N.J.S.A. 42:5-4 — Compromise with one partner not to discharge copartners; effect on rights between creditors and copartners

42:5-4. Compromise with one partner not to discharge copartners; effect on rights between creditors and copartners 1. A compromise or composition with individual members of a partnership shall not: 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.

This is the verbatim text of N.J.S.A. 42:5-4, retrieved from the New Jersey Legislature's public statute corpus. Statutes are amended periodically — for the most current version, check the external source link above. Kyzer is not a law firm and this page is not legal advice.