Question

Four partners formed a partnership. Their partnership agreement contained the following sections, among others:

- Section 1: A new partner may be admitted to the partnership if at least 75% of the current partners vote to admit the new partner.
- Section 2: Ordinary negligence will be considered to be a breach of a partner's duty of care to the partnership.

Which of these sections are valid under RUPA?

A. Both sections are valid.

B. Both sections are invalid.

C. Section 1 is valid, but Section 2 is invalid.

D. Section 1 is invalid, but Section 2 is valid.

Answer 1

Section 1 of the partnership agreement is valid, while Section 2 is invalid under RUPA.

Step-by-step explanation:

Under the Revised Uniform Partnership Act (RUPA), Section 1 of the partnership agreement is valid. This section allows for the admission of a new partner if at least 75% of the current partners vote to admit the new partner. This provision is in line with RUPA's requirement for partner admission.

However, Section 2 of the partnership agreement is invalid under RUPA. RUPA does not recognize ordinary negligence as a breach of a partner's duty of care to the partnership. Instead, RUPA imposes a duty of loyalty and a duty of care on partners, requiring them to act in the best interest of the partnership and with a certain standard of care and skill.