Agency And Partnership

Front 1

Formation of Agency

Back 1

Assent - informal agreement

MUST be Benefit to Principal

Principal has RIGHT to control

Front 2

Subagent

Back 2

Agent's Helper

Front 3

Borrowed Agent

Back 3

One Principal Uses Another Principal's Agent

Borrowing Principal Usually has NO right to control... therefore, no formation of agency

Front 4

Independent Contractor

Back 4

Acts without control by Principal

There is no vicarious liability UNLESS ultrahazardous activity or estoppel (holds out self to be Principal's agent)

Front 5

Principal's Liability for Torts

Back 5

There must be Agency formation

Agent's conduct must be within job description

If Agent's conduct is "frolic" (new and independent journey), NOT within scope of agency. If conduct is "detour," then within scope.

Front 6

Principal's Liability for Intentional Torts

Back 6

Only if Principal authorized conduct

Conduct is a natural outgrowth of job

Agent intended to benefit Principal

Front 7

Principal's Liability for 3rd Party Contracts

Back 7

Only if Principal authorized

Front 8

Actual Express Authority by Principal

Back 8

Principal uses actual words

Revocable by either party or death of Principal

Irrevocable if Principal gave Agent Durable Power of Attorney

Front 9

Apparent Authority by Principal

Back 9

Principal "cloaks" agent with authority

3rd Party reasonably relies on appearance of authority

Front 10

Ratification by Principal

Back 10

Principal has knowledge

Principal accepts benefits

In NY, Principal MUST accept entire deal

Front 11

Agent's Liability for 3rd Party Contract

Back 11

Agent is liable if Principal did not authorize

Agent is liable if Agent did not reveal Principal to 3rd Party

Front 12

Agent's Duties to Principal

Back 12

Care

Obedience

Loyalty

Front 13

Agent's Loyalty

Back 13

No Self- Dealing

No Usurping of Business Opportunities

No Secret Profits

Front 14

Principal's Remedy for Agent's Breach

Back 14

Recovery of Damages

Disgorging of Profits

Front 15

Formation of Partnership

Back 15

Need not be formal

There must be profit-sharing

Contribution of capital or services

Front 16

Liability of General Parters

Back 16

Bound by other Partners' Torts within Scope of Partnership

Bound by other Partners' Contracts authorized by Partnership

Personally Liable for Debts of Other Partners

Front 17

Liability of Incoming Partners

Back 17

Not personally liable for prior debts but $ brought in by new partners may be used by partnership to pay off old debts

Front 18

Liability of Outgoing Partners

Back 18

Personally liable for future debts until death UNLESS notice of withdrawal from partnership is given to all past and potential creditors

Front 19

Liability by Estoppel

Back 19

One who represents to a 3rd party that Partnership exists is liable as if partnership exists

Front 20

Action for Accounting

Back 20

Violation of breach of fiduciary duty

Can demand losses and disgorge breaching partner's profits

Front 21

Partner's Share of Profits

Back 21

Partner's personal property

Can be transferred to a 3rd party

Front 22

Partnership Assets

Back 22

Are NOT personal property

Are partnership property

Front 23

Shares in Management

Back 23

Are NOT personal property

Are partnership property

Front 24

Voting in Partnership

Back 24

ABSENT AN AGREEMENT, each partner has an equal vote

Front 25

Partner Salary Allocation

Back 25

ABSENT AGREEMENT, partners take NO salary except during wind-up

Front 26

Partner Profit Allocation

Back 26

ABSENT AGREEMENT, each partner takes equal profit

Front 27

Partner Losses Allocation

Back 27

ABSENT AGREEMENT, losses are calculated in the same manner as profits

Front 28

Dissolution of Partnership

Back 28

Occurs when any one partner pulls out

Front 29

Termination of Partnership

Back 29

Permanent end of partnership

Front 30

Wind-up

Back 30

Period between Dissolution and Termination

Liquidation of Partnership's Remaining Assets

Front 31

Post-Partnership Liability

Back 31

Partnership and Partners retain liability on OLD transactions

Partnership and Parters retain liability on NEW transactions until notice of dissolution is given to all known creditors

Front 32

Schedule of Partnership Distribution

Back 32

First: To all outside creditors

Second: To all partners who loaned $ to partnership

Third: To all partners who made capital contributions

Fourth: To all profit participants

If capital contributions can't be repaid, each partner pays an equal amount to pay off capital contributions