O.C.G.A. § 14-9-502 (2019)
Promise to contribute; liability for contribution
(a) Notwithstanding any other provision of law regarding unwritten contracts, including but not limited to Code Section 13-5-31, a promise by a person to make a contribution to the capital of a limited partnership is not enforceable unless set out in a writing signed by the person or his attorney in fact.
(b) Except as provided in the partnership agreement:
(1) A partner is obligated to the limited partnership to perform an otherwise enforceable promise to contribute cash or property or to
CORPORATIONS & PARTNERSHIPS perform services and to pay interest on the agreed contribution from the date the contribution is due; and
(2) This obligation exists even if the partner is unable to perform because of death, disability, or any other reason.
(c) Unless otherwise provided in the partnership agreement, the obligation of a partner to make a contribution to the capital of the partnership may be reduced or eliminated only by consent of all partners.
History
(Code 1981, § 14-9-502, enacted by Ga. L. 1988, p. 1016, § 1.)
Annotations
Law reviews. - For survey article on business associations, see 44 Mercer L. Rev. 67 (1992). COMMENT Note to Georgia Revised Uniform Limited Partnership Act This section provides for enforceability and reduction or elimination of contribution obligations. The section in effect provides for its own Statute of Frauds that is not subject to the exceptions of the general Statute, particularly the part performance provision specifically referenced. Subsection (a) clarifies that a person cannot be required to make a contribution, including by amendment of the agreement or merger, unless he has specifically promised to do so. Prior Georgia Law Section 14-9A-48 provides for liability to the partnership for the difference between the actual contribution and that stated in the certificate, and that a compromise of this liability does not affect a relying creditor. Comparison With Official RULPA The Section changes the official version by making agreed reduction or elimination of the contribution effective even as against creditors who purportedly relied on the contribution. Since it is highly unlikely that a creditor will ever be able to establish that he extended credit in reliance on a particular contribution, particularly since contributions are no longer required to be stated in the certificate, permitting creditor recovery in this situation has little practical benefit. There is no equivalent rule in the corporate statute. Such a rule has, if anything, even less of a place in a limited partnership statute since the general partners are personally liable in all events and thus will not make improvident compromises. The section also differs from the official version in requiring payment of interest on agreed contribution obligations. Interest is defined in Section 14-9-101(6) to refer to the legal rate where the rate is not named in the contract. The interest requirement reflects the fact that the contributor begins earning benefits on the contribution from the time of contributing the obligation. It is also consistent with Section 14-9A-48 in the prior law, which provides that the defaulting partner holds non-contributed property as a trustee. There is no requirement as in the official version that a partner who fails to contribute property or services must contribute cash equal to the value of the contribution stated in the partnership records. The measure of damages will be determined under conventional breach of contract rules. As stated above, no creditor reliance interest justifies emphasis on the stated value of partner contributions.
Cross-References Legal rate of interest where not provided for by contract: § Section 7-4-2. Form and manner of contribution: § 14-9-501. Definition of ‘‘contribution’’: § 14-9-101(2). JUDICIAL DECISIONS Purpose. - O.C.G.A. § 14-9-502 was intended to bar creditor recovery from limited partners. Antonic Rigging &
Erecting of Missouri, Inc. v. Foundry E. Ltd. Partnership, 773 F. Supp. 420 (S.D. Ga. 1991).
RESEARCH REFERENCES Am. Jur. 2d. - 59A Am. Jur. 2d, Partnership, § 852 et seq.
C.J.S. - 68 C.J.S., §§ 563, 585 et seq.
Partnership,