2015 Utah Code
Title 48 - Unincorporated Business Entity Act
Chapter 1d - Utah Uniform Partnership Act
Part 4 - Relations of Partners to Each Other and to Partnership
Section 405 - Standards of conduct for partners.

48-1d-405. Standards of conduct for partners.

• (1) A partner owes to the partnership and the other partners the duties of loyalty and care stated in Subsections (2) and (3).

• (2) The duty of loyalty of a partner includes the duties:
  • (a) to account to the partnership and hold as trustee for it any property, profit, or benefit derived by the partner:
    • (i) in the conduct or winding up of the partnership's activities and affairs;
    • (ii) from a use by the partner of the partnership's property; or
    • (iii) from the appropriation of a partnership opportunity;
  • (b) to refrain from dealing with the partnership in the conduct or winding up of the partnership's activities and affairs as or on behalf of a person having an interest adverse to the partnership; and
  • (c) to refrain from competing with the partnership in the conduct of the partnership's activities and affairs before the dissolution of the partnership.

• (3) The duty of care of a partner in the conduct or winding up of the partnership's activities and affairs is to refrain from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.

• (4) A partner shall discharge the duties and obligations under this chapter or under the partnership agreement and exercise any rights consistently with the contractual obligation of good faith and fair dealing.

• (5) A partner does not violate a duty or obligation under this chapter or under the partnership agreement solely because the partner's conduct furthers the partner's own interest.

• (6) All the partners may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty.

• (7) It is a defense to a claim under Subsection (2)(b) and any comparable claim in equity or at common law that the transaction was fair to the partnership.

• (8) If, as permitted by Subsection (6) or the partnership agreement, a partner enters into a transaction with the partnership which otherwise would be prohibited by Subsection (2)(b), the partner's rights and obligations arising from the transaction are the same as those of a person that is not a partner.

Enacted by Chapter 412, 2013 General Session