Agency And Partnership

Front 1

Principal and Agent Relationship Requirements

Back 1

Requires all 3
1. Assent
2. Benefit
3. Control

Front 2

Liability of Principal for Torts of an Agent

Back 2

2 part test
1. A principal agent relationship
2. The tort was committed by the agent within the scope of that relationship

Front 3

Agent vs Independent Contractor

Back 3

No vicarious liability w/o the power to control the independent contractor’s tort.

Front 4

Exceptions to Liability of Independent contractor

Back 4

2 Exceptions
1. Ultra hazadous Activity
2. Estoppel - If independent contract is "held out" with appearance of agency, you will be prevented (estopped) from denying vicarious liability

Front 5

Scope of Principal/Agent Relationship

Back 5

3 Part Test
1. Was the conduct "of the kind" agent hired to perform?
2. Did the tort occur on the job?
3. Did the Agent benefit the Principal?

Look for Frolic and Detour

Front 6

Frolic vs Detour

Back 6

Frolic: A new and independent journey, this is outside the scope of agency - NOT LIABLE

Detour: A mere departure from an assigned task, this is within the scope of agency. YES LIABILE

Front 7

Intentional Torts

Back 7

Intentional torts (like assault and battery) are outside the scope of agency.

Front 8

Exception to liability on Intentional Torts

Back 8

1. Specifically authorized
2. Natural part of employment
3. motivated by a desire to benefit the principal.

Front 9

Liability of Principal for K entered by Agents

Back 9

Principal is liable for contracts entered into by its agent if the principal authorized the agent to enter into the contract

Front 10

4 Types of Authority

Back 10

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

Front 11

Actual Express Authority

Back 11

Principal used words to express authority.

Exception: if conveyance of land must be in writing.

Revocation: Death by principal

Front 12

Actual Implied Authority

Back 12

Authority which agent reasonably belives principle has given, because: (3)
1. Necessity
2. Custom
3. Prior Dealings

Front 13

Apparent

Back 13

2 Part Test
1. Principal "cloaked" agent with the appearance of authority AND
2. Third party reasonably relies on the appearance of authority.

Watch for Lingering Authority and Secret Limiting Instruction- Principle still Liable!

Front 14

Secret Limiting Authority

Back 14

Under test for Apparent Authority, if agent has actual authority but principle has secretly limited it, and agent acts beyond that limit the principle is still liable

Front 15

Lingering Authority

Back 15

Actual authority has been terminated, but afterward the agent continues to act on principal's behalf - Principal is still liable.

Front 16

Ratification

Back 16

Authority can be granted after the K has been entered.
1. Principal has knowledge
2. Principal has accepted the benefits.
**Can not alter the terms of the K. K must be accepted in full.

Front 17

Liability of Principal for K

Back 17

1. If no authority, principal is not liable on K and agent is.
2. If authority, principal is liable on K and agent is NOT.

Front 18

Duties Agent owes to Principal

Back 18

1. Duty to exercise reasdonable care
2. Duty of loyalty
3. Duty to obey reasonable instructions

Front 19

Duty of Loyalty

Back 19

No Usurpping
No Self Dealing
No Secret Profits

Front 20

Partnership Formation

Back 20

GP is an association of 2 or more people who are carrying on as co-owners of a business for profit. GP share in profit.

Front 21

Liabilities to 3rd parties by GP

Back 21

Partnerships are agents and therefore liable and bound by
1. K of partners (w/authority)
2. Torts of partners (in scope of partnership)
3. Debts
*Outgoing liable for subsequent debts
Incoming not liable for pre-exsiting debts

Front 22

LP (definition and formation)

Back 22

A LP is at least 1 GP and 1 LP and must file LP certificate

Front 23

LLC (definition and formation)

Back 23

Purpose: a. To give the owners the same rights and limited liability in a corporation and also has the benefits of partnership tax status
Must file articles of org. and publish 1 a week for 6 weeks in a row in 2 newspapers

Front 24

Partners Rigths in Management

Back 24

Absent an agreement each partner is entitled to EQUAL vote

Front 25

Partners Rights in Profits

Back 25

1. Absent, an agreement, Profits share EQUALLY
2. Absent an agreement, Losses shared LIKE PROFITS.

Front 26

Winding up

Back 26

The period between the dissolution and termination in which the remaining partners must liquidate the partnership assets to satisfy the partnerships creditors

Front 27

Priority of Dissolution

Back 27

1. Creditors
2. Capital Distributions by Partners
3. Profits and Surplus
(shared equally)

Front 28

Termination

Back 28

The final period when it is officially ended the partnership.

Front 29

Action of Accounting

Back 29

The partnership may recover losses caused by breach and also disgorge profits made by breaching partner.

Front 30

How are losses shared when partnership agreement is silent

Back 30

The rule of patnership law is that where no agreement is made losses will be shared in the same proportion as profits are shared.