Question

Ann Grand, a general partner, retired. The partnership held a testimonial dinner for her and invited 10 of its largest customers. A week later a notice was placed in various trade journals indicating that Grand had retired and was no longer associated with the partnership in any capacity. After the appropriate public notice of Grand’s retirement, which of the following best describes her legal status?

A. The release of Grand by the remaining partners and the assumption of all past and future debts of the partnership by them via a hold-harmless clause constitutes a novation.
B. Grand has the apparent authority to bind the partnership in contracts she makes with persons unaware of her retirement who have previously dealt with the partnership.
C. Grand has no liability to past creditors upon her retirement from the partnership if they all have been informed of her withdrawal and her release from liability, and if they do not object within 60 days.
D. Grand has the legal status of a limited partner for the 3 years it takes to pay her the balance of the purchase price of her partnership interest.

Answer 1

B. Grand has the apparent authority to bind the partnership in contracts she makes with persons unaware of her retirement who have previously dealt with the partnership.

Step-by-step explanation:

After the appropriate public notice of Grand’s retirement, it now has the apparent authority to bind the partnership in contracts she makes with persons unaware of her retirement who have previously dealt with the partnership because a notice has been placed in various trade journals indicating that Grand had retired and was no longer associated with the partnership in any capacity.