TITLE 7
Corporations, Associations, and Partnerships

CHAPTER 7-12
Partnerships

SECTION 7-12-27


§ 7-12-27 Partner by estoppel.

(a) When a person, by words spoken or written or by conduct, represents him or herself, or consents to another representing him or her to any one, as a partner in an existing partnership or with one or more persons not actual partners, he or she is liable to any person to whom the representation has been made, who has, on the faith of the representation, given credit to the actual or apparent partnership, and if he or she has made a representation or consented to its being made in a public manner he or she is liable to the person, whether the representation has or has not been made or communicated to the person giving credit by or with the knowledge of the apparent partner making the representation or consenting to its being made.

(1) When a partnership liability results, he or she is liable as though he or she were an actual member of the partnership.

(2) When no partnership liability results, he or she is liable jointly with the other persons, if any, so consenting to the contract or representation as to incur liability, otherwise separately.

(b) When a person is represented to be a partner in an existing partnership, or with one or more persons not actual partners, he or she is an agent of the persons consenting to the representation to bind them to the same extent and in the same manner as though he or she were a partner in fact, with respect to persons who rely on the representation. Where all the members of the existing partnership consent to the representation, a partnership act or obligation results; but in all other cases it is the joint act or obligation of the person acting and the persons consenting to the representation.

History of Section.
(R.P.L. 1957, ch. 74, § 16.)