ACCA Applied Skills · Corporate and Business Law (Global) · Partnerships
Imani retires from a trading partnership with Jorge and Kofi. She tells her regular customers by letter but gives no notice to the public. Later Jorge buys goods in the firm's name from Lumen Ltd, which had dealt with the firm before Imani retired, was never told of her retirement and did not know of it. Which statement is correct?
Imani remains liable to Lumen Ltd. A retired partner continues to be treated as holding out as a partner towards earlier customers who have not been notified of the retirement, so the firm's later contract can still bind her until proper notice is given.
- AImani is not liable, because a retiring partner's liability ends on retirement
- BImani remains liable to Lumen Ltd, because it had no notice of her retirementCorrect
- CImani is liable to all persons, including those who never dealt with the firm
Explanation
A retiring partner stays liable for later acts to persons who dealt with the firm before retirement and have not had notice of it. Lumen Ltd was a prior dealer with no notice, so apparent authority continues. The third option is wrong because persons who never dealt with the firm are only protected where they knew of her as a partner and had no notice, usually addressed by public notice.
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