Ny Agency And Partnership

Front 1

What is the test for whether or not the principal will be liable for torts committed by its agent?

Back 1

1) A principal/agent relationship, and

2) the tort was committed by the agent within the scope of that relationship

Front 2

The principal/agent relationship requires...

Back 2

1) Assent - an informal agreement between principal and the agent

2) Benefit - Agent's conduct must be for principal's benefit

3) Control - Principal must have the right to control agent by having power to supervise manner of agent's performance

Front 3

Will the principal be vicariously liable if its agent gets the help of a "sub-agent" and the "sub-agent" commits the tort?

Back 3

Generally no because the principal does not assent to the sub-agent's help nor does he have the right to control the sub-agent.

Front 4

Will the principal be vicariously liable if a principal borrows another principal's agent?

Back 4

Generally no because the borrowing principal does not have the right to control the borrowed agent.

Front 5

Waht is the key distinction between an agent and an independent contractor?

Back 5

No right to control the independent contractor

Front 6

Is a principal generally vicariously liable for the tort of an independent contractor?

Back 6

Generally no, because no right to control

Front 7

What are the exceptions to the general rule about vicarious liability and independent contractors?

Back 7

1) Vicarious liability if the independent contractor is engaged in an inherently dangerous activity, or

2) If the principal held out the independent contractor as an employee

Front 8

What factors must be considered when trying to determine whether the activity was within the scope of the principal/agent relationship?

Back 8

1) Action was within the scope of job description

2) Frolic v. detour

3) Did the agent intend to benefit the principal

Front 9

What is the general rule regarding intentional torts committed by the agent and vicarious liability for the principal?

Back 9

Generally outside of the scope

Front 10

What are the exceptions to the general rule regarding vicarious liability and intentional torts?

Back 10

1) Intentional tort was authorized by the principal, or

2) The tort was natural from the nature of employment, or

3) tort was motivated by desire to serve principal

Front 11

What is the test for determining if the principal is liable for a contract entered into by an agent?

Back 11

The principal is liable if the principal authorized the agent to enter into the contract

Front 12

What are the four types of authorization?

Back 12

Actual express, actual implied, apparent, and ratification

Front 13

What is actual express authority?

Back 13

When the principal used words to express authority to agent. - Actual express authority can be oral and even private.

Front 14

What is required for actual express authority if the underlying contract must be in writing?

Back 14

The express authority must be in writing as well.

Front 15

How can express authority be revoked?

Back 15

1) Unliateral act by either the principal or the agent, or

2) Death of the principal

Front 16

What happens if the principal is found to be incapacitated?

Back 16

Express authority will pass incapacity of principal if the agent received power of attorney that doesn't expressly terminate upon incapacity of principal

Front 17

How can actual implied authority arise?

Back 17

1) Necessity - Agent has the implied authority to do all tasks which are necessary to accomplish expressly authorized tasks

2) Custom - By custom acts are performed by agents w/ agent's title or position

3) Prior Dealings With the Principal and Agent - Which agent believes to be authorized to do through prior acquiescence

Front 18

What must be shown for apparent authority?

Back 18

Two part test:

1) Principal "cloaked" agent wwith the appearance of authority, and

2) third party reasonably relies on appearance of authority

Front 19

What must be shown for a contract to be ratified?

Back 19

Authority can be granted after the contract has been entered, if:

a) Principal has knowledge of all material facts regarding contract, and

b) Principal accepts its benefits.

c) Exception: Ratification cannot alter the terms of the contract.

Front 20

What is the general rule regarding agent liability for contracts they entered into on behalf of the principal?

Back 20

Authorized agents are generally not liable on their authorized contract

Front 21

What is the exception regarding agent liability and contracts they entered into on behalf of the principal?

Back 21

If principal is partially disclosed or undisclosed, authorized agent may nonetheless be liable at the election of the third party.

Front 22

In return for reasonable compensation and reimbursement of expenses, agents owe principals...

Back 22

1) Duty of care not the negligent in acting for principal

2) Duty to obey instructions that are reasonable

3) Duty of loyalty to the principal

Front 23

What actions are prohibited under the duty of loyalty that an agent owes to the principal?

Back 23

1) Self-dealing (Agent cannot receive a benefit to the detriment of the principal)

2) Usurping the principal's opportunity, or

3) Secret profits (making a profit at the principal's expense without disclosure)

Front 24

What is the definition of a general partnership?

Back 24

Association of two or more persons who are carrying on as co-owners of a business for profit

Front 25

What is the key factor for general partnerships?

Back 25

Sharing of profits - contribution of money or services in return for a share of profits is prima facie case of general partnership

Front 26

What is the rule regarding an incoming partner's liability for pre-existing debts?

Back 26

Generally not liable for prior debts but any money coming in from new partner can be used to pay debt.

Front 27

What si the rule regarding a dissociating partner's liability for subsequent debts?

Back 27

Dissociating partner are liable for future debts until actual notice of dissociation is given to all current creditors and publication notice is given to all potential creditors.

Front 28

What is the defintion of general partnership by estoppel?

Back 28

One who represents to a third party that a general partnership exists will be liable as if a general partnership exists.

Front 29

What remedy is available for a general partner that suffers from a breach of his partner's breach of the fiduciary duty?

Back 29

Action for accounting - General partner can recover damages for losses that are caused by the breach and may disgorge profits made by breaching party

Front 30

Can individual general partners transfer property owned by the general partnership?

Back 30

No

Front 31

Can general partners transfer their share of the profits from a general partnership?

Back 31

Yes, profits are the personal property of the partner so they may be transferred

Front 32

Can general partners transfer their share in management of the general partnership?

Back 32

No

Front 33

What is the general rule regarding how to determine whether the partnership or the partner owns certain property?

Back 33

Look at whose money was used to purchase the property

Front 34

How is management divided if there is no agreement?

Back 34

Each partner is entitled to equal control

Front 35

Absent an agreement does a partner get a salary?

Back 35

No

Front 36

What are the default rules regarding distribution of general partnership profits and losses?

Back 36

Absent an agreement, profits are shared equally. Absent an agreement, losses are shared like profits.

Front 37

How does dissolution of a general partnership begin?

Back 37

Upon any material change in partnership including death or dissassociation of any partner

Front 38

What is the real end of the partnership called?

Back 38

Termination

Front 39

What is the period between dissolution and termination called?

Back 39

Winding up

Front 40

What is the priority of distribution for winding up a general partnership?

Back 40

1) Outside creditors must be paid

2) Inside creditors must be paid

3) Capital contributions by partners must be paid

4) Profits, surpluses or losses ditributed to partners

Front 41

What is the definition of a limited partnership?

Back 41

A partnership with at least one general partner and at least one limited partner

Front 42

Define limited partners

Back 42

Limited liability, not liable for obligations but cannot manage without giving up limitations