Agency/partnership Flashcards

Front 1

AGENCY

Back 1

The legal rel whereby an agent is auth to rep a principal in business dealings with 3rd parties

Front 2

Elements of agency

Back 2

1. contractual capacity
2. consent of both parties
3. writing gen not req'd (exception: land, S of F Ks)
4. consideration NOT req'd

Front 3

Bases for creating agency rel

Back 3

1. actual auth
2. apparent auth
3. ratification
4. operation of law (estoppel, statute)

Front 4

Agent's duties to principal

Back 4

1) Express contractual duties
2) Fiduciary duties of loyalty
3) obedience to reas directions,
4) and reas care under the circs (incl duty to disclose all relevant info)

Note - reasonableness may vary b/c compensation is a proper circ to consider

Front 5

Principal's remedies

Back 5

1) K remedies (if agent compensated)
2) Tort remedies
3) Actions for secret profits
4) Equitable actions for acctg (constructive trust), and
5) withholding compensation for intentional torts or intentional breaches of fid duty

Front 6

Agent liability for subagents

Back 6

Agent has absolute liability to the prin for breaches by a subagent

Front 7

subagents duties to agent and principal

Back 7

If apptd with proper auth, the subagent owes the prin the same duties as the agent.

If the subagent is unauth, he owes no duties to the principal but does to the agent.

Front 8

Principal's duties to agent

Back 8

1) duties imposed by K
2) reas compensation
3) reimbursemt for expenses
4) Cooperation and no unreas interference with the agent's perf
TIP: if the agency agmt is silent re: compensation, the agent it entitled to reas compensation. Prin gen owes no duty to compensate a subagent even if the agent had auth to hire the subagent.

Front 9

Agent's remedies for principal's breach of duty

Back 9

1) Compensated agent has the usu K remedies against the prin, but has a duty to mitigate dmgs.
2) Rt to a possessory lien for any $ due from the prin, incl compensation owed for other svcs.

Front 10

Actual authority

Back 10

Auth that the agent reas believes she possesses based on the prin's dealing with her. Express or implied.

Front 11

Implied actual authority

Back 11

That which the agent reas believes she has as a result of the prin's actions.

Front 12

Implied actual authority includes:

Back 12

a) Incidental to express auth;
b) Arising out of custom;
c) Resulting from prior acquiescence by the prin;
d) To take emergency measures;
e) To delegate auth w/ ministerial acts, circs req, or perf is imposs w/out deleg, or where customary;
f) To pay for and accept deliv of goods where there is auth to purchase
g) To give gen warranties as to fitness, grant customary covenants in land sales, collect pymt, and deliver where there is auth to sell, h) To manage investments

Front 13

Termination of actual authority - occurs when:

Back 13

a) Lapse of a specified or reas time
b) The happening of a specified event
c) Change in circs
d) Agent's breach of fid duty
e) Either party's unilateral term
f) Operation of law

Front 14

Apparent authority

Back 14

Arises from reas beliefs of 3rd parties. If prin directly or indirectly holds out another as possessing certain auth, thereby inducing reliance by others, the person so held out has apparent auth. TIP: in an app auth situation, discuss what transpired bet the principal and the 3rd party - what did prin do to indicate the agent had auth?

Front 15

Inherent authority

Back 15

- results in the prin being bound even though the agent had no actual auth to perform the particular act. Cts want to protect innocent 3rd parties. 2 situations:

i) Respondeat superior - w/in scope of employment
ii) Conduct similar to that authorized

Front 16

Types of apparent authority

Back 16

1. agent w/ no actual auth (impostors, lingering apparent auth)

2. agent exceeds actual authority (prior acts, position customarily carries that responsibility)

3. inherent authority - think respondeat superior, conduct must be similar to that authorized

Front 17

ratification

Back 17

- where "agent" has no auth at all, but "prin" subsequently validates the act and becomes bound. Gives the transaction retroactive effect unless the "prin" lacked contractual capacity at the time the "agent" entered into the unauth trans.

Front 18

Prereqs of ratification - unilateral act of the principal, reqs no consid

Back 18

1) Principal must know all material facts
2) Accept the entire trans
3) Have capacity

Front 19

Liability of Principal to 3rd party

Back 19

Prin will be liable to the 3rd party on a K entered into by agent if agent had valid auth to act

Front 20

Liability of agent to 3rd party

Back 20

depends on whether the principal was disclosed.

Disclosed - (existence and ID known to 3rd party) = always liable on the K. Agent gen not liable. Exceptions (2)

Partially disclosed and undisclosed principals - (partially = existence known but ID is w/held; undisclosed = ID & exist not known) liab for both the prin and agent. If 3rd pty obtains a jgmt against the agent w/out knowledge of the prin's id, he can later sue the prin when her id is discovered if the judgment has not been satisfied.

Front 21

3rd party liability to principal and agent

Back 21

1) Disclosed - only the prin, not the agent, may enforce the K and hold 3rd pty liable

2) Partially disclosed and undisclosed prin - either the prin or agent may enforce the K and hold 3rd pty liable. Prin may not enforce the K if there has been an aff fraudulent misrep of the prin's ID

Front 22

Liability of principal for torts of agent

Back 22

RS imputes joint and several liability to the employer/prin for torts committed by the ee/agent w/in the scope of ee's employment.

Front 23

P'ship

Back 23

- an association of 2 or more persons (can be indiv, trust, corp, other p'ship, or other entity) to carry on as co-owners a business for profit. Based on law of K and agency.

Front 24

Proving p'ship existence

Back 24

Look to the intent of the parties
1. Sharing of profits = presumption of p'ship (rebuttable by other factors indicating a p'ship not intended)
2. Evid indicative of p'ship (but not determinative)
1) Title held in JT or TIC
2) Parties designate their rel as a p'ship
3) Venture undertaken reqs extensive activity
4) Sharing of gross returns

Front 25

Liability of other person held out as partners

Back 25

i. Person holds self out - liabilty to 3rd parties who extend credit to the actual or apparent 'pship in reliance on the rep

ii. Person held out by another - no liability w/out person's consent

Front 26

Partnership property - titled

Back 26

Under RUPA, titled property is deemed p'ship property if:
a) Titled in p'ship name
b) Instrument trans title notes the titleholder's capacity as a partner or the existence of a p'ship
c) If purch w/ p'ship funds = rebuttably presumed to be p'ship property

Front 27

Partnership property - untitled

Back 27

Common Law. Cts will look to following criteria which tend to indicate that the property was intended to be p'ship property

Using p'ship funds to
1) Acquire prop
2) maintain prop
3) improve prop
4) Use of the prop by the p'ship in doing biz
5) Prop in the p'ship books as a p'ship asset
6) Close rel bet the prop and the biz ops

Front 28

Rights of partners

Back 28

1. management
2. distribution
3. remuneration
4. indemnification
5. contribution
6. inspection
7. lawsuits
8. settlement of acct on dissolution

Front 29

fiduciary duties of partner

Back 29

1. duty of loyalty
2. duty of care

Front 30

Apparent authority & RUPA

Back 30

RUPA provides that
a) the act of any partner
b) for apparently carrying on in the ord course the p'ship biz or biz of the kind carried out by p'ship,
c) binds the p'ship unless:
i) partner had not auth to act for the p'ship in that way, and
ii) 3rd party actually knew or had rec'd notification that the partner lacked auth.

Front 31

when does partner have notice of fact?

Back 31

partner has notice of a fact when 1) actual knowledge of the fact, 2) notification of the fact, 3) reason to know of the fact based on the surrounding circs. Notice is imputed to p'ship immediately unless the partner having notice participating in fraud against p'ship

Front 32

Partner's liability

Back 32

Partners are liable for all K's entered into by a partner in the scope of biz or w/ auth of the p'ship. Also liable for all torts committed by any partner or emp of the p'ship w/in the ord course of p'ship biz or w/ auth of the p'ship

Front 33

incoming partner liability

Back 33

not liable for obligations incurred by the p'ship before the person became a partner

Front 34

outgoing partner liability

Back 34

liable for obligations arising while he was a partner unless pymt, release, or novation.

Front 35

Dissociation triggers

Back 35

1) Partner's express will to w/draw
2) Happening of an agreed event
3) Expulsion of the partner pursuant to agmt
4) Partner's bankruptcy
5) Death or incapacity
6) Appt of receiver
7) Term of a biz entity that was a partner

Front 36

Dissolution triggers

Back 36

1) Notif by any partner of an intent to w/draw in a p'ship at will
2) If p'ship for term or undertaking, exp of term, consent of all partners to dissolve, or w/in 90 days after partner's death, bankruptcy or wrongful dissoc, at least half of the remaining partners wish to dissolve
3) Happening of an agreed to event
4) Happening of an event that makes it unlawful for p'ship to cont
5) Issuance of judicial decree on application by a transferee or partner

Front 37

order of distribution of assets

Back 37

i. Creditors
ii. Partner's accts (capital contributions)
iii. Profits and surplus, if any

Front 38

LLPs

Back 38

RUPA allows for creation. LLP partners are not personally liable for the LLP's obligations

Front 39

Limited partnerships

Back 39

One or more general partners, and one ore more limited partners. Gen partner - personally liable for p'ship obligations, ltd partner gen does not have any liability beyond contribution.