Section 25Part 1 — Exempted Limited Partnership Act
Failure to perform
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If a partnership agreement provides that where a partner fails to perform any of its obligations under, or otherwise breaches the provisions of, the partnership agree ment that partner may be subject to or suffer remedies for, or consequences of, the failure or breach specified in the partnership agreement or otherwise applicable under any law then those remedies or consequences shall not be unenforceable solely on the basis that they are penal in nature.
The remedies or consequences under subsection (1) may include but are not limited to any one or more of the following —
reducing, eliminating or forfeiting the defaulting partner ’ s partnership interest in the exempted limited partnership or any rights of the defaulting partner under the partnership agreement;
subordinating the defaulting partner ’ s partnership interest to the interests of non - defaulting partners;
effecting a forced sale or forfeiture of the defaulting partner ’ s partnership interest;
arranging for the lending by other partners or other persons to the defaulting partner of the amount necessary to meet the defaulting partner ’ s commitment; Section 26 Exempted Limited Partnership Act (2025 Rev ision)
providing for the fixing of the value of the defaulting partner ’ s partnership interest by appraisal or by formula and the redemption or sale of the defaulting partner ’ s partnership interest at that value; or
exercising any other remedy or consequence specified in the partnership agreement or avai lable under any applicable laws.
Subject to the general partner ’ s duty under section 19(1), a general partner shall not be liable for its decision to impose or for imposing any remedies or consequences upon any partner, or for its decision not to do so and references in this subsection to a partnership interest shall for the avoidance of doubt also be construed as including any part thereof.