partnership property, not from his personal assets. (correct answer)
Explanation: When you see a question about a partner's liability for a debt, your first move is to check the timing: did the obligation arise before or after the partner was admitted? This is the heart of RUPA § 306. Here, the lease was signed before D joined, and D never signed or guaranteed it, so the question is purely about pre-admission obligations. Under RUPA, a person admitted into an existing partnership is not personally liable for any partnership obligation incurred before admission. That obligation can be satisfied only from partnership property. Since the landlord's judgment is against the partnership, it cannot reach D's personal bank account for this pre-admission lease. Now look at the wrong answers. The choice claiming all general partners are jointly and severally liable for every obligation, regardless of when it arose, ignores RUPA's explicit carve-out for pre-admission debts — that broad liability applies only to obligations incurred after admission or those the partner personally assumed. The choice saying D is liable up to his capital contribution is a trap: capital contribution is not a measure of personal exposure here; the rule is that personal assets are completely shielded for pre-existing debts. Finally, the choice stating a person becomes liable only if he expressly assumes the debt in writing misstates the rule — RUPA does not require a written assumption to create liability (though it may be wise), and the default is no personal liability at all unless the partner assumes the obligation. For your exam, remember the two-step check: (1) when did the obligation arise, and (2) did the partner personally guarantee it? If it arose before admission and there's no personal guarantee, only partnership property is reachable.

Question 6

B was a general partner in ABC Manufacturing, a partnership that owed $400,000 on a loan from National Bank. B later withdrew from the partnership in accordance with the partnership agreement, and the remaining partners continued the business. National Bank was aware of B's withdrawal but did not release B from the existing loan. After B's withdrawal, ABC defaulted on the loan. May National Bank recover the unpaid balance from B's personal assets?

  1. No, because B's withdrawal terminated his status as a partner and therefore his liability on partnership obligations arising after withdrawal.
  2. No, because National Bank knew of B's withdrawal before the default and thus cannot claim that B remained a partner.
  3. Yes, because B's liability for a partnership obligation incurred before his withdrawal is not discharged by withdrawal unless the creditor agreed to release him. (correct answer)
  4. Yes, but only out of B's share of partnership property at withdrawal, because withdrawal converts his liability to third parties into a capital account claim.
Explanation: Whenever you see a partnership withdrawal question, the critical inquiry is whether the obligation arose before or after the withdrawal. Here, the loan existed while B was a partner, so you're dealing with pre-withdrawal liability. Under the RUPA, a withdrawing partner remains personally liable for partnership obligations incurred while they were a partner, and that liability is not discharged by withdrawal alone. The only way to shed it is if the creditor, National Bank, expressly agreed to release B—which it did not. Thus, National Bank can recover the full unpaid balance from B's personal assets. The choice claiming "B's withdrawal terminated his status" is incorrect because that logic applies only to obligations arising after withdrawal; the loan was incurred before. The choice claiming "National Bank knew of B's withdrawal" is also wrong—knowledge merely affects liability for future obligations, not pre-existing debts without consent. Finally, the choice limiting recovery to "B's share of partnership property at withdrawal" confuses an internal capital account with external creditor rights—third-party creditors can reach personal assets for pre-withdrawal debts. For the exam, remember the trap: when a partner withdraws, don't assume they escape all liability. Ask "When was the debt created?" If before withdrawal, the only escape hatch is a creditor's novation. If after, check for apparent authority.

Question 7

A,and B formed a general partnership to own commercial real estate. Their written partnership agreement states that no partner shall be personally liable for any partnership obligation,and that all creditors shall look only to partnership assets. B, acting with actual authority, borrowed $100,000 from Trade Bank,in the partnership's name to repair a building. Trade Bank neither knew of nor agreed to the partnership agreement's limitation. The partnership defaulted. May Trade Bank recover from A's personal assets?

  1. No, because the partnership agreement is a binding contract between A,and B,and expressly eliminates personal liability to creditors.
  2. Yes, because A,and B's private agreement cannot alter a partner's liability to a creditor who did not agree to that limitation. (correct answer)
  3. No, because B had actual authority to borrow, so only B is personally liable for the debt;A's liability was excluded by the partnership agreement.
  4. Yes, but only to the extent of A's share of partnership profits, because the partnership agreement can allocate external liability ratably among partners.
Explanation: When you see a question like this, focus on the key distinction between internal partnership agreements and external liability to third parties. Partners may allocate rights and duties among themselves, but they cannot, by agreement, strip a creditor of rights unless the creditor agrees. Here, B had actual authority to borrow in the partnership's name, so the partnership incurred a valid obligation. A general partnership does not shield partners from personal liability merely because the partnership agreement says so. Under partnership law, every general partner is personally liable for partnership debts and obligations. The agreement between A and B stating that creditors shall look only to partnership assets is an internal arrangement; it may give A a claim against B for contribution, but it cannot bind Trade Bank, which neither knew of nor consented to that limitation. Therefore, Trade Bank may recover from A's personal assets. The first wrong answer assumes a private contract can bind a nonparty creditor. The third wrong answer claims only B is liable because B had actual authority—this confuses authority to bind the partnership with elimination of A's statutory liability. The fourth wrong answer says recovery is limited to A's share of profits, which mistakenly treats an internal profit-sharing or liability-allocation agreement as a cap on external creditor recovery. Remember: in general partnerships, personal liability is the default, and only creditors who agree to a limitation can be bound by it.

Question 8

A,and B are general partners in a restaurant partnership. When the partnership borrowed $200,000 from Local Bank to renovate, all parties signed a loan agreement containing this clause: Local Bank agrees that each partner's liability on this loan is limited to,and may be enforced only against,the partnership's assets. No personal judgment shall be sought against either partner. The restaurant later defaulted with $150,000 unpaid. Local Bank now sues A personally for the deficiency. Under the Revised Uniform Partnership Act (1997), may Local Bank recover from A?

  1. Yes, because the statute makes all general partners jointly and severally liable,and partnership agreement cannot override that liability.
  2. Yes, because A signed the loan agreement,and thus agreed to the partnership debt as a general partner.
  3. No, because the bank expressly agreed that partner liability would be enforced only against partnership assets;that agreement is binding,and bars personal recovery from A. (correct answer)
  4. No, because general partners are liable only to the extent of their capital contributions when the partnership has executed a written loan agreement.
Explanation: When you see a question about a partner's personal liability to a creditor, remember that the Revised Uniform Partnership Act (RUPA) sets default rules—but these are defaults, not mandatory provisions. The real issue is whether the creditor contractually waived its right to pursue personal assets. Here, the bank signed a loan agreement expressly stating that each partner's liability is limited to partnership assets and that no personal judgment shall be sought. That clause is a binding contractual waiver. While RUPA § 306 generally makes partners jointly and severally liable, that liability is subject to agreement between the partners and the creditor. Because the bank agreed to the limitation, it cannot later sue A personally. Now consider the wrong choices. The first says the statute makes partners liable and cannot be overridden—that's false; RUPA explicitly allows variation by agreement, and here the agreement is with the creditor itself. The second says A signed the loan agreement, so he agreed to the debt—but signing also binds the bank to the same terms, including the limitation clause. The fourth says partners are liable only to capital contributions when a written loan agreement exists—that misstates the law; general partners are personally liable beyond contributions unless an agreement limits liability. The loan agreement here does limit it, but the reasoning in that choice is wrong. Study tip: Always look for an express contractual limitation when a creditor sues a partner. A clause like "no personal judgment" is a complete defense. Also, distinguish between the partnership agreement (internal) and a creditor contract—a creditor can waive its own rights.

Question 9

A is a general partner in a venture capital partnership, but he is a passive investor who takes no part in management. The partnership agreement designates B as the sole managing partner with exclusive authority to borrow. B, acting with actual authority, obtained a $1 million line of credit from Mega Bank for the partnership. Mega Bank had never heard of A when it extended the credit and did not rely on A's participation or wealth. The partnership defaulted. Under the Revised Uniform Partnership Act (1997), may Mega Bank recover from A personally?

  1. Yes, because A is a general partner; all general partners are jointly and severally liable for partnership obligations incurred by a partner with authority, regardless of the creditor's knowledge of A or A's management role. (correct answer)
  2. No, because A had no management authorityand the partnership agreement made B the only partner authorized to deal with banks.
  3. No, because Mega Bank extended credit without knowledge that A was a partnerand without relying on his credit;a creditor can recover only from partners on whose participation it relied.
  4. Yes, but only to the extent of A's capital contribution, because A's passive status limits his personal exposure to his investment in the partnership.
Explanation: When you see a question about partner liability under the Revised Uniform Partnership Act, start by separating internal management rules from external obligations to third parties. The partnership agreement may allocate authority among partners, but that allocation generally does not limit a general partner's personal liability for partnership debts. Here, A is a general partner, and B incurred the loan with actual authority on behalf of the partnership. Under RUPA, all general partners are jointly and severally liable for partnership obligations, regardless of whether they participate in management. It does not matter that Mega Bank had never heard of A or did not rely on his wealth. The obligation was incurred by the partnership through an authorized partner, so A is personally liable. The answer claiming A escapes liability because B was the sole managing partner confuses internal authority with external creditor rights. A's lack of management power may affect his rights among partners, but it does not erase his liability to Mega Bank. Similarly, the answer saying the bank cannot recover without knowledge of A or reliance on his credit is wrong: general partner liability does not require creditor reliance. Finally, the answer limiting A's exposure to his capital contribution describes limited partners or LLC members, not general partners, who have unlimited personal liability. Study tip: on partnership questions, ask "is this a general partner?" If yes, outside creditors can recover from that partner personally—even if the partner was passive or the creditor never knew they existed.

Question 10

Ravi and Sofia are the only general partners in Bloom Catering, a partnership governed by the Revised Uniform Partnership Act. Their written partnership agreement designates Ravi as managing partner, denies Sofia any management role, and states that neither partner may bind the the other or be personally liable for the other's torts. While using the partnership van to deliver catering supplies to a partnership event, Ravi negligently runs a red light and injures Nina. Nina obtains a final judgment against Bloom Catering, Ravi, and Sofia based solely on Ravi's negligence. Sofia had no involvement in the accident and did not know Ravi was using the van that night.

Under RUPA, may Sofia be held personally liable on Nina's judgment?

  1. Yes, because RUPA makes all general partners jointly and severally liable for all partnership obligations, including a tort committedby one partner while acting in the ordinary course of partnership business; an internal partnership agreement cannot cut off Sofia's liability to Nina. (correct answer)
  2. No, because a partner is personally liable for a co-partner's tort only if the partner participated in, authorized, or ratified the underlying conduct; passive partners are shielded from vicarious tort liability.
  3. No, because the partnership agreement expressly denies Sofia managerial authorityand she did not commit, authorize, or ratify Ravi's negligent act; only Ravi and the partnership are liable to Nina.
  4. Yes, because general partners are vicariously liable for every tort committed by any partner, even one acting outside the ordinary course of partnership business, and Sofia's profit-share interest makes her liable for Ravi's conduct.
Explanation: When you see a tort by a partner, ask two questions: Was the conduct within the ordinary course of partnership business? Is the party suing a third party? Under the Revised Uniform Partnership Act, a partnership obligation includes a partner's wrongful act committed in the ordinary course of partnership business. Because Ravi was delivering catering supplies for Bloom, his negligence is a partnership obligation. Every general partner is jointly and severally liable for partnership obligations, so Sofia—even with no management role, knowledge, or involvement—is personally liable to Nina. That internal partnership agreement, including the clause denying Sofia a management role and the clause disclaiming liability for the other's torts, is effective only among the partners; it cannot bind or cut off Nina's rights. Thus the answer is the choice recognizing joint and several liability despite the internal agreement. The "participation, authorization, or ratification" choice is wrong because RUPA imposes vicarious liability on general partners; active fault is not required. The "expressly denies Sofia managerial authority" choice is also wrong: the agreement governs internal rights and indemnity, not third-party claims. The "every tort committed by any partner, even one outside the ordinary course" choice overstates—liability attaches to partnership obligations, primarily acts in the ordinary course, not literally every tort; profit sharing alone is not the test. Study tip: distinguish internal rights among partners from external liability to third parties. The agreement controls inside the partnership; RUPA controls outside it. Internal disclaimers do not erase vicarious tort liability.

Question 11

A,and B are the only general partners in a plumbing partnership. One evening, after finishing a plumbing job, B took a partnership-owned van to a bar for personal entertainment, without asking A or mentioning his plans. On the way, B ran a red light,and injured P. P sued A individually. Under the Revised Uniform Partnership Act (1997), is A liable for P's injuries?

  1. Yes, because partners are vicariously liable for torts committed by a co-partner using partnership property.
  2. Yes, because B was a general partner acting with apparent authority when he drove the partnership van.
  3. No, because B was not acting inthe ordinary course of partnership business or with partnership authority, so neither the partnership nor A is liable for B's tort. (correct answer)
  4. No, because a general partner is never personally liable for a co-partner's tort unless he participated in or authorized the tort.
Explanation: Whenever you see a partner's tort claim, start with one question: was the partner acting in the ordinary course of partnership business or with partnership authority? Under RUPA, the partnership is liable for a partner's wrongful act only if that act occurs in the ordinary course of the partnership's business or with the partner's actual authority. B took the van purely for personal entertainment, so he was outside both. Therefore B's tort is not a partnership obligation, and A—though a general partner—is not personally liable for it. The first wrong answer, that partners are vicariously liable for torts committed while using partnership property, misses the key limitation: property use alone is not enough; the tort must occur in the partnership's ordinary business. The second wrong answer, based on apparent authority, also fails: apparent authority applies to dealings with third parties, not to unauthorized personal trips, and B had no appearance of authority for a bar outing. The final wrong answer—that a general partner is never personally liable unless he participated or authorized the tort—is too broad. If B had been acting in the ordinary course, A would be personally liable on the partnership obligation even without participating in the tort. Study tip: distinguish "ordinary course" torts from frolics. A sole driver on a personal detour is a frolic, so the partnership escapes liability.

Question 12

Precision Manufacturingis a general partnership governed by RUPA. Amy and Ben formed the partnership two years ago. Before Carla joined, Precision borrowed $400,000 from First Bank to purchase equipment. Carla later became a general partner, contributing $100,000 cash,which was deposited into Precision's operating accountand used in the business. After Carla joined, Precision borrowed an additional $200,000 from First Bank under a separate loan agreement. Precision has defaulted on both loans,and First Bank seeks to hold Carla personally liable for both outstanding balances. Carla did not sign either loan agreement or any personal guaranty.

Under RUPA, which of the following best describes Carla's personal liability to First Bank?

  1. Carla is not personally liable on either loan because she never signed either loan agreement or a guaranty; a partner's exposure to a creditor for partnership debts is always limited tothe partner's agreed capital contribution.
  2. Carla is personally liable on the post-admission loan only; a person who joins an existing partnership is not personally liable for obligations incurred before admission,but is personally liable for obligations incurred after becoming a partner. First Bank may still collect the pre-admission debt from the partnership's assets,but not from Carla's personal assets. (correct answer)
  3. Carla is personally liable on both loans because once she became a general partner, she succeeded to all rights and obligations of the partnership; RUPA makes every partner jointly and severally liable for all then-existing and subsequent partnership obligations unless the creditor agrees otherwise.
  4. Carla is personally liable on the pre-admission loan only to the extent of her $100,000 capital contribution,ande she is fully personally liable on the post-admission loan,because her contribution became a partnership asset that partially secured the pre-existing debt.
Explanation: When a partner joins an existing partnership, separate rules govern old vs new debts. Under RUPA, a newly admitted partner is personally liable for obligations incurred after admission, but not for obligations incurred before admission; those pre-admission obligations may be satisfied from partnership property, but the new partner's personal assets are off-limits. Here, Carla did not sign or guarantee the old $400,000 loan, and that obligation predates her admission, so First Bank can collect it only from Precision’s assets—including, as a practical matter, the $100,000 contribution once it became partnership property—but not from Carla personally. The later $200,000 loan was incurred after she became a general partner, so she is fully personally liable, regardless of not signing. That makes the statement describing liability on the post-admission loan only correct. A choice saying no liability on either because no signature ignores that general partner liability arises from status, not paperwork. A choice saying liable on both because she “succeeded to all rights and obligations” overstates RUPA, which specifically shields new partners from pre-admission obligations. A choice saying she is personally liable on the pre-admission loan up to her $100,000 contribution also misstates the rule: the contribution became partnership property, but Carla did not assume a personal debt for old obligations. Tip: for incoming partner liability, ask "was the obligation incurred before or after admission?" Old debts: partnership property only. New debts: personal exposure.