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35 Cards in this Set
- Front
- Back
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When is a Principal liable for the torts committed by his agent?
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When a principal agent relationship exists (Assent, Benefit, and Control) and the tort was committed by the agent within the scope of that relationship.
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Why aren't subagents and borrowed agents normally considered agents?
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Because the Principal rarely has control over them. And only sometimes assent.
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What is an Independent Contractor and what is the rule on liability of the principal?
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IC's you have no control over bc you have no power to supervise the manner of the performance. Hence no vicarious liability.
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What are the exceptions to the rule of no vicarious liability for ICs?
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1.) The ultrahazardous activity exception
2.) Estoppel- if the IC is held out to the world with the appearance of agency, you will be estoped from saying he's not your agent. |
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What is the difference between Frolic and detour and under what context does it arise?
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We are talking about whether the tortious act of an agent occurred with the scope of his employment. Frolic is a new and independent journey outside the scope of agency. Detour is a mere departure from an assigned task, still w/ in the scope
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True or false, there will always be assent, benefit and control between employers and employees?
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True. So then the key to liability is scope.
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Is a principal liable for the intentional torts of his agent?
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As a rule, no. But there are 3 exceptions: if specifically authorized bythe principal, if arising from the nature of the employment, and if motivated by a desire to serve the principal
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Are principals liable for contracts entered into by agents?
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They are if they authorized the agent to enter the contract.
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What are the 4 types of authority
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Actual express, actual implied, apparent, or ratification.
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When are oral words not enough to give the authority to an agent to enter into a contract?
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Land. If the K involves the conveyance of land, you need to put it in writing.
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How can actual express authority be revoked?
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Unilateralact of either party
or death or incapacity of the principal. |
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What are the three ways to create actual implied authority?
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Authority which agent reasonably believes the principal has given are formed by 1) necessity (authority to do all that is necessary to accomplish an expressly authorized task) 2) custom 3) prior dealing
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What is the 2 part TEST of apparent authority?
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1) Principal cloaked agent with the appearance of authority and 2) 3rd party reasonably relies on appearanceof that authority.
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What are the two TYPES of Apparent Authority?
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1. Secret Limiting instruction (don't sell the clock, he sells, the clock, im bound)
2. Lingering Authority (you buy books for me, you're fired, i don't tell customers, you buy a book for me, im bound) |
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What is ratification?
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Its another way to give your agent authority to enter into a contract. The keys are knowledge by principal of all material facts and accepting its benefits. The key is, ratification can't alter the terms of the contract at all.
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What are the rules on liability on the contract?
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If no authority, principal is not liable, agent is. If authortiy, principal is and agent isnt.
If partially or un disclosed, authorized agent might be liabile at the election of the 3rd party. |
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What are the 3 duties of loyalty by an agent to a principal?
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No self dealing
No usurping principal's opportuniities No secret profits (disgorge and recover losses) |
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What's do you need to have a general partnership?
What is prima facie evidence of a GP? |
No formalities necessary, its 2 people carrying on as coowners of a business for profit. The contribution of capital or services in return for a share of the profits is prima facie evidence of a GP
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Do Agency Principles Apply to partners?
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Yes, Partners are agents of the partnership for carrying on usual partnership business.
partners are bound by torts committed by other partners in scope of partnership business partnership is bound by contracts entered by partners with authority. |
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Are incoming partner's liable for pre-existing debts of others?
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No. but any money paid into the partnership may be used by the partnership to satisfy prior debts
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Are outgoing partner's liable for subsequent debts?
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Yes, even on future debts until they die unless notice of their withdrawal has been given to all knowna and even potential creditors.
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What is and how do you form a limited partnership
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Defined as at least 1 gp and at least 1 LP.
To form, file a certificate w/ the dept of state of NY and include names of all general partners. |
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What type of liability and control to GP and LPs have in a LP
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GPs get personal liability, but also managerial power.
LPs get limited liaibliy but no management control. |
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What is a registered limited liability partnerships?
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File a certificate of registration w/ dept of state and under a RLLP, no partner is liabile for the debts and obligation of the business form. Are mainly for those engaged in professional service.
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what are LLCs?
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Best of both worlds. partnships taxatio and corporation limited liability. .
To form, fille articles of organization and summarize those articles once a weeek for 6 weeks in 2 newspapers. |
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What are the partnership characteristics of an LLC?
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1. members control but may delegate to managers
2. LImited liquidity- members interests are not freely trasnferrable 3. Limited life. - events of dissolution. |
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What happens if partners violate thier fidicuiary duty of loyalty to each other?
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In NY it gives rise to an action for accounting. They may recover losses casued by the breach and may also disgorge profits made by the disloyal partner.
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Match up the ownership rights in a partnership for the following:
land, leases equipment owned only by the parnership assets Share of Profits and Surplus Share in Management |
Specific Partnership Assets
Owned By partner Asset owned only by the partnership itself (may do so with unanimous consent of the other partners) Watch out for an example where partner buys it and uses it for partnershp business. IN that case, partner still owns it. |
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Absent an agreement in a partnership
(4 things) |
Equal control, no salaries, equal profits, and losses like profits.
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Define dissolution:
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Any material change in the partnership, triggers windup
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What is the priority during dissolution?
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1. OUtside creditors
2. All inside creditors 3. Captial contributors. 4. Profits if any shared All minus the LOSSESE |
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What is the distribution rule?
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Each partner receives their loans and capital contributions. Plust their share of profits, but also minus their share of the loss.
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What is wind up?
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PEriod bw dissolution and termination in which remaining partnersmust liquidate the partnership assets to satisfy the partnerships creditors.
When notice is given to all known and potential creditors, there'sno more liability. Until then, full liability for everything for all partners. |
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Can a partner assign his interest in the partnership to a 3rd party?
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Yes. Its interest is personal property and may be sold or assigned by her. it consists of a right to share profits, any distribute d surplus and a share of proceeds after dissolution
But a partner's interest as tenant in partnership is nontransferable. Additionally each partner has a right to particpate in the managment of the partnership, which is equal to the rights of all other partners- one partner, one vote. A partner's righ to participate in managment of the partnership is not assignable. |
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What is the remedy for a partner who has a claim against the partnership or another partner?
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An action of accounting. The general rule is that a partner may not sue the partnership.
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