Multiple choice

A and B are partners in a partnership firm. A introduced C, a former partner, as his partner to D. C remained silent at that moment, but later on informed D that he is actually a former partner of the firm. C had also issued public notice in the year of his retirement from the partnership firm. D, a trader supplied 500 refrigerators to the firm on credit. The credit period expired and D did not get the price of his supplies. D filed a suit against A & C for the recovery of price. In light of the above circumstances answer which of the following is correct

  1. C is liable for the price to D

  2. C is liable for the price to D, irrespective of the fact, whether C remained silent or not

  3. C is not liable for the price to D

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

C is not liable to D because C had properly retired from the firm and issued a public notice of retirement. Under partnership law, a retiring partner who gives public notice is protected from liability for subsequent firm debts. A's representation (holding C out as partner) doesn't override C's proper retirement procedure. D should have verified C's status before extending credit.

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