Business Law Exam # 3

Front 1

characteristics of agency

Back 1

paid continously, works continously, has supervision, uses employees equipment

Front 2

characteristics of independent contractor

Back 2

paid by job, works till job is finished, has own business

Front 3

what 2 instances do you have to put agency in writing

Back 3

real estate, cant perform in 1 year

Front 4

agent must have ___ to ptinciapl, which means obey the principal and obey reasonable things to do

Back 4

obedience

Front 5

agent must have ____ to principal, which means duty to use due care

Back 5

dilligence

Front 6

agent has duty to _____, which means keep princiapl informed about info

Back 6

provide information

Front 7

fudiciary duty of loyalty is...

Back 7

loyalty of agent to principal

Front 8

secrety profit

Back 8

somebody gives agent to much money and agent puts it in personal account

Front 9

commingling

Back 9

do not mix up agents assets with principals assets

Front 10

conflict of interest

Back 10

ever faced with conflict of interest you should always disclose it to principal IN WRITING

Front 11

penalty for breaching fudiciary duty to principal

Back 11

even though sometimes there's no damages you can still lose case

Front 12

what are duties for principal to agent

Back 12

1) compensation- reasonably for time
2) reimbursement- for anyt expenses you reasonably incur'
3) indemnification- reiumbrsement for any losses
4) safe conditions- safe working conditions

Front 13

Federal employment law (OSHA)

Back 13

safe working conditions

Front 14

destruction of subject matter

Back 14

when agent finds out subject matter is destroyed, thats when agency ends

Front 15

bankruptcy

Back 15

if agency depends on principals credit ability, agency ends

Front 16

death

Back 16

death of principal terminates agency, agency ends at point principal dies. EXample: if p[rincipal dies and 30 minutes later agent puts contract out for principal. Then agent is responsible because principal has died.

Front 17

chance in business conditions

Back 17

when the agent learns of change, agency ends

Front 18

in order for the principal to be liable on a contract entered into by the agent, there must be ____ or ____ authority

Back 18

actual , apparent

Front 19

actual authority

Back 19

determined form the reasonable perspective of the agent

Front 20

apparent authority

Back 20

determined from the reasonable perspective of agent

Front 21

how principal with actual authority terminates agent

Back 21

fire the agent

Front 22

how principal with apparent authority terminates agent ( apparent is seen from 3rd person)

Back 22

send customers a letter stating person has been fired

Front 23

constructive notice

Back 23

affidative or publicatino put in newspaper

Front 24

ratification- agent doing something without authority but _______

Back 24

the principal likes it so they ratify it

Front 25

respondeat superior doctrine

Back 25

in order for the principal to be liable for the negligence of the agent

Front 26

2 requirements for respondeat superior

Back 26

must be agent, tort occured within the scope and course of the agency

Front 27

agent can be liable for contract unless

Back 27

person has authoirty and principal is fully disclosed

Front 28

warranty of authority

Back 28

implied warranty of authoirty when agent signs contract for principal

Front 29

disclosed principal (stating there is a principal)

Back 29

if it is undisclosed, 3rd party can hold either agent or principal responsible

Front 30

partially disclosed principal-

Back 30

if it is partially, agent and principal can be jointly or separately responsible

Front 31

undisclosed principal

Back 31

not wanting 3rd party to know there is a principal
example: walt disney is wanting to buy new land. agent doesn't tell person sellin walt disney is buying because price of land might go up

Front 32

definition of partnership

Back 32

association of 2 or more persont to carry on as co-owners of a business for a profit

Front 33

general partnership

Back 33

liability on contracts ( unlimited liability
liability in tort

Front 34

limited partnership

Back 34

only liable for investment in company
limited could become general if you start showing control

Front 35

formation of partnership requirements

Back 35

say how long it lasts, specify capital accounts (keep track of partners contributions

Front 36

terms in the partnershijp agreement. write a _____continuation agreement stating...

Back 36

right for other partners to continue company if one wants out.
state formula valuation which is formula to decide how much company is worth
state if someone leaves and gets money for leaving.. if its under certain ammount they receive lump sum. if its over they will get paid monthly or weekly or annually

Front 37

co-ownership

Back 37

association of 2 or more persons to carry on as co-owners for profit

Front 38

business

Back 38

an ongoing series of transactions

Front 39

sharing profits

Back 39

unless stated in contract ( 80 , 20,, etc) owners split profits

Front 40

sharing losses

Back 40

works the same way as profits

Front 41

with due care

Back 41

you cannot as a partner be negligent, reckless, or anythign illegal

Front 42

if you breach fudiciary duty you might find yourself guilty until

Back 42

proven innocent

Front 43

partner cannot compete with

Back 43

partnetship

Front 44

compensation for partners

Back 44

should make separate employment agreement

Front 45

rent

Back 45

only if you have them sign a lease

Front 46

ordinary operating, businessdecisions need a vote of

Back 46

majority vote

Front 47

big decisions for company example being adding new partner would need _____ vote

Back 47

unanimous

Front 48

stalemate of voting

Back 48

2 for 2 against, to end stalemate must petition court to end it

Front 49

how to enforce rights

Back 49

inspect books- think somebody is cheating , ask court for an equitable proceeding called accounting
accounting- look at the books to see if number is correct

Front 50

if you represent yourself as a partner or consent to respresent yourself as a partner you are a partner by ____

Back 50

estoppel

Front 51

if conflict of interest person needs to have ____

Back 51

consent of partnership

Front 52

disassociation of company occurs when these happen (acts of partners)

Back 52

breach by partner-requires at least 50 percent vote
agreement of partners- agree to call off
time expires- time of p'ship expires
expulsion of partner- requires more than 50 percent to dissolve

Front 53

disassociation of company occurs when these happen (operation of law)

Back 53

death- requires more than 50 percent to dissolve
bankruptcy- requires more than 50 percent to dissolve
retirement- partner responsible for debt still owed unless you get novation signed
unlawful- must dissolve

Front 54

disassociation of company occurs when these happen (court decree)

Back 54

insanity- petition a court for disassociation
deadlock- must dissolve
misconduct- one is cheating- one dissolve

Front 55

what is winding down?

Back 55

selling assets to dissolve company
liquidation
creditors paid- inside and outside creditors have same priority
distributions to partners- loans plus capital plus profit

Front 56

marshaling assets

Back 56

bankruptcy code- partnership creditors get first chance of partnerships assets. any left of assets goes to outside creditors. personal creditors of partners get first chance of peoples personal assets

Front 57

primary advantages of corporations

Back 57

-centralized management (managers run daily operations
-liability of owners limited to amount of investment
-continuity of life
-free transferability

Front 58

Disadvantages of corporations

Back 58

-cost (formation costs double taxation)
-formality

Front 59

rights of corporation are same as _____

Back 59

human...
1. due process
2. equal protection
3. search and seizure (warrant)
4. self incrimation

Front 60

types of corporations are ____and _____

Back 60

public- organized to carry out political/governmental duties example being city government
private- organized to carry out private/profitable duties

Front 61

with publicly held profits usually go to _______

Back 61

shareholders

Front 62

you need a ______ if you are incorporated in another state which you are conducting business

Back 62

certificate of authority

Front 63

in closely held there is a ____number of shareholders

Back 63

small

Front 64

buy-sell agreement with closely held corporation you need a _____

Back 64

stock transfer agreement

Front 65

in a professional buy-sell agreement all shareholders are ____ _____ of that particular profession

Back 65

liscensed members

Front 66

if you are a promoter you are (three things you are liable for)

Back 66

liability of promoter to third parties
2. liability of corporation
3. liability of promoter to corporation and shareholders

Front 67

subscribers, you need a _________

Back 67

stock subscription agreement

Front 68

contents of articles one thing is ____ points which is registered agent and addresses number of shares issued, name and adress of each of the incorporation

Back 68

planning points

Front 69

who decides who the directors will be in a corporation? and how many officers at minimum? what are they?

Back 69

shareholders
4 at a minimum, pres, vp, treasurer, secretary

Front 70

under what act does articles ahve to be filed with state covernment to make corporation official?

Back 70

revised model act

Front 71

what is de jure

Back 71

corporation that has been filed with state government

Front 72

de facto,
if corporation is de facto who can go after corporation

Back 72

there was a good faith to comply w/ state law but there was a mistake
state government

Front 73

defective

Back 73

has to have been a willful failure

Front 74

what is "piercing the corporate veil"

Back 74

let the creditors through to the shareholders assets

Front 75

what are some reasons for piercing the corporate viel

Back 75

insufficient capital
lack of corporate formalities

Front 76

what are types of formalities

Back 76

meetings
minutes
not comminglign assets

Front 77

parent-subsidiary situations

Back 77

if subsidiary is having fraut, creditors cant get to parent corporation

Front 78

statutory corporate powers

Back 78

corporate powers through state statutes

Front 79

expressed corporate powers-

Back 79

stated in words in the articles of the corporation

Front 80

implied powers of corporation

Back 80

whatever powers is needed to carry out corporate purpose

Front 81

ultra vires

Back 81

beyond or outside scop of the powers

Front 82

1 ways to use ultra vires for advantage of corporation

Back 82

the corporation can say they shouldn't ahve gotten into deal because it's outside of corporations authority

Front 83

corporate crimes

Back 83

usually involves a fine or management having to do community service.

Front 84

an agency contract appointing the agent must be in writing if the agent is appointed for more than ____

Back 84

1 year

Front 85

if you hear an independent contractor to do something dangerous could the company be liable for damages?

Back 85

yes

Front 86

retired partner can or cannot just put novation in the news paper stating retirement to avoid all charges

Back 86

false. cannot

Front 87

promoters have fiduciary relationship with the corporation

Back 87

true

Front 88

examples where agent breaches fiduciary duty to the principal

Back 88

agent makes secret profit
competes with principal
agent uses information obtained in the course of the agency for his personal benefit

Front 89

agency relationship is____ irrevocable

Back 89

never

Front 90

ratify deal

Back 90

fire employee, employee keeps trying to work for cmopany even though fired and gets good deal. employer can ratify deal and obtain it

Front 91

a partner who is liable for firm indebtedness only to the extent of the capital he has contributed is known as

Back 91

limited partner

Front 92

required to wind down if...

Back 92

-partnership business becomes unlawful
-court orders dissolution because of a partner's misconduct
-court orders a dissolution because it has become impractical to carry it on under the agreement

Front 93

most important factor in deciding whether someone is an agent or an independent contractor is

Back 93

the amount of control that the cmployer has over that person