Barbri, Agency & Partnership

Front 1

Agency Problems (3)

Back 1

1. Liability of Principal to 3Ps for Torts of an Agent; 2. Liability of Principal to 3P for Contracts entered into by Agent; 3. Duties which Agents owe to Principals

Front 2

Test for Liability of P to 3P for tort of A

Back 2

1. Does a Principal Agent relationship exist?; 2. Was the tort within the scope of the relationship?

Front 3

Principal-Agent Relationship, definition

Back 3

assent (of both), benefit (to P), control (of P)

Front 4

Assent, definition

Back 4

= informal agreement b/w P and A

Front 5

Benefit, definition

Back 5

= A's conduct is for P's benefit

Front 6

Control, definition

Back 6

= P must have the right to control A by having the power to supervise the manner of A's performance.

Front 7

Does a P have vicarious liability for sub-agents and borrowed agents?

Back 7

Generally, no. Sub-agents: usually a helper to A; there is NO ASSENT b/w P and SA. Borrowed agents: P has NO right to CONTROL BA

Front 8

What are Independent Contractors and do P's have Vicarious Liability (VL)?

Back 8

IC ∉ Agent b/c no power to supervice manner of performance. NO VL, BUT there are 2 exceptions: 1. Ultra-Hazardous Activity 2. Estoppel (holding out IC as A)

Front 9

Scope of Relationship Factors

Back 9

1. "Of the kind" of job (no IT); 2. "on the job" (detour v. frolic); 3. A intended to benefit P (even in part).

Front 10

Scope, Frolic v. Detour

Back 10

Frolic = new & ind. journey; Detour = mere departure from assigned task

Front 11

Agency and Intentional Torts

Back 11

IT are usu w/o scope. EXCEPTIONS, (EG, bouncer) where conduct was: 1. authorized; 2. natural (to job); 3. motivated by desire to serve P.

Front 12

Liability of P to 3P for Ks entered into by A, test

Back 12

P is liable for Ks entered into by it’s A if P authorized A to enter into the K

Front 13

Liability of P to 3P for Ks entered into by A, starting an essay

Back 13

"P will be liably only on its authorized Ks. In this case…" "Therefore, there will be [no] liability on this authorized K."

Front 14

Liability of P to 3P for Ks entered into by A, general rules

Back 14

If no authority → P not liable on K; A is. If authority → P is liable on K; not A. EXCEPTION: if P is partially disclosed (only P’s ID is concealed) or undisclosed (fact o P concealed), Authorized A may be liable at the election of 3P.

Front 15

Kinds of Authority (4)

Back 15

- Actual Express; - Actual Implied; - Apparent; - Ratification

Front 16

Actual Express

Back 16

Oral (except land > 1yr), private, narrowly construed.

Front 17

How can Actual Express authority be revoked?

Back 17

1. Unilateral act of either party, or; 2. Death or of P; 3. Incapacity of P, UNLESS P gives A a “durable power of attorney” (written expression of authority to enter into transaction)

Front 18

Actual Implied

Back 18

= no words; A reasonably believes P has given authority b/c of necessity, custom or prior dealings

Front 19

Actual Implied, Necessity

Back 19

There is an implied authority to do all tasks which are necessary to accomplish an expressly authorized task.

Front 20

Actual Implied, Custom

Back 20

There is an implied authority to do all tasks which are customarily performed by a person w/ A's title or position.

Front 21

Actual Implied, Prior Dealings

Back 21

There is an implied authority to do all tasks which A believes to be authorized to do from prior acquiesance from P (during prior dealings)

Front 22

Apparent

Back 22

1. P cloaked A in appearance of authority; and 2. 3P relied on that appearance of authority.

Front 23

Apparent, Secret Limiting Instruction

Back 23

where A has actual authority but P has limited it, if 3P unknowingly relies on A, P is liable though A's actions were outside the scope.

Front 24

Apparent, Lingering Authority

Back 24

where actual authority has been terminated but A continues to act on P’s behalf. P is liable until/unless P notifies 3Ps

Front 25

Ratification

Back 25

Authority can be granted after the K has been entered if: 1. P has knowledge of all material fact regarding the K, AND 2. P accepts it's benefits. NY DISTINCTION: ratification cannot alter terms of K; must be complete.

Front 26

Duties which Agents owe to Principals (3)

Back 26

Duty to: 1. exercise reasonable care; 2. obey reasonable instructions (∉ lie or break law); 3. loyalty.

Front 27

How can an Agent breach his duty of loyalty? (3)

Back 27

1. Self-Dealing: A cannot receive a benefit to the detriment of P; 2. Usurping P’s opportunity; OR 3. Secret profits.

Front 28

What are the issue areas of partnerships?

Back 28

1. Partnership Formation; 2. Liabilities (of partners to 3P; b/w partners); 3. Partnership dissolution

Front 29

General Partnership, definition.

Back 29

= association of 2+ persons who are carrying-on as co-owners of a biz for profit.

Front 30

General Partnership, prima facie evidence of

Back 30

the contribution of money or services in return for a share of profits is prima facie evidence of a general partnership in NY.

Front 31

General Partnership, formation

Back 31

none

Front 32

General Partnership, starting an essay

Back 32

"As a rule, general partners are liable for all partnership obligations including co-partner torts. In this case…"

Front 33

General Partners, liability

Back 33

Partners are agents of the partnership for carrying on usual partnership business; thus each individual general partner is personally liable for all obligations of the partnership.

Front 34

Incoming Gen Partners, liability

Back 34

NOT liable for prior debt (usu), BUT any money paid into the partnership by the new partners can be used to satisfy those prior debts.

Front 35

Outgoing Gen Partners, liability

Back 35

YES, retain liability on future debts until the die, UNLESS, notice of their withdrawal has been given to all known and even potential creditors.

Front 36

General Partners, liability by estoppel

Back 36

one who represents to a 3P that a partnership exists will be liable as if a partnership does exist.

Front 37

A partnership is bound by the following done by partners

Back 37

- Ks , w/ authority; - Torts, w/in scope of job

Front 38

Limited Partnership, definition.

Back 38

= 1 general partner + 1 limited partner

Front 39

Limited Partnership, formation

Back 39

File limited partnership that includes names of all general partners

Front 40

Limited Partnership, general partner

Back 40

Liability + control; liable for all limited partnership obligations but also have right to manage a business

Front 41

Limited Partnership, limited partner

Back 41

Limited liability; only liable for their own contributions. NY: may not manage the business or forfeit LP status

Front 42

Registered Limited Liability Partnership, Formation

Back 42

Register w/ state as RLLP and indicate which profession you will be practicing

Front 43

Registered Limited Liability Partnership, Liability

Back 43

No partner is liable for the partnership’s debts and obligations

Front 44

Limited Liability Company, Formation

Back 44

File articles of organization w/ State. NY: publish summary of articles once/week for 6 weeks in a row in 2 newspapers

Front 45

Limited Liability Company, Liability

Back 45

Members who are owners are not liable for debts and obligations of the company; Limited Liability, Tax, Liquidity, Life (events of dissolution)

Front 46

Partner Inter-relationship?

Back 46

Partners are fiduciaries of each other and the partnership (duty of loyalty w/ pertinent remedies)

Front 47

Partner's Share in Profits

Back 47

Share of profits and surpus is transferrable. No salary, but are compensated for winding up biz.

Front 48

Partner's Share in Profits, absent a contract

Back 48

Profits shared equally; AND Losses shared like profits

Front 49

Partner's Share in Specific Partnership Assets

Back 49

Equipment, land, leases owned (bought) by partnership are not transferrable via partner to 3P w/o partnership authority.

Front 50

Partner's Share in Management

Back 50

Right to vote is not transferable via partner to 3P; 1 partner = 1 vote (no matter the contribution)

Front 51

Priority of distribution

Back 51

All debts must be repaid, but in this order: 1. Outside Trade Creditors; 2. Inside Partner loans; 3. Capital Contributions. NOTE: Losses and profits shared equally by partners