CREATION OF AGENCY RELATIONSHIP I. Agency Key Exam Issues a.

A basic issue of any exam question involving agency is whether an agency relationship exists. Agency is generally defines as the relationship that arises when one person, the P, manifests an intention that another person, the A, shall act on the Ps behalf. The manifestation can occure by express or implied agreement b/w the P and the A, or after the fact by the Ps ratification of the As act. Even if there s no agreement or ratification, and agency can arise from the Ps conduct towards 3rd parties that causes them to believe that the P has appointed someone to be his A (apparent or ostensible agency) b. There are a few other requisites for the created of an agency: The P must have the capacity to K (the A need not have such capacity), and although no consideration is required and generally no writing is required (except where the SoF or an equal dignities rule applies), the agency must be formed for a legal purpose. II. Types of Principals a. Disclosed 3rd party knows the existence and identity of P b. Unidentified 3rd party knows existence but not identity of P c. Undisclosed 3rd party does not know of existence of P III. Creation of Agency Elements Checklist a. Consent of both parties b. Capacity P must have contractual capacity; A needs only minimal mental capacity, not capacity to contract c. Writing seldom required check SoF and/or equal dignities statute; most likely required for land sale Ks d. Proper purpose e. NOTE: consideration is NOT required IV. Exam Tips: a. Note the distinguishing factor differentiating apparent agency from ostensible agency: In the apparent agency situation, the P manifests that the A has authority. In the ostensible agency situation, the P makes no such manifestation, but instead fails to use reasonable care in preventing a 3rd party from relying on an As erroneous assertion of power or fails to notify the 3rd person that the A has no authority. b. Notice the different capacity requirements: A P must have contractual capacity but an A need not. Remember that whenever the exam question involves a minor or incompetent person, that person generally may be an A but cannot be a P. RIGHTS AND DUTIES BETWEEN PRINCIPAL AND AGENT I. Key Exam Issues: If your exam question involves a breach of duty by an A or P, you should consider the following: a. Duties of A/Rights of P A compensated A owes the P the duty to perform with reasonable care. If the A does not so perform, he may be held liable for breach of duty in both contract and tort (negligence). An

II.

III.

uncompensated A generally does not have a duty to perform, but once he performs, he may be subject to tort liability if he improperly performs. Additionally, every agent is a fiduciary, whether or not he is compensated. As such, he has a duty to: 1) notify the P of all matter that come to his knowledge affecting the subject of the agency; and 2) be loyal to the P, which includes avoiding conflicts of interest. If an A breached his duties, the P may, among other things, seek damages, recover the As ill-gotten profits, and withhold the As compensation (if any). b. Duties of P/Rights of A A P also owes duties to her A. Generally, the P must deal with the A fairly and in good faith, and act in accordance with the terms of the agency K. Unless it appears that the agency was intended to be gratuitous, the P has a duty to compensate the A. The P must also reimburse the A for all expenses incurred by the A in the discharge of the As duties. Furthermore, the P has a duty to cooperate with the A in the performance of his duties and to do nothing to prevent such performance. If the P breaches these duties, the A may seek indemnification from the P, put a lien on the Ps property in his lawful possession, or obtain most other breach of K relief. However, the A cannot obtain specific performance. Exam Tips a. Pay attention to the status of the A. Remember that a paid A can be subject to both contract and tort liability, whereas an unpaid A is generally subject only to tort liability unless the P can show that he detrimentally relied on the As promise. b. Remember sometimes the duty of loyalty is breached even though the A doesnt seem to have damages the P in any way. Consider the case where the A purchases the property he wants to sell for the P. The duty is so broad that even though the P got the price she asked for, the duty has ben breached by the As self-dealing. (A must have Ps consent to himself buy property that the P authorized him to sell) Duties of Principal and Agent a. Agent Duties i. Express and implied contractual duties ii. Reasonable care in performance iii. Obedience iv. Notification v. Loyalty vi. Segregation and accounting of property vii. Confidentiality b. Principals Remedies i. Contract remedies (If A compensated) ii. Tort remedies (If A negligent) iii. Punitive damages (for malice of bad faith) iv. Action for secret profits v. Rescission vi. Constructive trust

vii. Accounting viii. Withhold compensation ix. Indemnification c. Principal Duties i. Epress and implied contractual duties ii. Cooperation iii. Compensation iv. Indemnification v. Avoidance of negligence vi. Deal fairly and in good faith d. Agents Remedies i. Contractual remedies ii. Indemnification iii. Possessory lien iv. Withhold further performance v. Setoff vi. Accounting AGENTS POWER AND AUTHORITY TO BIND PRINCIPAL ON CONTRACTS I. Key Exam Issues: Often, an exam question will focus on whether a P is contractually bound by the acts of his A. Your answer will depend on whether the A had the power to bind the P. Such power can arise from the following sources. a. Actual Authority This is the best source of power bc it is the cornerstone of the agency relationship. It includes all powers expressly granted by the P to the A and any powers that can be implied from the Ps manifestations, as interpreted from the As point of view. If actual authority is not present in your exam fact patter, you the must determine whether some other source of power is available to bind the P. b. Apparent Authority This is the power that the P manifests to 3rd parties that the A has. Inasmuch as agency is based objective theory of contract, a P will be bound by and As acts if the 3rd party reasonably believes, based on the Ps manifestations to the 3rd party, that the A has authority. c. Estoppel this source of power is closely related to apparent authority and arises when the P intentionally or carelessly causes a 3rd party to believe another to be is A, and the 3rd party detrimentally relies on the belief. Where as apparent authority contractually binds the P, estoppel merely makes the P liable to the 3rd partys resulting losses. d. Note that power from the above sources in not everlasting. Once you have found a source of power, you must then examine whether the power had expired before the As acts. Actual authority can terminate in a number of ways: 1) by expiration of the agency terms; 2) by accomplishment of the agency prupose; 3) by change of circumstances, such as destruction of the subject matter or other change affecting value; 4) by death of incapacity of the P or A (upon notice); 5) by agreement of the parties; or 6) by cessation of existence of or suspension of powers. Even if an As

II.

III.

IV.

V.

actual authority has terminated, recall that any apparent authority continues until 3rd parties are notified of the termination. Sources of Agency Power a. Express Actual Authority - expressly granted by P to A (b/w P and A) i. A has the power and right to act for P (P is bound) b. Implied Actual Authority implied by A from Ps words or conduct (b/w P and A) i. Effect: A has the power and right to act for P (P is bound) c. Apparent Authority holding out by P and reliance by 3rd party (b/w P and 3rd party) i. Effect: A has the power to act (P is bound) but not the right (A may be liable to P) d. Estoppel Ps intentional or careless causing of detrimental reliance by 3rd party (b/w P and 3rd party) i. Effect: A has no power to act (P is not bound) but P must compensate 3rd party for losses. e. Note in some cases P may also be bound by raitification Will Agents Acts Bind The Principal To Contract? a. Was there express of implied actual authority (authority the A reasonable believes she possesses based on her dealings with the P)? i. If yes, the P will be bound ii. If no, continue to b b. Was there apparent authority (authority the 3rd party reasonable believes the A has based on the 3rd partys dealings with the P)? i. If so, the P will be bound ii. If no, continue to c c. Will the P be estopped from denying the As authority because the P intentionally or carelessly cause the 3rd party to believe another to be his A, and the 3rd party relied to her detriment? i. If so, the P will be bound ii. If no, continue to d d. Did the P ratify the K after the A entered into it on the Ps behalf and before the 3rd party withdrew? i. If so, the P will be bound ii. If no, the P will not be bound Implied Authority Checklist - Implied authority to act may arise: a. Incidentally from express authority b. From Ps manifestations (words or conduct) c. From custom or usage d. From an emergency situation Examples of Implied Authority a. Selling Agent i. Make warranties ii. Receive payment iii. Deliver goods iv. Negotiate terms

VI.

v. Conclude sale b. Purchasing Agent i. Make warranties ii. Pay purchase price iii. Accept goods iv. Conclude purchase c. Delegation i. Mechanical/ministerial acts ii. Agent cannot perform iii. Custom or necessity Exam Tips a. If you have an exam question where you have to determine whether an A had actual authority, first check for actual express authority. If express authority to do a particular act exists, there is no need to examine if the A had actual implied authority to do the act. b. If your exam question requires you to determine whether an A had actual authority to act, remember that the A in not limited to the four corners of the document granting authority (express authority). The a also has actual authority to do anything that a reasonable person in the As position would presume was authorized based on the communications or conduct b/w the P and A (i.e. implied authority). (See also Implied Authority Checklist) c. Be sure to remember that in an apparent authority situation, you need to discuss what transpired b/w the P and the 3rd party. This differs from an actual authority situation, where you would be discussing what transpired b/w the P and the A. In discussing the apparent authority, ask yourself what the P did to indicate to the 3rd party that the A had authority. d. If an apparent authority situation presents itself on the exam, you must look for (an discuss) the 2 requirements for apparent authority: 1) the P held the A out to a 3rd party as having authority, and 2) the 3rd party in fact reasonably relied on the holding out. e. One of the most important and frequently tested questions on an exam is whether the A had the power to act on behalf of the P. In answering such a question, you should use the approach suggested in the chart at III. That is, look first for actual authority, then for apparent authority. If neither exists, dontt overlook the other 3 ways that a P can be held liable for his As acts. Consider: 1) whether the P acted inappropriately and as such will be estopped from denying the As power; or 2) whether the P ratified the As act. Finally, keep in mind that the P will not be bound by the As act if the As authority (if based on actual or apparent authority) to act was terminated. f. Remember that, at least under the Rest. 3d of Agency, apparent authority may apply even if the actual authority has been terminated. If the As actual authority has been terminated bc of the Ps death or incapacity, check to see whether any 3rd party has notice of the death of

VII.

incapacity. If the A has notice but the 3rd party does not, then the A is acting with apparent authority and the 3rd party is protected. The rationale is that it is unjust to penalize third parties dealing with an A bc of the unknown death or incapacity of the P. (See Res. 3d 3.08 comment b) g. If in an exam you have determined whether an As authority to act for a P is terminated due to incapacity, ask yourself if the A can still perform the act authorized by the P even though she is incapacitated. If so, the As authority will not terminate. h. On an exam, it may seem unfair to hold the P (or his estate) liable for the As acts if the P was dead or incapacitated when the A exercised authority. For example while the A was in route to France to purchase and original Monet painting on the Ps behalf, the P died but the A received no notice of the death. When the A arrived in France she purchased the Monet for the P on the Ps credit. Under Rest. 3d of Agency, the termination of authority was not effective bc the agent had no notice of the death. Consequently, the A acted with actual authority and the Ps estate is liable to the 3rd party for payment of the purchase price for the Monet. Note, however, that under the Rest. 2d of Agency, the agents authority terminated on the Ps death. Thus, the estate would not be liable pursuant to that view. i. On an exam, if you find that the A had the actual or apparent authority to act for her P, recall that the P will not be bound by the As act if the As authority was terminated. Therefore, before answering that the P will be bound by the As act, check the facts of your question to see if the agents authority was somehow terminated such as by the Ps death (accompanies by notice under Rest. 3d of Agency) or expiration of the agency term. Remember that only if the As authority had not been terminated will the P be bound by the As act. Methods of Terminating Agents Authority a. Actual authority i. Expiration of agency term ii. Accomplishment of agency purpose iii. Destruction of subject matter or change of circumstances affecting value iv. Death or incapacity of A v. Death or incapacity of P (except for powers given as security and durable powers of attorney) 1. Majority View: Authority terminates automatically 2. Rest. 3d of Agency Authority terminates but is not effective against 3rd parties until notice is given vi. By agreement or by act of one or both parties vii. Cessation of existence or suspension of powers b. Apparent Authority i. Notification of termination to 3rd parties

1. Parties with whom A dealt usually must receive personal or individual notice 2. If apparent authority was created by public representation, public notice (e.g. in newspaper) is generally required 3. If P gave A a written authority, P must reclaim the writing or notify all parties with whom the A may deal. (If the writing was recorded, P must record revocation) ii. Death or incapacity of P or A 1. Majority view authority terminates automatically 2. Rest. 3d of Agency authority terminates when 3rd party receives notice RATIFICAITON I. Key Exam Issues occasionally, you may run into a situation where the A purports to be acting on behalf of the P when entering into a transaction with a 3rd party, but the A in fact has no authority to act (indeed, an agency relationship might not exist at all). Under ordinary agency rules, the P cannot be bound by the As act bc the A lacked authority. But what happens if the P wants to be bound? The doctrine of ratification allows the P to give authority after the fact, and the authority is treated as having existed at the time the A acted. For exam purposes the important points to remember are: a. Only the P may ratify, and the act being ratifies must be one that can be performed by an A (i.e. illegal acts cannot be ratified) b. The P must have actual knowledge of all material facts of the transaction at the time of ratification; otherwise, the ratification can later be rescinded. c. The P can ratify the act only if the P was in existence when the A acted and the P had capacity at the time of ratification (generally only relevant for artificial entities such as corporations). d. The P must manifest an intention to be bound by the As acts e. Only the entire transaction can be ratified. The P may not adopt beneficial parts of the transaction and reject the rest. It is an all or nothing proposition. f. Finally, ratification must occur before the 3rd party revokes (the K b/w the 3rd party and the A is treated as an offer, and the offer must be accepted by the P before it is revoked) g. Remember, ratification can both establish the agency relationship and provide authority for the A at the same time. If your exam question involves an As previously unauthorized act that the P wished to adopt, go through the above steps to determine whether the agency can be established through ratification. II. Approach to Ratification a. Did the A act or purport to act on Ps behalf? i. If no, ratification prohibited ii. If yes, continue to b b. Could the act have been authorized? (i.e. could P have legally delegated the act, and did P exist at the time of the act?)

i. If no, ratification prohibited ii. If yes, continue to c c. Did the P have knowledge of all material facts? i. If no, no effective ratification ii. If yes, continue to d d. Did the P manifest an intention to ratify (i.e. express affirmation or retention of benefits where there was an opportunity to reject them?) i. If no, no effective ratification ii. If yes, continue to e e. Before Ps assent, had the other party withdrawn, the P or 3rd party become incapacitated, or the circumstances changed? i. If yes, no effective ratification ii. If no, ratification effective* 1. *P must ratify the entire transaction; partial ratification is barred III. Exam Tips a. Watch for a situation where a 3rd party does not know he is dealing with an A, but the undisclosed P wants to ratify the unauthorized act of her A. In this situation, ratification would be ineffective under the Rest 2d of Agency: An undisclosed P cannot ratify the unauthorized act of her A bc on of the requirements of ratification is that the A purport to Aact on the Ps behalf. If the A did not disclose the Ps existence to the 3rd party, the A did not purport to be acting on the Ps behalf, and thus the P may not ratify the As act. (Note: Under the Rest. 3d of Agency, however, the ratification is effective) b. When determining whether the P has the Capacity to ratify, remember that the capacity is determined at the time of ratificationthe P need not have had the capacity to ratify at the time of the act. Thus, the P can ratify an act even if there is no capacity until after the act. c. If the issue on an exam is whether the P had indicated an intention to be bound by his As unauthorized act, remember that the P does not have to expressly affirm the As act (e.g. by notifying the A or 3rd party that he wants to accept the deal) to be bound by it. Usually, the P impliedly affirms the act. Therefore, be sure to check the facts to see if the P retained the benefits of the act, brought suit or maintained a defense based on the act, or failed to repudiate the act when he had a duty to do so. If so, the P has ratified the As act. d. Remember that the Ps ratification will be ineffective if the P does not ratify the entire transaction, the 3rd party revokes the offer before the P ratifies, or the circumstances change before ratification so that it would be inequitable to hold the 3rd party liable on the transaction. If the Ps ratification is ineffective, he cannot, of course, hold the 3rd party liable on the transaction. NOTICE, NOTIFICAITON, AND KNOWLEDGE I. Key Exam Issues notice is an important agency concept bc, under agency law, facts of which an A has notice will be imputed to the P and vice versa. However,

II.

it is not always clear whether an A has notice of a fact. To answer an exam question concerning notice of a fact, you will need to be familiar with the following. a. Notice is a broad concept that includes several lesser components. Perhaps the 2 most important of which are notification and knowledge i. Notification involves an act intended to bring to the P knowledge that affects her legal rights. If notification is involved, the key points to remember are that : 1. If the A receives notification, the P will be deemed to have notice if the A had actual or apparent authority to act regarding the subject matter of the notification. 2. Notification will not become ineffective bc of the passage of time ii. Knowledge on the other hand, involves facts subjectively known. On your exam, if a Ps rights or liabilities depend on knowledge of a certain fact, the key points to remember are that: 1. An As knowledge will be imputed to the P only if it concerns the subject matter of the agency and is within the scope of the agents actual authority; and 2. Bc knowledge is subjective, it may become ineffective because of the passage of time. Notification v. Knowledge a. Notification i. Defined an act calculated to give information to antoher that affects the legal relationship b/w the parties ii. Authority required for imputation P will be charged with notification given to A if A had any actual or apparent authority in the transaction to receive notification iii. Duration continues indefinitely- does not become ineffective bc of the passage of time iv. Effect of Adverse A notification still imputed to P unless 3rd party knew A was acting adversely b. Knowledge i. Defined subjective awareness of a particular fact or conditions ii. Authority required for imputation P will be charged with knowledge only if A had actual authority in the transaction to affect Ps rights. iii. Duration may become ineffective bc of the passage of time iv. Effect of Adverse A knowledge not imputed to P bc A was acting outside the scope of actual authority

LIABILITY ON AGENTS CONTRACTS I. Key Exam Issues A common exam issue is who may be held liable on the K entered into by an A on a Ps behalf. The basic rules are relatively simple a. The P can be held liable if the A acted with authority or some other form of agency power

II.

III.

IV.

b. The A can be held liable in a number of circumstances i. If the A lacked authority, the 3rd party can hold the A liable on a breach of warranty theory (i.e. an agent warrants that she is acting with authority) and/or on the K itself. ii. Even if the A acted with authority (and the P, therefore, can be held liable), the A might still be held liable by the 3rd party: 1. If the P is disclosed, the A can be held liable but only if her name appears on the K as a party (an not merely as an A); and 2. If the P is unidentified or undisclosed, the A may be held liable in most cases iii. The 3rd party generally can be held liable only by the P. However, note that in some cases, not even the P will be able to enforce the K, e.g., if the A fraudulently conceals the Ps identity. Contract Liability to 3rd Parties a. Did the A have authority to bind the P? i. If no, did the P ratify the K? 1. If no, P not liable; A liable for breach of warranty if she purportedly acted on behalf of the P; A liable on the K if the P was unidentified or undisclosed. 2. If yes, Was the P disclosed, unidentified, or undisclosed? a. Disclosed P is liable; A is not liable unless she agreed to be personally bound. b. Unidentified or undisclosed Both P and A are liable on the K, but the party is entitled to only one recovery ii. If yes, Was the P disclosed, unidentified, or undisclosed? a. Disclosed P is liable; A is not liable unless she agreed to be personally bound. b. Unidentified or undisclosed Both P and A are liable on the K, but the party is entitled to only one recovery rd Agents Liability to 3 Party When Acting Without Authority a. Disclosed P Situation i. Breach of Warranty A liable ii. On Contract A NOT Liable b. Unidentified P Situation i. Breach of Warranty A liable ii. On Contract A Liable c. Undisclosed P Situation i. Breach of Warranty A NOT liable ii. On Contract A Liable Agent Acting With Authority Key Points to Remember a. Disclosed P i. What info does 3rd party have? Knows or should know Ps identity

ii. Who are the parties to the K? P only, unless agreed that A is also a party iii. What are K rights of P? Enforcement of Terms iv. What are the K rights of A? None, unless A is also a party v. Is parol evidence admissible? No, unless there is an ambiguity b. Undisclosed P i. What info does 3rd party have? None-neither fact of agency nor Ps indentity disclosed ii. Who are the parties to the K? P and A iii. What are K rights of P? Compel 3rd partys performance unless A fraudulently concealed Ps identity; performance would impose a greater burden on 3rd party; or As authority is coupled with an interest (only A can compel performance) iv. What are the K rights of A? indemnification or relief based on quasi-K v. Is parol evidence admissible? Yes, to show A was acting on behalf of P c. Unidentified P i. What info does 3rd party have? Notice that A is acting as A but does not know Ps identity ii. Who are the parties to the K? P and A, unless A and 3rd party agree A is not a party iii. What are K rights of P? Enforcement of terms iv. What are the K rights of A? Enforcement of terms v. Is parol evidence admissible? Yes, to show parties intended A to be bound SKIPPED TORT LIABILITY I. NATURE AND FORMATION OF PARTNERSHIP Key Exam Issues a. To determine whether a partnership has been formed, you should first remember the general definition of a partnership: an association of 2 or more persons to carry on as co-owners a business for profit. (Note that intent to form a partnership is not within the definition) Then you will have to determine whether: i. The business is for profit; if not, there is no partnership ii. The parties have agreed to form a partnership. Remember that a writing is generally not requiresany agreement to run a forprofit business as co-owners will suffice. The agreement need not even be verbal; it can arise from the conduct of the parties. If there is an agreement to share profits, it constitutes a presumption (prima facie evidence under UPA) that the parties intended to form a partnership unless the sharing is to repay a laon, as payment of wages, constitutes rent, etc. iii. The parties have capacity to K.

II.

III.

b. An exam might also touch on the nature of partnership. Remember that there are certain situation in which a partnership is not treated as an entity distinct from the partners (e.g. under federal tax laws, a partnership is not a taxable entity; profits and losses flow through the partnership to the partners). But note that there are other situations in which a partnership is treated as an entity (e.g. a partnership may sue or be sued in its own name and may own property in its own name) Summary of Factors Indicating a Partnership a. Presumption of Partnership under RUPA (Prima Facie Evidence of Partnership under UPA) sharing of profits b. Other less important factors i. Joint ownership of property ii. Contribution of capital iii. Sharing of gross income iv. Parties designation of their relationship Exam Tips a. Even though we have studied one or both of the Uniform Partnership Acts, before you decide an exam issue based on those statutory provisions, first check to see if the partners have entered into an agreement concerning the issue. If so, remember that the agreement usually controls. b. When you are determining whether a partnership has been formed, remember that you need to look only for evidence that 2 or more parties are operating a business for profit. You do not need to determine whether they actually intended that a partnership be formed. c. If an exam question asks whether you can hold a person who is not a partner liable to a 3rd person on a partnership debt, your answer will depend on whether the person did something to indicate that hse was in fact a partner. Remember that a person who represents herself as a partner or consents to a representation that she is a partner is liable to a 3rd person who extends credit to the partnership in reliance on the representation

EFFECT OF PARTNERSHIP RELATIONSHIP I. Key Exam Issues Once you have established that a partnership exists, you will be ready to address the heart of a partnership question: Who is liable to whome and for what? On your exam, you need to remember the following: a. Partners as Among Themselves Partners are fiduciaries and owe each other the duties of loyalty and due care and must act in good faith and with fair dealing. They must account to the partnership for any profits made from partnership-related activities. They may not compete with the partnership. Unless otherwise agreed, each partner has an equal right to participate in management and profits but is not entitle to any salary. The RUPA allows a partner to sue another partner at law or in equity to enforce certain rights, such as those under the partnership agreement or arising independent of the partnership relationship. Under UPA, partners

cannot sue each other at law for damages during the term of the partnership but can only seek an equitable accounting to determine what monies are owing each partner b. Partners Authority to Bind Partnership to 3rd Persons Each partner is an A for the partnership and has apparent authority to bind the partnership whenever apparently carrying on business of the partnership in the usual way. A partners actual authority can be granted in the partnership agreement or by a vote of the partners (majority vote for ordinary business; unanimous vote for extraordinary matters) c. Notice and Knowledge The rules regarding notice to and knowledge of partnership are similar to those for agency. Under the RUPA, a partnership has notice or knowledge of a fact if the individual conducting the transaction has notice or knowledge or would have had notice or knowledge of the fact had reasonable diligence been exercised. Under the UPA, the partnership is deemed to have notice whenever it is communicated to any partner. Whether a partnership will be deemed to know what a partner knows depends on whether the partner was participating in the transaction and when the knowledge was acquired. If the partner was a participant, any knowledge acquired after becoming a partner will be imputed to the partnership, but knowledge acquired before becoming a partner will be imputed only if it was present in her mind at the time she was acting. If the partner was a nonparticipant, her knowledge will be imputed to the partnership only if she reasonably could have and should have communicated it. d. Partners Liability to 3rd Persons Under the RUPA, partners are jointly and severally liable for all partnerships obligations. Under the UPA, partners are jointly liable for all contract obligations to partnership creditors and jointly and severally liable for all obligations owed by the partnership to 3rd persons (e.g. tort liabilities). An incomoing partner is not liable for partnership obligations incurred before the partner joined the partnership (or the incoming partners liability is limited to partnership assets under the UPA). A retiring partner remains liable on all partnership obligations incurred before giving notice of withdrawal.