Bar Exam: Agency + Partnership

Front 1

Agency definition:

Back 1

the legal relationship whereby an agent is authorized to represent a principal in business dealings with third parties

Front 2

Requirements for a valid agency relationship to exist

Back 2

1. Full contractual capacity of principal 2. minimal mental capacity of agent 3. consent of both parties

Front 3

Duties of an Agent

Back 3

1. express contractual duties 2. fiduciary duties of loyalty, obedience to reasonable directions, and reasonable care under the circumstances (including the duty to disclose all relevant info)

Front 4

Principal's remedies

Back 4

contract actions, tort actions, actions for secret profits, equitable actions for an accounting, and withholding of compensation for intentional torts and intentional breaches of fiduciary duty

Front 5

The Principal-agent relationship requires: ABC

Back 5

1) assent (can be informal); 2) benefit (the agent's conduct must be for the principle's benefit; 3) control (the principle must have the right to control the agent by having the power to supervise the manner of the agent's performance)

Front 6

Sub Agents: Will the principle be vicariously liable for torts?

Back 6

Only if there is assent, benefit, and control. Typically, the principle does not assent to the sub agent's help and does not have the right to control the sub agent.

Front 7

Borrowed Agents: Principle vicariously liable?

Back 7

Only if assent, benefit, control. Typically there is no control.

Front 8

Exceptions for no liability for independent contractors?

Back 8

1. ultra hazardous (ie brake repair) or inherently dangerous activities; 2) estoppel (holding out the ind. contractor with the appearance of agency)

Front 9

Exceptions for no liability for intentional torts of agents?

Back 9

1) conduct authorized by the principal; 2) natural from the nature of employment; or 3) motivated by a desire to serve the principal

Front 10

Four types of authority?

Back 10

actual express, actual implied, apparent, and ratification

Front 11

Actual express authority?

Back 11

P uses words to express authority to agent, can be oral and private. Revoked by unilateral act of P or A or death/incapacity of P.

Front 12

Actual implied authority?

Back 12

Authority which the P gives the A through conduct or circumstance. 1) Necessity-all tasks necessary to accomplish expressly authorized task; 2) custom-tasks customarily performed by persons with that A's title or position; 3) prior acquisence-infer ongoing implied authority from silence

Front 13

Apparent authority? two part test

Back 13

1) P cloaked A with appearance of authority; and 2) third party reasonably relies on appearance of authority

Front 14

Ratification?Ratification?

Back 14

Authority granted after contract entered into if: 1) principal has knowledge of material facts regarding contract, and 2) principal accepts the benefits. BUT ratification cannot alter terms of contract (narrowly construed)

Front 15

Duties that agents owe principals?

Back 15

1) duty of care; 2) duty to obey instructions that are reasonable; 3) duty of loyalty (self-dealing, secret profits, usurping principal opportunity)

Front 16

Partner's rights in Partnership property and liquidity

Back 16

1) Specific partnership assets (no unilateral transfers); 2) Share of profits (transferable); 3) Share in management (not transferable)

Front 17

Partnership management rights?

Back 17

Absent an agreement, each partner is entitled to EQUAL vote, regardless of money contribution. Majority vote governs ordinary partnership matters, but unanimous consent required for fundamental partnership matters.

Front 18

Partner's share of Profits and losses

Back 18

1. Absent an agreement, PROFITS SHARED EQUALLY; 2) Absent an agreement, LOSSES SHARED LIKE PROFITS

Front 19

WHEN does a partnership dissolve?

Back 19

Absent an agreement, a GP dissolves upon notice of the express will OF ONE GP to disassociate

Front 20

Priority of GP distribution upon dissolution?

Back 20

1) creditors; 2) capital contributions paid into partnership by partners; 3) profits shared equally, absent agreement

Front 21

Limited nature of LLCs?

Back 21

Limited life (operating agreement must indicate events of dissolution) Limited liability, and Limited liquidity (can't transfer interest without unanimous consent)