7.__Personal or legal representative.__This section applies to a person winding up the partnership business as the personal or legal representative of the last surviving partner as if the person were a partner.

Comment

(This is Section 404 of the Uniform Partnership Act (1997).)

1. Section 404 is new. The title, "General Standards of Partner's Conduct," is drawn from RMBCA Section 8.30. Section 404 is both comprehensive and exclusive. In that regard, it is structurally different from the UPA which touches only sparingly on a partner's duty of loyalty and leaves any further development of the fiduciary duties of partners to the common law of agency. Compare UPA Sections 4(3) and 21.

Section 404 begins by stating that the only fiduciary duties a partner owes to the partnership and the other partners are the duties of loyalty and care set forth in subsections (b) and (c) of the Act. Those duties may not be waived or eliminated in the partnership agreement, but the agreement may identify activities and determine standards for measuring performance of the duties, if not manifestly unreasonable. See Sections 103(b)(3)(5).

Section 404 continues the term "fiduciary" from UPA Section 21, which is entitled "Partner Accountable as a Fiduciary." Arguably, the term "fiduciary" is inappropriate when used to describe the duties of a partner because a partner may legitimately pursue self-interest (see Section 404(e)) and not solely the interest of the partnership and the other partners, as must a true trustee. Nevertheless, partners have long been characterized as fiduciaries. See, e.g., Meinhard v. Salmon, 249 N.Y. 458, 463, 164 N.E. 545, 546 (1928) (Cardozo, J.). Indeed, the law of partnership reflects the broader law of principal and agent, under which every agent is a fiduciary. See Restatement (Second) of Agency § 13 (1957).

2. Section 404(b) provides three specific rules that comprise a partner's duty of loyalty. Those rules are exclusive and encompass the entire duty of loyalty.

Subsection (b)(l) is based on UPA Section 21(1) and continues the rule that partnership property usurped by a partner, including the misappropriation of a partnership opportunity, is held in trust for the partnership. The express