Ba Corps With Matheson

Front 1

Define Agency

Back 1

fiduciary relationship which results from the manifestation by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act. Restatement of Agency § 1

Front 2

Apparent Authority

Back 2

power held by an agent or other actor to affect a principal’s legal relations with third parties when a third party reasonably believes the actor has authority to act on behalf of the principal and that belief is traceable to the principal’s manifestations

Front 3

With apparent authority, where does the action lie?

Back 3

The partnership may sue the agent if the agent has breached its fiduciary duties, duty of obedience is a big one.

A third party can sue for specific performance.

Front 4

Actual Authority

Back 4

when, at the time of taking action that has legal consequences for the principal, the agent reasonably believes, in accordance with the principal’s manifestations to the agent, that the principal wishes the agent to act

Front 5

With actual authority, where does an action lie?

Back 5

The partnership will take the loss and the agent will not be on the hook for the loss.

Front 6

List the fiduciary duties

Back 6

1. Care
2. Obedience
3. Loyalty
4. Disclosure/Confidence

Front 7

Elements of the agency relationship

Back 7

1. Fiduciary duties
2. Consent - both parties must agree, not necessarily contractual
3. Control - Agent must respond to the directions of the principle

Front 8

Qui facit per alium, facit per se

Back 8

one who acts thru another, acts for himself or herself

Front 9

Respondeat superior

Back 9

an employer is responsible for the actions of employees performed within the course of their employment

The largest agent-principle relationship is through the employer-employee relationship

Front 10

323A.0202

Back 10

The association of 2 or more people who are co-owners of a for-profit business (compare to LLC) are partners even if they did not intend to form a partnership

Sharing of profits does not automatically establish a partnership.

Front 11

323A.0308

Back 11

Liability of purported partner:

(1) Purported partner is liable to third party to whom representation was made. If liability results, purported partner is jointly and severally liable to that 3rd person.
(2) Purported partner is then an agent and can bind partnership in transactions. Though, remember the agency-principal relationship. While the partnership may be bound, the partnership can sue the agent for breach of fiduciary duties (or I suppose fraud).

Front 12

323A.0101

Back 12

This is the definition section. Under it:

Partnership – an association of two or more persons to carry on as co-owners a business for profit.

Front 13

323A.0103: Effect of partnership agreement

Back 13

If the partnership agreement does not cover, then the statute provides the default rules.

Front 14

323A.0103: Nonwaivable

Back 14

(i) vary rights and duties under 323A.0105 except to eliminate the duty to provide copies of statements to all of the partners
(ii) Unreasonably restrict the right of access to books and records under section .403(b)
(iii) eliminate the duty of loyalty under .404(b) or .0603(b)(3), BUT;
(a) the partnership agreement may ID specific types or categories of activities that do not violate the duty of loyalty, if not manifestly unreasonable; or
(b) all of the partners or a number or percentage specified in the partnership agreement may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that would otherwise violate the duty of loyalty
(iv) unreasonably reduce the duty o fcare under .0404(c) or .0603(b)(3)
(v) eliminate the obligation of good faith and fair dealing under .0404(d), BUT may prescribe standards by which performance of the obligation is to be measured, if standards not manifestly unreasonable.
(vi) vary the power to dissociate as a partner under .0602(a), except to require the notice under section 0601(1), to be in writing
(vii) vary the rt of court to expel a partner (.0601(5))
(viii) vary the requirement to wind up the P business 0801(4 – 6)
(ix) vary the law applicable to LLP under 0106(b)
(x) restrict rights of 3d parties under this chapter

Front 15

323A.0301

Back 15

Partner agent of partnership:

(1) Each partner is an agent to the partnership.
(2) An act is binding if carried out in the ordinary course of business; unless
(a) unless partner had no authority to act in that dealing AND
(i) could be limited in Partnership Agreement or by majority vote of all partners
(b) the 3rd party knew or should have known the partner lacked authority
(3) An act outside business is binding if other partners authorized the act only.

Front 16

323A.0305

Back 16

Partnership liable for partner’s actionable conduct: Partnership is liable under the doctrine of Respondeat Superior.
(1) Partnership liable for loss or injury to a person as a result of a wrongful act or omission, or other actionable conduct, if partner acted in the ordinary course of business of the partnership or with authority of partnership.
(2) If, in the course of the partnership's business or while acting with authority of the partnership, a partner receives or causes the partnership to receive money or property of a person not a partner, and the money or property is misapplied by a partner, the partnership is liable for the loss.

Front 17

323A.0306

Back 17

(1) .0306(a) Except as provided for in (b), all partners are liable jointly and severally for all obligations for the partnership unless otherwise agreed by the claimant or provided by law
(2) .0306(b) New partner not liable for acts done before that person became a partner
(a) however, their capital contribution is now part of the firm and therefore liable. Once you pay or promise to pay that amount to the firm, despite the fact that you are not personally liable, that amount is gone if the partnership becomes insolvent)
(3) .0306(c) Obligations (acts/debts) under contracts or notes incur upon entering into the agreement.

Front 18

323A.0703

Back 18

Liability of outgoing partner

(a) Not liable for obligations that occur after disassociation except
(b) A partner who dissociates without winding up the P/S business is liable as P to other party in transaction entered into by P/S within 2 years after the P’s dissociation, ONLY if P is liable for the obligation under 323A.0306 and at the time of entering into the transaction the other party:
(i) “reasonably believed that the dissociated P was then a P
(ii) did not have notice of dissociation, and
(iii) is not deemed to have knowledge under .0303(e) or notice under .0704(c)

Front 19

323A.0307

Back 19

Actions by and against P/S and partners

(1) Partnership can be sued as well as the partners.
(2) To recover from partner assets, a judgment must be brought against the partner individually.
(3) A judgment creditor of a partner cannot levy execution against partner’s personal assets to satisfy partnership judgment unless the partner is personally liable; AND
(a) judgment against partnership is not satisfied
(b) partnership is a debtor in bankruptcy
(c) partner agrees that creditor doesn’t have to exhaust partnership assets
(d) a court grants permission
(e) liability is on partner by law or contract independent of partnership.
(f) This includes Liability of Purported Partner.

Front 20

323A.0401(f) and (j)

Back 20

Partner's rights and duties

(1) (f) – Each partner has equal rights in the management and conduct of the partnership.
(2) (j) – Majority of partners decide differences that arise in ordinary business.
(a) Acts outside ordinary business must be unanimous.
(b) Amendment to partnership agreement must be unanimous