Agency And Partnership

Front 1

3 Questions of Agency

Back 1

- Liability of Principal to 3rd parties for tort of A.
- Liabilty of P to 3rd for K entered by A.
- Duties A owes to P.

Front 2

1.

Respondeat Superior and Agency

Back 2

P is liable for A tort if:
- Principal agent realtionship
- tort its within SCOPE of agency

Front 3

2.

Principal-Agent Relationship

Back 3

(ABC)
1. Assent (informal agreement) between P (w/ capacity) and A.
2. Benefit (A's conduct is for P's benefit.)
3. right to Control- P must have right to control agent by having power to supervise manner of A's performance.

Front 4

3.

Borrowed/Sub-Agent Liability of P

Back 4

- Liable when there is Assent, Bene, and Control between P and Sub-A(gen. no assent or right to control) or Borrowed Agent(gen fails to due lack of control).

Front 5

4.

Independent Contractor

Back 5

- No right to Control an independent contractor because no power to supervise manner of performance.
-

Front 6

5.

Independent Contractor
- Vicarious Liability of P

Back 6

- Gen- No control therefore no liabilty for IC's torts.
Exceptions:
- Ultra- hazardous activities (non-delegable duty).
- Estoppel- "If Princ. Holds out IC w/ appearance of A, Princ. will be estopped from denying vicarious liability."

Front 7

6.

Scope of Agency

Back 7

3 Part Weighing Test:
1. Was conduct "of kind(nature)" agent hired to perform? (within job the job description)
2.*Did tort occur on job or someplace else? (Froic/Detour)
3. Did A intend to bene. P? (liability if A, even in part, to bene. P with conduct)

Front 8

7.

Scope of Agency
-Intentional Torts

Back 8

Gen- Outside scope.
In scope if conduct was:
- Authorized by P.
- Natural from nature of employment.
- Motivated by desire to serve P.

Front 9

8

P liabily for K Entered By Agent

Back 9

- Liabile for k entered into by A if P AUTHORIZED A to enter k.

Front 10

9.

Liability for K Entered into By A
- Authorization of Entry

Back 10

1.Actual Express Authority
2. Actual Implied Authority
3. Apparent Authority
4. Ratification

Front 11

10.

Liability for K Entered into By A- Authorization of Entry
- Actual Express Authority

Back 11

- Can be oral and private but is narrowly tailored.
- Authority must be written if K must be in writing. (gen. Land)

- Revoked by
x- Unilateral act by P or A.
x- Death or incapacity of P.
xx- Survives death if there is a durable power of attorney.

Front 12

11.

Liability for K Entered into By A- Durable
- Power of attorney

Back 12

- Express intent of survival.

- POA- Written expression of authority to enter a transacions

Front 13

12.

Liability for K Entered into By A- Authorization of Entry
- Actual Implied Authority

Back 13

- Implied for conduct circumstance. D liable for:
1. Neccesity- All task necessary to accomplish expressly authorized task.
2. Custom- Tasks Customarily performed by person with A's title or position.
3. Prior Dealings- Task which A believes to have been authorized to do from prior acquiescence.

Front 14

13.

Liability for K Entered into By A- Authorization of Entry
- Apparent Authority

Back 14

- P has "cloaks" A with appearance of authority and
- 3rd party reasonably relies on that appearance. (and has no notice to the contrary).

Front 15

14.

Liability for K Entered into By A- Ratification

Back 15

Authority granted fter k created, if P ratifies by:
1. P having knowledge of all material facts in re k, and
2. P accepts benes.
x- Entire k must be ratified if at all, no ratification if attempts to alter terms of k.

Front 16

15.

A Liabilty Under K

Back 16

- A not liable under authorized k unless.
- Undisclosed Principal- Authorized A may be liable , at election of 3rd party, if P undisclosed (fact of principal concealed)

Front 17

16.

Duties A Owes P

Back 17

- Duty of Care
- Duty to Obey Reasonable Instructions
- Duty of Loyalty

Front 18

17

- Duty of Loyalty

Back 18

A can never:
- Self-deal- A cant receive bene to detriment of P.
- "Usurping" P's opportunity
- No profit at expense of P without disclosure.

Front 19

18

- Duty of Loyalty
- Remedy for Breach

Back 19

- P can recover:
1. Losses caused by breach.
2. May disgorge profits made by breaching A.

Front 20

19.

General Partnership

Back 20

- "Association, of 2 or more, who are carrying on as co-owners of a business for profit."
- Presumption of gen P'ship created by contribution of capital or services in return for a "share of profits"(not salary, commission etc.)
- No formalities req.

Front 21

Partnership Issues

Back 21

- Gen partnership formation
- Liability of gen partner to 3rd parties
- Right and Liabilities Between partners (Formation, Liability, Estoppel)
- Gen Partnership Dissolution
- Alt. Inc. Business Orgs.

Front 22

20.

Liabilities of Gen Partners to 3rd Party.

Back 22

- Agency laws apply
- Partners are A for pship for apparently "carrying on usual p'ship business."
- Each Partner personally liable for all debts of the partnership and for each co-partner's torts.

Front 23

21.

Liabilities of Gen Partners to 3rd Party.
1. Prior Debts
2. Dissociating Partner

Back 23

1. Incoming partner gen not liable for prior debts, but any money paid in by incomer can be used by partnership to satisfy priors.
2. Dissociating partner retains liability on future debts until "actual notice" of dissociation given to creditors or 90 days after filing notice of dissociation with state.

Front 24

22.

Liabilities of Gen Partners to 3rd Party.
- *Estoppel

Back 24

- Where no gen pship formed, estoppel creates liability as partner if person represents oneself to 3rd party as partner of another.

Front 25

23.

Right and Liability Between Gen Partners

Back 25

- Gen partners are fiduciaries to each other and the pship..(Owe great duty of loyalty). Cant:
x- Self Deal
x- Usurp opportunities
x- Make a secret profit at pship expense.

Front 26

24.

Action For Accounting

Back 26

When fiduciary breach, Pship may recover:
1. Losses caused by breach and
2. Disgorge profits.

Front 27

25.

Partnership Rights in Pship Prop and Liquidity
- Specific Pship Asset

Back 27

- ie- Land, leases, and equipment owned by p'ship itself as specific pship assets
- Can NOT be txrd by any individual partner without pship authority.

Front 28

26.

Partnership Rights in Pship Prop and Liquidity
- Share of Profits
- Share in Management

Back 28

- Personal prop owned as such by individual partners, can be txrd by individual partners.
- Owned only by pship itself, cant be txrd by any individual partner.

Front 29

27.

Partnership Rights in Pship Prop and Liquidity
- Specific Asset v. Personal Prop

Back 29

- Based on who's money used to buy prop.
- If pship used, pship prop.
- If personal money, personal prop.

Front 30

28.

Management of Pship

Back 30

- Absent an agreement otherwise, shares equal(1 partner-1 vote)

Front 31

29

Partnership Salary

Back 31

- Absent agreement, partners go NO salary.
- P's can recieve compensation to help WIND UP partnership business.

Front 32

30.

- Share of Profits
- Share of Losses

Back 32

-Absent an agreement, profits shared equally.
- Absent agreement, losses shared like profits.

Front 33

31.

Pship Dissolution

Back 33

In absence of agreement that set forth events of dissolution, Gen pship dissolved upon notice of express will of any 1 gen partner to dissociate.
- Leads to termination

Front 34

32.

Pship Dissolution
- Winding Up

Back 34

- Period between dissolution and termination where remaining partners liquidate p'ship assets to satisfy p'ship creditors.

Front 35

33.

Pship Dissolution
- Winding Up Liability
1. Existing Creditors
2. New Business

Back 35

1. P'ship and individual partners retain liability on all transactions to wind up all business w/ existing creditors.
2. Individual gen partners retain liability until notice of dissolution is given to creditors or until 90 days after statement of dissolution with the state.

Front 36

34.

Pship Dissolution
- Winding Up

Back 36

- Each level must be fully satisfied before moving on.
1. All outside non-partner trade creditors and all partners who loaned money to pship and become creditors thereby.
2. All capital contribution by partners.
3. Profits and surplus if any.

Front 37

35.

Limited Partner

Back 37

- Pship with at least one gen partner and at least one limited partner.
- Formed by filing limited pship certificate, that in c name of all gen partners.

Front 38

36.

Limited Partner
- Liability And Control

Back 38

- Gen partners- liable for all obligations of the limited p'ship but have right to manage the business
- Limited Partners- Not liable for obligations of pship. In most states (inc Cal.), cant manage business without forfeiting limited status.

Front 39

37

Registered LLP

Back 39

Formation- Reg by filing statement of qualification and annual reports.

Liabilities- NO partner liable for debt of pship itself. (only

Front 40

38.

Limited Liability Company

Back 40

- Hybrid between corp and p'ship.
- Owners (members) have same limited liability of SH's in corp & bene. of p'ship tax status.
- Formation- File Articles of Organization. Can also adopt operating agreement.

Front 41

38.

Limited Liability Company
- Control

Back 41

- Owners (members) may control but may also delegate control to team of managers.(board of directors)

Front 42

39.

Limited Liability Company
- Limit on Liquidity

Back 42

- Full membership interest may not be txrd w/o unanimous consent of all members.

Front 43

40.

Limited Liability Company
- Limited Life

Back 43

- Art. of Org or Operating Agreement MUST indicate event that dissolves LLC.

Front 44

41.

LLCs

Back 44

"LLC equal
1. Limited liability
2. Limited liquidity
3. Limited life
4. Limited taxes

Front 45

6.1

- Frolic
- Detour

Back 45

x- *Frolic- New and independent journey.(no liability for P)
x- *Detour- Near departure from assigned take. (liability)

Front 46

36.1

Limited Partner
- Liability And Control
x- ULPA

Back 46

- Limited partners can manage w/o forfeiting limited liability.

Front 47

34.1

Pship Dissolution
- Winding Up
- Due to Partners

Back 47

"Each P must be repaid his or her loans and capital contribution, plus that share of profits or minus that partners share of the losses."