Law · Partnership Law
Arjun, a partner in a general trading partnership, retired from the firm on 1 January. The remaining partners, Bella and Casper, continued the business. On 15 January, Bella entered into a contract with a long-standing supplier, 'Deep Sea Ltd', who had dealt with the firm for three years. On 20 January, Casper entered into a contract with a new supplier, 'Fresh Start Co', who had never heard of the firm before. Arjun did not notify the Registrar or the Gazette, nor did he send notices to existing creditors until 1 February. Which of the following statements correctly describes Arjun's liability for the contracts made in January?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Arjun is liable for both contracts because he failed to provide public notice before the debts were incurred.
- 2Arjun is liable for the contract with Fresh Start Co, but not for the contract with Deep Sea Ltd.
- 3Arjun is liable for the contract with Deep Sea Ltd, but not for the contract with Fresh Start Co.✓
- 4Arjun is not liable for either contract as his liability ceased immediately upon his retirement on 1 January.
Correct answer
Arjun is liable for the contract with Deep Sea Ltd, but not for the contract with Fresh Start Co.
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