Agency/partnership

Front 1

Respondeat Superior/Vicarious Liability

Back 1

Will be liable for torts by A IF:
1) there is a Principal-Agent relationship; AND
2) tort committed withint the scope of the relationship

Front 2

P-A Relationship Requirements

Back 2

Assent;

Benefit;

Control

Front 3

Assent

Back 3

An informal agreement between the principal (who has capacity) and the agent

Front 4

Benefit

Back 4

Agent's conduct must be for the principal's benefit

Front 5

Control

Back 5

P must have the right to control through power to supervise the manner of performance

Front 6

P liability for Subagents

Back 6

None, no assent or control so no vicarious liability

Front 7

P liability for borrowed agents

Back 7

None, no right to control so no vicarious liability

Front 8

Independent Contractor distinction

Back 8

no right to control because no power to supervise manner of performance

Front 9

Independent Contractor liability

Back 9

None because no control; UNLESS:

1) Ultra hazardous activity

or

2) Estoppel - hold out IC as an agency, will be prevented from non-vicarious liability

Liable if non-delegable due to public policy concerns; (i.e. duty of businesses to keep premises/instrumentalities safe for customers)

Front 10

Agency Scope factors

Back 10

1) Conduct "of the kind" in job description? if in description, likely;

2) "on the job?" Frolic vs. Detour

3) A intend P benefit? - if even partial, in the scope

Front 11

Frolic definition

Back 11

new and independent journey, OUTSIDE the scope of agency

Front 12

Detour definition

Back 12

mere departure from an assigned task, WITHIN scope

Front 13

Intentional Tort Liability Generally

Back 13

generally outside the scope

Front 14

Intentional Tort Liability exception

Back 14

1) Authorized by P

2) Natural from nature of employment

3) Motivated by a desire to serve P

Front 15

P Liability for A contracts

Back 15

P is liable for contracts entered into by its agent ONLY IF P AUTHORIZED A to enter the contract

Front 16

Types of authority

Back 16

Actual express, actual implied, apparent, and ratification

Front 17

Actual Express Authority

Back 17

P used words to express authority to Agent

can be oral and private, but narrowly construed

Hint 17

Exception: If K itself must be in writing, then express authority must be in writing as well.

Land sales MUST be in writing

Front 18

Express Authority Revocation

Back 18

Unilateral Act of P or A, or Death/Incapacity of P

Hint 18

Exception: not revoked if P gives A a durable power of attorney, written expression of authority to enter into a transaction which has conspicuous survival language

Front 19

Actual Implied Authority

Back 19

Necessity - implied to accomplish an expressly authorized task

Custom - customarily performed by a person with A's title

Prior dealings - A believes to have been authorized to do from prior acquiescence

Front 20

Apparent Authority

Back 20

Two-Part Test:
1) P "cloaked" agent with appearance of authority, and
2) third party reasonably relies on authority appearance

Front 21

Ratification

Back 21

Authority can be granted after the K, if:
1) P has KNOWLEDGE of all material facts, AND
2) P accepts its benefits.

Hint 21

Exception - cannot alter terms of K

Knowledge and acceptance MUST BE COMPLETE

Front 22

Rules of P Liability on K

Back 22

Generally, P liable on its authorized K, and an authorized A is not liable for authorized K

Hint 22

If P is partially/completely undisclosed, authorized agent by be liable at election of the Third Party

Front 23

Agent Duties to Principal

Back 23

Reasonable Care
Obey Reasonable Instructions
Loyalty

Hint 23

Loyalty:
1) no self dealing
2) no usurping opportunity
3) no secret profits

Front 24

P recovery for A duty breach

Back 24

recover losses cause by breach, may disgorge profits made by breaching A

Front 25

General Partnership Formalities

Back 25

Non

Front 26

General Partnership Definition

Back 26

Association of two or more persons who are carrying on as co-owners of a business for profit (PROFITS are key)

Hint 26

Contribution of money/services in return for a SHARE OF PROFITS is prima facie evidence of a general partnership

Front 27

General Partnership Liability

Back 27

Partners are agents of the partnership, so liable for each partner's torts in scope of partnership and each partner's authorized K

Front 28

Incoming Partner's Liability

Back 28

Not liable for prior debts, but any money paid into Partnership can be used by partnership to satisfy prior debts

Front 29

Dissociating Partner's Liability

Back 29

Retains liability until actual NOTICE of their dissociation is given to known creditors AND until PUBLICATION given to all potential creditors

Front 30

General Partnership Liability by Estoppel

Back 30

One who represents to a third party that a GP exists will be liable as if GP exists

Front 31

General Partner duties to Partnership

Back 31

GPs are fiduciaries to other partners and partnership, so owe duty of LOYALTY - self-dealing, not usurp, no secret profits

Front 32

Partnership action for Accounting

Back 32

Partnership may recover losses caused by the breach and also may disgorge profits made by breaching partner

Front 33

Partnership Asset definition

Back 33

Equipment, land, leases which are owned only by the partnership as specific partnership asset

Share in management

Hint 33

no individual partner may transfer these assets without partnership authority - non-liquid

Front 34

Personal Property definition

Back 34

Owned by general partner;

Share of Profits and Surplus

Hint 34

may transfer their share - "liquid"

Front 35

Default Management Provisions

Back 35

Each partner gets EQUAL control absent an agreement

No salary absent an agreement, though can be compensated for helping to wind up

Front 36

Partner's Share of Profits/Losses

Back 36

Absent agreements, profits shared EQUALLY and losses shared like PROFITS

Front 37

Dissolution Definition

Back 37

Dissolves automatically upon any material change in the Partnership caused by death or withdrawal of any single general partner

Front 38

Termination

Back 38

Real end of the partnership

Front 39

Winding Up

Back 39

Period between dissolution and termination.

Remaining partners liquidate the partnership assets to satisfy the partnership creditors

Front 40

Liability during Dissolution

Back 40

Retain liability on all transactions entered into up to wind up

Retain liability on new business transactions during winding up until actual notice given to known creditors and publication to potential creditors

Front 41

Priority of Distribution Rule

Back 41

Each partner must be repaid loans and capital, plus share of profits or minus share of losses

Front 42

Priority of Distribution Levels

Back 42

1) Outside creditors
2) Inside Creditors
3) Capital contributions by partners must be paid
4) Profits/Surplus, if any

Hint 42

1) trade creditors/suppliers who are not partners

2) Partners loaned $ to partnership and have become creditors, receive interest

3) all $ paid in by the partners NOT in return for interest, MUST be fully repaid

4) profits shared equally without an agreement

Front 43

Profit Loss Note (hypo)

Back 43

B must be repaid $200 for capital, therefore A + B must both pay in $100 each, then partnership pays B $200

Front 44

Limited Partnership definition

Back 44

Partnership with at least one General Partner and at least one Limited Partner

Front 45

Limited Partnership Formation

Back 45

Must file with the state a limited partnership certificate that includes the names of all general partners

Hint 45

If not, then GP is formed by default

Front 46

Limited Partnership Liability/Control

Back 46

General Partners - liable for all LP obligations, but have right to manage/control business

Limited Partners - limited liability so not liable for debts, but may not manage the business without forfeiting their limited liability status

Front 47

Limited Liability Company definition

Back 47

hybrid between corporation and partnership in which owners ("members") have the same limited liability of shareholders and also benefits of partnership tax treatment

Front 48

LLC Formation

Back 48

Must file Articles of Organization

May adopt an operating agreement

Front 49

LLC Control

Back 49

Owners, like partners may control but also may delegate to a team of managers

Front 50

LLC Liquidity

Back 50

A full membership interest may not be transferred without unanimous consent of all members

Front 51

LLC duration

Back 51

Articles of Organization or operating agreement MUST indicate some event that will dissolve the LLC

Front 52

LLC Summary

Back 52

Limited Liability plus Limited Liquidity plus Limited Life plus Limited Tax