PARRIS N. GLENDENING, Governor

Ch. 654

TITLE, IS BOUND BY AN ACT OF THE DISSOCIATED PARTNER WHICH WOULD HAVE
BOUND THE PARTNERSHIP UNDER § 9-301 OF THIS TITLE BEFORE DISSOCIATION
ONLY IF AT THE TIME OF ENTERING INTO THE TRANSACTION THE OTHER PARTY:

(1)     REASONABLY BELIEVED THAT THE DISSOCIATED PARTNER WAS
THEN A PARTNER;

(2)     DID NOT HAVE NOTICE OF THE PARTNER'S DISSOCIATION; AND

(3)     IS NOT DEEMED TO HAVE HAD KNOWLEDGE UNDER § 9-303(D) OF
THIS TITLE OR NOTICE UNDER § 9-704(C) OF THIS SUBTITLE.

(B) A DISSOCIATED PARTNER IS LIABLE TO THE PARTNERSHIP FOR ANY
DAMAGE CAUSED TO THE PARTNERSHIP ARISING FROM AN OBLIGATION INCURRED
BY THE DISSOCIATED PARTNER AFTER DISSOCIATION FOR WHICH THE
PARTNERSHIP IS LIABLE UNDER SUBSECTION (A) OF THIS SECTION.

9-703. DISSOCIATED PARTNER'S LIABILITY TO OTHER PERSONS.

(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 UNDER SUBTITLE 9 OF THIS TITLE, WITHIN 2 YEARS
AFTER THE PARTNER'S DISSOCIATION, ONLY IF THE OBLIGATION IS ONE FOR WHICH
THE PARTNER IS LIABLE UNDER § 9-306 OF THIS TITLE AND AT THE TIME OF
ENTERING INTO THE TRANSACTION THE OTHER PARTY;

(1)     REASONABLY BELIEVED THAT THE DISSOCIATED PARTNER WAS
THEN A PARTNER;

(2)     DID NOT HAVE NOTICE OF THE PARTNER'S DISSOCIATION; AND

(3)     IS NOT DEEMED TO HAVE HAD KNOWLEDGE UNDER § 9-303(E) OF
THIS TITLE OR NOTICE UNDER § 9-704(C) OF THIS SUBTITLE

(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.

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