Agency And Partnership New York Bar Exam 2007

Front 1

When will a principal be vicariously liable?

Back 1

1. Principal-Agent Relationship Exists
a. Assent
b. Benefit
c. Control - supervision of manner of agent's performance
2. Agent was acting in the scope of that relationship

Front 2

Principal's Liability for Sub-Agents and/or Borrowed Agents?

Back 2

Must still have assent, benefit and control and be working within scope of authority.

Front 3

When is there vicarious liability for the torts of an independent contractor?

Back 3

Generally, there is no vicarious liability as do not have supervisory authority over manner of performance. Two EXCEPTIONS:
1. If IC engaged in ultrahazardous activity and commits tort (ex. break repair)
2. Estoppel - held out with appearance of agency

Front 4

How do we Determine the Scope of the Agent's Authority?

Back 4

Three-part test:
1. was conduct of type agent hired to perform?
2. did tort occur on the job (frolic v. detour)
3. Did agent intend to benefit the principal?

Front 5

When are intentional torts of an agent within the scope of employment?

Back 5

IF:
1. specifically authorized by principal; or
2. natural from the nature of employment; or
3. motivated by a desire to serve the principal.

Front 6

When in the Principal Liable for Contracts entered into by the agent?

Back 6

If agent was authorized by principal; four types of authority:
1. actual express
2. actual implied
3. apparent authority
4. ratification

Front 7

What is actual express authority & when is it revocable?

Back 7

Principal used words (oral or written unless Statute of Frauds would apply to contract, in which case authorization must also be written)
2. Revocable at unilateral act of either party or death/incapacity of principal (unless agent has durable power of attny)

Front 8

What is actual implied authority?

Back 8

authority agent reasonably believes principal has given because of necessity or custom or prior dealings

Front 9

What is apparent authority?

Back 9

1. Principal cloaked agent with appearance of authority PLUS
2. Third party reasonably relies on appearance of authority

Front 10

Ratification

Back 10

Principal has knowledge of material facts AND accepts benefits of the contract

Front 11

When may an authorized agent be liable on a contract?

Back 11

Generally, if agent had authority, is not liable. BUT, if principal was partially or fully undisclosed, authorized agent may be personally liable at the election of the third party.

Front 12

Duties owed by agent to principal

Back 12

1. Duty of Care
2. Duty to Obey Reasonable Instructions
3. Duty of Loyalty
a. no self dealing
b. no secret profits
c. no usurping of principal's opportunities

Front 13

What are the remedies available for breach of an agent's duties?

Back 13

1. disgorge profits
2. recovery of losses caused by breach.

Front 14

What are the requirements to form a partnership.

Back 14

No formal ones; look at conduct alone.
1. Sharing of profits is prima facie evidence of a partnership.

Front 15

What is the definition of a partnership?

Back 15

an association of two or more persons carried on as co-owners of a business for profit.

Front 16

What are the applicable agency principals to partners?

Back 16

1. bound as agents of partnership
2. bound by torts committed by partners acting within scope of authority
3. bound by contracts entered into by partners with authority

Front 17

What are the characteristics of general partners?

Back 17

1. personally liable for the debts of the partnership
a. liability remains until death UNLESS notice of withdrawal provided to ALL potential creditors
2.

Front 18

How do you form a Limited Partnership?

Back 18

1. file certificate of partnership with Dept. of State including names of all general partners

Front 19

Characteristics of a Limited Partnership

Back 19

1. at least one general member and one limited member.
2. limited members not personally liable for debts of partnership, but CANNOT exercise managerial control

Front 20

What are the characteristics of a registered limited liability partnership?

Back 20

1. general partnership engaged in professional services
2.no partner is personally liable for debts of business form, but each remains liable for his own wrongdoing and for the wrongdoing of those under supervision

Front 21

How do you form a Registered Limited Liability Partnership?

Back 21

register certificate of registration with department of state to perform professional services

Front 22

What are the characteristics of a Limited Liability Company?

Back 22

1. get similar liability to corporation, but with tax benefits of partnership
2. Members, who are owners, are not personally liable for company's debts
3. Members control, but may delegate to Managers
4. Limited Liquidity of membership interests
5. Limited Life

Front 23

How do you form a Limited Liability Company?

Back 23

1. file articles of organization with Dept. of State
2. public summaries of the articles once a week for 6 weeks in a row in 2 newspapers

Front 24

Duties Owed by Partners in Partnership

Back 24

1. no self dealing
2. no secret profits
3. no usurping of opportunity
4. duty of care and loyalty

Front 25

What is the remedy for the breach of a duty by a partner?

Back 25

Action for accounting - disgorge profits and recover losses caused by breach.

Front 26

What are partner's rights in specific partnership assets?

Back 26

No individual partner may transfer these to a third party.

Front 27

What are partner's rights in share in management?

Back 27

owned by partnership. Individuals can't transfer these to third party

Front 28

If there is a conflict as to whether something is a partnership asset or personal asset, what should you look at?

Back 28

whose money was used to buy the property?

Front 29

How is a partnership managed?

Back 29

Absent agreement, each partner entitled to equal control.

Front 30

Do partners get a salary?

Back 30

Absent agreement, no, except for helping to wind up after dissolution.

Front 31

What is the basic rule for partner's share of profits?

Back 31

absent agreement, share in profits equally

Front 32

What is rule for partner's losses absent agreement?

Back 32

Share in the same way as profits.

Front 33

What constitutes dissolution?

Back 33

any material change in the partnership, caused by death or withdrawal of a partner

Front 34

What is termination?

Back 34

the real end of a partnership

Front 35

What is winding up?

Back 35

period between dissolution and termination in which partners help liquidate assets to satisfy creditors

Front 36

Do partners receive compensation for winding up?

Back 36

yes

Front 37

Partnership's Liability for Winding up

Back 37

1. If Old Business: partnership, and thus all individual partners, liable on all transactions to wind up old business
2. Retain liabiliy on new transactions UNTIL notice of dissolution given to all known and potential creditors

Front 38

What is the priority of distribution at wind up?

Back 38

1. creditors must be paid first.
a. outside non-partner creditors
b. insiders who have loaned money to partnership
2. capital contributions by partners must be paid (must make full restitution so individual partners may be liable on this)
3. profits and surplus if any share equally
4. remaining losses shared equally.