Alabama § 10A-8A-7.02 - Power to Bind and Liability of Person Dissociated as a Partner.

§ 10A-8A-7.02. Power to Bind and Liability of Person Dissociated as a Partner.

(a) For one year after a person dissociates as a partner without resulting in a dissolution and winding up of the partnership business or not for profit activity, the partnership, including a surviving partnership or other surviving entity under Article 9 of this chapter and Article 8 of Chapter 1, is bound by an act of the person dissociated as a partner which would have bound the partnership under Section 10A-8A-3.01 before dissociation only if at the time of entering into the transaction the other party:

(1) reasonably believed that the person dissociated as a partner was then a partner and reasonably relied on such belief in entering into the transaction;

(2) did not have notice of the person’s dissociation as a partner; and

(3) is not deemed to have had knowledge or notice under Section 10A-8A-1.03.

(b) A person dissociated as a partner is liable to the partnership for any damage caused to the partnership arising from an obligation incurred by the person dissociated as a partner after dissociation for which the partnership is liable under subsection (a).