New Jersey Statutes 42:5-4. Compromise with one partner not to discharge copartners; effect on rights between creditors and copartners
Terms Used In New Jersey Statutes 42:5-4
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
a. Discharge the other copartners;
b. Impair the right of any creditor to proceed at law or in equity against such copartners who have not been discharged for the balance of said partnership debt after the ratable portion of said debtor so released shall have been deducted therefrom.
2. No such compromise or composition shall prevent any member of the partnership not discharged thereby from:
a. Using as a set-off any demand against such creditors which could have been set off had suit been brought against all the individuals composing such firm;
b. Availing himself of any defense at law or in equity, except that he shall not set up the discharge of one individual as a discharge of the other copartners other than to the extent of the ratable portion of such discharged individual, unless it shall appear that all were intended to be so discharged.