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Watson decided to withdraw from the Sterling Enterprises Partnership. Watson found Holmes as a prospective purchaser and his successor as a partner in the partnership. The other partners agreed to admit Holmes as a general partner in Watson's place. As a part of the agreement between Watson and Holmes, Holmes promised to satisfy any prior partnership debts ("hold harmless" clause) for which Watson might be liable. What potential liability does Holmes or Watson have to firm creditors?
a. Holmes has no liability for the obligations arising before he entered the partnership.b. Holmes is liable for the obligations arising before he entered the partnership, but only to the extent of partnership property.c. Holmes is fully liable to firm creditors for liabilities occurring before and after his entry into the partnership.d. Watson's liability to firm creditors has been extinguished.
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