A.__Reasonably believed that the dissociated partner was then a partner;

B.__Did not have notice of the partner's dissociation; and

C.__Is not deemed to have had notice under section 1074, subsection 2.

3.__Released from liability for partnership obligation by agreement.__By agreement with the partnership creditor and the partners continuing the business, a dissociated partner may be released from liability for a partnership obligation.

4.__Released from liability for partnership obligation because of material alteration.__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.

Comment

(This is Section 703 of the Uniform Partnership Act (1997).)

Section 703(a) is based on UPA Section 36(1) and continues the basic rule that the departure of a partner does not of itself discharge the partner's liability to third parties for any partnership obligation incurred before dissociation. The word "obligation" is used instead of "liability" and is intended to include broadly both tort and contract liability incurred before dissociation. The second sentence states affirmatively that a dissociating partner is not liable for any partnership obligation incurred after dissociation except as expressly provided in subsection (b).

Section 703(b) is new and deals with the problem of protecting third parties who extend credit to the partnership after a partner's dissociation, believing that he is still a partner. It provides that the dissociated partner remains liable as a partner for transactions entered into by the partnership