A partnership involves an association between two or more persons to carry on a business as coowners for profit. Items 1 through 10 relate to partnership agreements.

\section*{Required}

The statement of facts for parts \(\mathrm{A}\) and \(\mathrm{B}\) are followed by numbered sentences that state legal conclusions relating to those facts. Determine whether each legal conclusion is correct.

\section*{Part A}

Adams, Webster, and Coke were partners in the construction business. Coke decided to retire and found Black, who agreed to purchase his interest. Black was willing to pay Coke \(\$ 20,000\) and promised to assume Coke's share of all firm obligations.

1. Unless the partners agree to admit Black as a partner, he could not become a member of the firm.

2. The retirement of Coke would cause a dissolution of the firm.

3. The firm creditors are third-party beneficiaries of Black's promise to Coke.
4. Coke would be released from all liability for firm debts if his interest were purchased by Black and Black promised to pay Coke's share of firm debts.
5. If the other partners refused to accept Black as a partner. Coke could retire, thereby causing a dissolution.
Part B Carson, Crocket, and Kitt were partners in the importing business. They needed additional capital to expand and located an investor named White, who agreed to purchase a one-quarter interest in the partnership by contributing \(\$ 50,000\) in capital to the partnership. At the time White became a partner, there were several large creditors who had previously loaned money to the partnership. The partnership subsequently failed, and the creditors are attempting to assert personal liability against White.
6. White is personally liable on all firm debts contracted subsequent to his entry into the firm.
7. Creditors of the first partnership automatically become creditors of the new partnership continuing the business.
8. Creditors of the old firm which existed prior to White's entry can assert rights against his capital contribution.
9. White has personal liability for firm debts existing prior to his entry into the firm.
10. White must remain in the partnership for at least one year to be subject to personal liability.