Gwen retires from the firm of Hale & Partners. The firm places a notice of her retirement in the London Gazette but writes to no one. Six months later the firm incurs debts to (1) Orchard Ltd, a long-standing supplier that had dealt with the firm while Gwen was a partner and has not otherwise learned of her retirement, and (2) Pemberton Ltd, a new supplier that had never heard of Gwen. Who can hold Gwen liable for these debts?

Correct answer: B) Orchard Ltd only, because existing customers are entitled to actual notice of retirement

Explanation

Under s36(1) Partnership Act 1890, a person who dealt with the firm before a change in its constitution may treat all apparent members as still partners until they have notice of the change. A Gazette notice is not enough for such existing customers: they need actual notice, which Orchard never received, so Gwen is liable to Orchard. Under s36(2), a Gazette notice is notice to persons who had no dealings with the firm before the change. In any event, s36(3) provides that a retired partner is not liable for debts contracted after retirement to persons who did not know them to be a partner, so Pemberton could never hold Gwen liable. There is no partnership register.