1830 & 1831 on grounds of dissolution:

1. Not in contravention
a. Termination of a specified term
b. Express will of any partner of at will in good faith
c. Express will of all partners of a specified term
d. Expulsion done accdg to power conferred
2. In contravention
3. By order of law
a. Unlawful
b. Loss of a specified thing
c. Death
d. Insolvency
e. Civil interdiction
4. Judicial decree *(1831)
a. Insanity
b. Incapacity to perform obligation
c. Conduct which affects the partnership prejudicially
d. Willful or persistent breach
e. Carried on at a loss
f. Other equitable circumstances

CARRIED ON AT A LOSS INSOLVENCY

Potential or expectant loss only Actual loss
Must be proven in court Needs no judicial decree as it can easily be seen
from financial statements or books of account the
loss sustained

1832 – effect of dissolution on authority of a partner

GEN: his power to bind co-partners and 3rd persons is terminated
XPNS:
As to partners (1833) As to 3rd persons (1834)
1. When done in relation to the winding up When done in relation to the winding up affairs
affairs
2. To complete and unfinished contract or To complete and unfinished contract or
transaction entered into prior to the transaction entered into prior to the dissolution
dissolution
3. When entered into AFTER DISSOLUTION by When the 3rd person has –
a partner acting in behalf of the P does not 1. Extended credit to the partnership prior
have knowledge or notice of the act which and does not have knowledge of the fact
caused the dissolution or of the death or of dissolution
insolvency 2. Not extended credit but has knowledge of
its existence prior to dissolution and did
not know of the fact of dissolution by
reason that it was not publicized or
advertised in a newspaper of gen
circulation in the place of business of the
partnership firm
1835 – as to EXISTING LIABILITY
GEN: does NOT discharge partners of any existing liability
XPN: there is an agreement express of implied between the partner discharged, partnership creditors and the
co-partners.
And individual properties of a deceased partner is liable of any liabilities of the partnership accruing when he was still A
PARTNER, without prejudice to the satisfaction of his separate debts

HOW TO EXTINGUISH AN OBLIGATION

1. Payment
2. Loss
3. Remission
4. Merger
5. Condonation
6. Novation

Novation – mode of extinguishing an obligation by the change of the obligation of the parties either by changing the
object of the contract or rights of the parties or change in the parties.
It could either be:
1. Real Novation – change in the object of the contract
2. Personal Novation – change in the person of debtor/creditor
For there to be a VALID NOVATION, consent of all the debtors and creditors, even the debtor sought to be relieved must
express conformity.

WINDING UP
1836 – provided that any partner, legal representative or assignee, upon causes shown, may obtain winding up by the
court.

Who has the right to WIND UP? Unless otherwise agreed, the partners who have not wrongfully dissolved the
partnership or the legal representative of the last surviving partner, not insolvent.

What happens? The settlement of all the obligations of the partnership

2 MANNERS OF WINDING UP:

1. Judicial
2. Extrajudicial

1837 –

1838 –