Oh Agency/partnership

Front 1

Estoppel to Deny Existence of Agency Relationship - what do you need?

Back 1

a principal may properly deny the existence of an agency relationship, including apparent authority, IF there is a lack of a manifestation by the principal that the purported agent holds authority to complete the transaction in question

Front 2

Estoppel to Deny Existence of Agency Relationship - successfully used when?

Back 2

3rd party may successfully assert that a person is estopped from denying an agency relationship IF: 1) principal intentionally/carelessly caused reasonable belief in 3rd part in existence of agency relationship OR 2) having notice of such belief and that it may induce others to change their positions, the principal did not take reasonable steps to notify them of facts AND 3) 3rd party made a detrimental change in position based on reasonable belief in purported agent's authority!

Front 3

Ratification

Back 3

1) grants retroactive authority for agent's earlier actions
2) person ratifies by manifesting assent (express or implied)
3) any act done, or purported to be done, on principal's behalf may be ratified
4) some limitations apply
5) retroactive effect

Front 4

Respondeat Superior steps

Back 4

vicarious liability upon a principal for the torts his agent committed within employee's scope of employment!
1) is this an employee agent or independent contractor?
2) tort committed within scope of employment?
3) employee/employer are jointly and severally liable!

Front 5

Scope of employment

Back 5

Are you performing tasks assigned by the employer or engaging in a course of conduct subject to employer's control? Doesn't count if employee is doing something for his own purposes only!
Look for: frolic or detour?

Front 6

Frolic

Back 6

when an employee has substantially deviated from the authorized route
- employer will NOT be liable for a tort that happens on a frolic
- BUT an employer can return to the scope of employment after a frolic occurs

Front 7

Detour

Back 7

slight deviation from authorized route
- employer IS liable here

Front 8

Intentional Torts

Back 8

Usually not in the scope of employment, but sometimes intentional tort is foreseeable and within scope - like being a bouncer! Look at whether they're doing it for benefit of their employer

Front 9

Employee Driving Own Automobile

Back 9

Employer can still be held liable - even though he chooses own route and speed!

Front 10

Independent Contractors

Back 10

Principal not liable for tortious acts UNLESS
1) inherently dangerous activities (blasting!)
2) nondelegable duty (when principal has a legal duty to perform)
3) negligent selection of contractor (principal bad at hiring)
4) actual agency to do what he did
Never respondeat superior - but vicarious liablility

Front 11

Imputed/Attributed Knowledge

Back 11

1) knowledge of agent imputed to principal
2) agent must have duty to discuss issue with principal
3) not imputed when agent acts adversely (exception!)

Front 12

Termination of Agency Relationship

Back 12

1) both principal and agent have the POWER, but not necessarily the RIGHT, to terminate at any time
2) principal must notify agent unless 1) agency naturally expires upon completion OR 2) agency set to expire at set time
3) principal must notify all third parties with whom agent dealt
4) agency not terminable at will IF 1) agency is coupled with interest in the subject matter or 2) agent has power given for security (for payment of debt)

Front 13

Partnership requirements

Back 13

1) agreement
2) two or more persons
3) carry on a business as co-owners
4) for profit!

Front 14

Partnership characteristics

Back 14

1) unlimited liability for partners
2) partners have the right to comanage the partnership
3) fidicuiary duties exist between and among the partners adn the partnership; AND
4) partners share in the profits

Front 15

Tests of Partnership

Back 15

Look to intent of the parties to co-own a business for profit, no matter what it is called!
- express agreement is best indication of intent
- if partnership agreement is just implied, we look at other factors

Front 16

Factors to Test Implied Agreement for Partnership

Back 16

sharing of profits, management practices of entity, amount and type of services rendered by parties, the record title to any real or personal property used by entity

Front 17

Partnership by estoppel

Back 17

when a person, by words or conduct, represents himself to be a partner in a partnership or with one or more persons who are not actual partners, he is liable to anyone who has entered into a transaction in reliance on the representation of the partnership!

Front 18

Agency created by holding out

Back 18

When a personhas been represented to be a partner in an existing partnership, or with others who are not actual partners, he is an agent of those consenting to the rep, and he can bind them as if he were, in fact, a partner

Front 19

Authority of Partners

Back 19

Express
Apparent (based on nature and course of business; custom in similar partnerships)
Restrictions on Authority (third party must have knowledge of restriction)

Front 20

Liability of Partners

Back 20

1) Jointly and severally liable for all obligations
2) partner not bound by judgment unless served with notice
3) each partner individually liable for entire amount
4) entitled to indemnification
5) entitled to contribution

Front 21

Retiring Partner

Back 21

You're still liable for past debts/obligations!

Front 22

Incoming Partner

Back 22

Not personally liable for any partnership obligation incurred before the person's admission as a partner

Front 23

Contributions to Partnership

Back 23

Partners make contributions in cash or otherwise
Partner entitled to be repaid contributions
Each partner must contribute toward losses

Front 24

Rights of Partnership

Back 24

Right to indemnity; right to interest; right to compensation; right to accounting; equal rights in management and control; property rights of partner (economic rights and right to participate in management)

Front 25

Partner's Rights to Transfer

Back 25

only transferable interest is economic! BUT doesn't give transferee any partnership rights except for financial (receive distributions, etc.)

Front 26

Fiduciary Duties of Partnerships

Back 26

duty of care, duty of loyalty, duty to keep books and right of inspection

Front 27

Duty of Loyalty Requirements

Back 27

duty not to compete, good faith, duty to disclose, duty to account

Front 28

Duty to Keep books and right of inspection

Back 28

each partner has right to inspect books/records

Front 29

New members in general partnership

Back 29

Only by unanimous consent of all partners (unless partnership agreement says otherwise)
- jointly/severally liable for debts or obligations going FORWARD

Front 30

Dissociation

Back 30

Withdrawal of a partner from the partnership

Front 31

Events of Dissociation

Back 31

Partner's express will; event agreed on in partnership agreement; expulsion pursuant to partnership agreement; partner's expulsion by unanimous vote of other partners; judicial determination; etc.

Front 32

Buyout of Dissociating Partner's Share

Back 32

If you're dissociating without dissolution and winding up, partnership has to buy you out!

Front 33

Dissociated partner's power to bind partnership

Back 33

for 2 years after he dissociates without resulting in a dissolution and winding up, the partnership is bound by an act of dissociated partner that would have bound the partnership before dissociation if at the time of entering into the transaction, the other party 1) reasonably believed the dissociated partner was a partner 2) did not have notice of dissociation and 3) is not deemed to have had knowledge/notice of dissociation

Front 34

continuing obligations of dissociating partner

Back 34

partner's dissociation does not by itself discharge partner's liability of partnership obligations incurred before dissocation. Dissociated partner not liable for a pertnership obligation incurred after dissocation

Front 35

Dissolution

Back 35

mandatory, permissive, continuance after dissolution, effect on authority of partner

Front 36

Winding up

Back 36

right to wind up, powers and duties of winding up

Front 37

Distribution of assets

Back 37

order of distribution, settlement of accounts, contribution

Front 38

order of distribution

Back 38

creditors first (even if the partner is a creditor); then any surplus must be applied to pay in cash hte net amount distributable to partners in accordance with their distribution rights

Front 39

Formation of Limited Liability Partnership

Back 39

Name must identify as LLP and you must file certificate with Secretary of State

Front 40

LLP

Back 40

general partnership that is authorized by state statute and provides corporate-style limited liability for all general partners

Front 41

Rights and obligations of Partners

Back 41

same fiduciary duties as in regular partnership; partner not personally liable for obligations of LLP; LLP must provide security for claims against it

Front 42

Liability in LLP

Back 42

partners in LLP are not personally liable for the obligations of the LLP, whether arising from tort, contract, or otherwise, and are personally liable ONLY for their own wrongful acts

Front 43

Are LLPs general partnerships?

Back 43

Yes! NOT the same as limited partnership

Front 44

Limited Partnership Characteristics

Back 44

At least one general partners; at least on limited partner; limited liability for limited partners; no separate taxation of partnership; direct deduction of expenses or losses against their other income

Front 45

Formation of LP

Back 45

name must identify as limited partnership; must file certificate with secretary of state

Front 46

Contributions in an LP

Back 46

Partner contributions in form of cash, property, services, promissory note, or other obligation; partner's promise to contribute ust be in a signed writing; obligation not excused by death or disability; obligation cannot be compromised unless all partners consent

Front 47

Limited Partner liable for partnership obligation?

Back 47

Limited partner not liable for partnership obligation unless he participates in control of business

Front 48

If you're mistaken about your status as a limited partner?

Back 48

if your mistake is in good faith you are NOT bound by partnership's obligations if when you learn of your mistake, you get an appropriate certificate of LP or you take appropriate steps to withdraw - you're still liable as a general party before you do this though if you should have known

Front 49

Rights and Powers

Back 49

FILL IN

Front 50

New Limited Partners

Back 50

FILL IN

Front 51

General Partner

Back 51

FILL IN

Front 52

Assignment of Partnership Interests

Back 52

FILL IN

Front 53

Distributions

Back 53

FILL IN

Front 54

Withdrawal

Back 54

FILL IN

Front 55

Dissolution

Back 55

FILL IN

Front 56

Priorities of Liabilities upon DIssolution

Back 56

FILL IN

Front 57

Organization of an LLC

Back 57

FILL IN

Front 58

Law of Agency

Back 58

Agency is a fidcuciary relationship that arises when the principal manifests assent to the agent that the agent shall act on the principal's behalf and be subject to the principal's control, and then the agent manifests assent

Front 59

Types of agency relationships

Back 59

master/servant (employer/employee) and employer/independent contractor

Front 60

Four Consequences of Agency

Back 60

Duties arise between agent and principal;agent has power to bind principal; principal liable for agent's actions; knowledge of agent imputed to principal

Front 61

Elements of the Agency Relationship

Back 61

Manifestations of principal's intention (1) express - written or oral 2) implied 3) by conduct); both parties assent; agent agrees to act on principal's behalf; agent acts under control of principal

Front 62

Capacity to be an Agent - what do you need?

Back 62

minimum mental capacity (minors and incompetents are okay); agent endowed with same capacity as principal

You may NOT be an agent for two adverse parties to a transaction unless both parties are fully advised and give their consent - burden is upon agent to show full disclosure and consent

Front 63

Capacity to be a Principal

Back 63

any person who has the capacity to effect his own transactions has capacity to appoint an agent to act on his behalf (NOT incompetents or generally minors, unless contracting for necessaries - corporations only okay as to matters within corporate powers)

Front 64

Presumption of Agency in Motor Vehicle Operation

Back 64

common law: no presumption of owner's liability for negligent use of vehicle by another

Some state statutes: rebuttable presumption that the driver of a car is operating as the agent for the owner = owner is liable for negligence

Front 65

Types of Principals

Back 65

Disclosed (at the time of transaction, 3rd party knows I am working for Donald Trump)

Undisclosed (3rd party has no knowledge of existence or identify of principal)

Partially Disclosed (a principal whose existence, but not identity, is known to 3rd party)

Front 66

Enforceability of agency contracts with undisclosed or partially disclosed principals

Back 66

either agent OR principal may enforce K and hold 3rd party liable; if agent enforces a K, principal entitled to all rights/benefits; principal CANNOT enforce against 3rd party if the agent has fraudulently concealed the identity of principal

Front 67

Types of Agents

Back 67

General Agents - employed by principal to transact all of his business of a particular kind - authority to perform all things in the line of business in which he is employed CANNOT be limited by secret instructions unknown to 3rd party

Special Agent - employed especially for one transaction or for specific limited duties (real estate agent, salesperson, auctioneer)

Subagent - person entitled to do work for original agent in the relationship - so a new agency relationship created with original agent as principal! Any breaches of duty will be imputed to agent - BUT if subagent appointed without principal's authority (express or implied), no agency relationship exists between principal and subagent

Gratuitous Agents- agrees to perform all duties of an agent without compensation

Front 68

Servant v. Independent contractor factors!

Back 68

amount of control principal exerts, whether agent is engaged in distinct business, whether work is customarily under principal's supervision, skill required in agent's occupation, who supplies tools and place of work, length of time agent has been engaged by principal, whether paid by the job or the hour, whether principal and agent intended to create employment relationship, whether principal is in business

Front 69

Independent Contractor definition

Back 69

a person who contracts with another to do something for him but who is not controlled by the other, nor subject to the other's right to control with respect to his physical conduct in the performance of the undertaking

Front 70

Duties of Principal to Agent

Back 70

Compensate for services (agreed-upon amount or reasonable value), reimburse for reasonable expenses, indemnify and exonerate for liability, cooperate in performance of agent's duties, exercise due care toward agent

Front 71

Duties of Agent to Principal

Back 71

Duty of care, duty of loyalty, duty to account, duty of candor, dual agency rule

Front 72

Duty of Care (agent to principal)

Back 72

perform contract and render services with reasonable care, obey principal in all reasonable directions, act with care, competence, and diligence, and indemnify principal against loss caused by wrongful conduct

Front 73

Duty of Loyalty (agent to principal)

Back 73

Self-Dealing (acting for own benefit instead of principal's), usurpation of business opportunity (business opportunity is one so closely related to the business that it could be deemed incidental to it), duty of confidentiality (agent can't use confidential info obtained from principal to detriment of principal, even if the info is not obtained through agency! BUT ex-employees may use skills learned on the job later as long as they don't breach any confidentiality agreements), duty not to compete (employee may prepare to enter into competition while still employed by setting up own business, as long as he does not take away from employer's business by soliciting customers or key employees. BUT watch out for noncompete agreements - they must rest upon protectable interest and be reasonable in time and geographic scope to be enforceable!)

When breached, appropriate remedy is disgorgement of any profits - even liable for profits to 3rd parties!

Front 74

Dual Agency Rule

Back 74

when agent acts for more than one principal in negotiations between multiple principals, transaction is voidable by either principal unless both are fully informed of representation and consent

Front 75

Agent's Duties to 3rd parties

Back 75

if disclosed principal, agent is not liable unless he takes additional actions; if partially disclosed principal, agent presumed party to contract; if undisclosed principal, agent assumed contracting on own behalf