Liability of partners:
A) Under contract law:
- Liability is joint only (collectively);
- The creditor has only one right of action (except in NSW, where liability is now joint and several).
B) Under the law of torts:
- Liability is joint (collectively) and several (individual);
- Liability of co-partners only arises:
-Where the act or omission was in the ordinary course of the business of the firm; or
-It was with the authority of the co-partners.
C) Holding Out:
- A person who holds themselves out as a partner by their words or conduct may become liable as an ‘apparent partner’.
D) Retiring partners:
- Remain liable for debts incurred before retirement unless the creditors and other partners agree otherwise;
- May be liable for debts incurred by the partnership after retirement if they have not taken steps to notify former and new customers of their retirement.