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52 Cards in this Set
- Front
- Back
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What are the 3 types of agency problems?
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1. Liability of princ to 3rd parties for Torts of an agent.
2. Liability of princ to 3rd parties for contracts entered into by agent 3. Duties which agent owes to principal |
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Respondeat Superior - what is the issue?
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Whether principal will be vicariously liable for TORTS committed by his agent.
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What is the gen rule re: intention torts? What are the 3 exceptions?
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Gen Rule: Intentional torts are generally outside the scope of agency, unless:
Exceptions: 1. Specifically authorized by principal 2. Natural from nature of employment 3. Motivated by desire to serve principal. |
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WHEN IS A PRINCIPAL LIABLE FOR THE TORTS COMMITTED BY AN AGENT? (give essay answer sentence)
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"The principal will be liable for torts committed by an agent if: (1) a principal-agent relationship exists and (2) the tort was committed by the agent within the scope of that relationship.
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What is the test for principal agent relationship? (ABC)
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Assent + Benefit + Control
Assent = informal vol agreement, principal must have capacity Benefit - agent's conduct is for benefit of principal CONTROL - principal must have the RIGHT to control the agent by having the POWER TO SUPERVISE THE MANNER OF AGENT'S PERFORMANCE |
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What is the rule for vicarious liability and sub-agents and/or borrowed agents?
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No liability unless ABC between Principal and the sub-agent, borrowed agent. Unlikely in both cases.
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General Rule for Vicarious liability in re: IC's
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No vicarious liability for torts of IC's because no ABC
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Exceptions where Principal IS liable for torts committed by IC
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1. Ultrahazardous activity
2. Estoppel - If you hold out IC w/ appearance of agency. |
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How do you determine the scope of the P-A relationship? (3pt test) (remember 2nd part of the test to determine vic. liab)
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Three Part TEST
1. Was conduct "OF THE KIND" agent was hired to perform. 2. Did tort occur ON THE JOB (FROLIC v. DETOUR) 3. Did the agent, even in part, intend to benefit the principal? |
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What is the difference between a frolic and a detour?
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Frolic = new & independent journey, which is outside the scope of the p-a rel.
Detour = MERE DEPARTURE FROM ASSIGNED TASK, w/in the scope (usually on the way back to work, etc) |
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What is the test for Principal liability for contracts entered into by the Agent?
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THE PRINCIPAL WILL BE LIABLE FOR K'S ENTERED INTO BY ITS AGENT IF THE PRINCIPAL **AUTHORIZED** THE AGENT TO ENTER INTO THE CONTRACT.
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What are the 4 types of AUTHORITY (just list generally)
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Actual express authority
Actual Implied Authority Apparent Authority Ratification |
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Actual Express Authority: Gen Rule and Exception
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Gen Rule: Can be given orally and in private, but WORDS ARE CONSTRUED NARROWLY
Exception: EQUAL DIGNITIES DOCTRINE - if the K itself must be in writing than the express authorization must be in writing (SO EMPL. K's LONGER THAN 1 YEAR, ETC - SOF) |
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Revocation of Actual Express Authority - name the two ways and one exception
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1. Unilateral Act by Either Party
2. Death or incapacity of the principal Exception - Express authority cannot be revoked if principal gave agent a DURABLE power of atty. |
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Actual Implied Authority - Define it and list the three ways in which it arises
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Authority which the agent REASONABLY BELIEVES the principal has given him b/c of:
1. Necessity (must do it to accomp. tasks) 2. Custom (cust. perf. by peeps of like title/position 3. Prior Dealings (b/t P & A) |
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What is the two part test for apparent authority?
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1. Principal CLOAKED the agent w/ the appearance of authority AND
2. 3rd Party REASONABLY RELIES on appearance of authority. Ex. P tells A not to sell something, A (Cashier) sells it anyway. |
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If P fires A, and A continues to act on P's behalf, can P still be liable for K's entered into by A?
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YES - LINGERING AUTHORITY
P STILL LIABLE UNTIL CUSTOMERS HAVE NOTICE |
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What are the requirements for RATIFICATION of a K that was entered into by an A w/o authority? What CAN'T P do if she wants to ratify?
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Can ratify if:
1. P had knowledge of all MATERIAL FACTS regarding the K 2. P ACCEPTS BENEFITS of K P CANNOT alter the terms of the K |
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What are the two general rules re: liability on the K?
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If no authority - A liable, P not liable
If authority - P liable, A NOT liable. |
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What is the exception to the general rules re: liability on a K? (hint - results in the fact that A MAY be liable on an authorized K)
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HIDDEN PRINCIPAL EXCEPTION
If P is partial disclosed (only name concealed) or undisclosed (existence concealed) AGENT may ALSO be liable at the THIRD PARTY'S ELECTION |
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What are the THREE duties owed by A to P?
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Duty to exercise REASONABLE CARE
Duty to OBEY REASONABLE INSTRUCTIONS Duty of LOYALTY |
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What is included in the duty of loyalty
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self dealing
usurping opportunities secret profits |
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What are the remedies available to a P when K breaches the duty of loyalty?
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Damages and DISGORGEMENT of Profits made by breaching P
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What are the 4 issue areas in P-ship law?
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Pship formation
Liability of Pners to 3rd parties rights and liabilities b/t Pners Pship Dissolution |
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Gen. Pship Formation - What is it? What formalities are necessary?
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Association of 2 or more persons who are carrying on as CO-OWNERS of a business for profit.
NO FORMALITIES REQ'D |
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What is the share of profits presumption?
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Contribution of money/services in return for a SHARE OF PROFIT creates a PRESUMPTION that General Pship exists.
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Liability of Gen. Pners to 3rd parties
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Agency principals apply
Pners are AGENTS of pship for carrying out usual pship business. Pship = the principal so look for torts w/in scope or authority to K |
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Gen. Pners liability for Debts of the Pship - generally
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Gen. pners are PERSONALLY LIABLE for debts of pship (so you can sue PnerA for pnerV's torts
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INCOMING gen pner liability for PREEXISTING debts
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Generally not liable, BUT any cap. cont. can be used to satisfy prior debts
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###DISASSOCIATING pners liability for SUBSEQUENT DEBTS
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Retains liability on FUTURE DEBTS until ACTUAL NOTICE OF DISASSOCIATION IS GIVEN TO CREDITORS OR 90 DAYS AFTER FILING NOTICE OF DISASSOCIATION W/ STATE. CORP. COMMISSION.
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Gen. Pship Liability by Estoppel
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If person represents to 3rd party that pship exists, even though it does not, can be held liable under pship principals by doctrine of P-ship by estoppel
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Limited Pships - Definition and formaiton
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Pship w/ at least 1 gen. pner and 1 limited pner
File a limited pship certification that includes the names of the general partners |
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Limited Pship - Rules of Liability/Control
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Gen Pners PERSONALLY LIABLE but HAVE RIGHT TO MANAGE
Limited Pners - NOT LIABLE but CANNOT MANAGE w/o forfeiting their limited liability |
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Registered Limited Liability Pships (RLLP) - Formation (3)
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File Cert of Registration
File Annual Reports Maintain Sufficient Insurance to Cover Foreseeable liabilities |
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RLLP - Liability
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NO PNER liable for RLLP's obligations
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What role to Gen. Pners Play? What does this mean?
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FIDUCIARIES of pship and eahc other
Means - DUTY OF LOYALTY no self dealing, usurpation of opps, secret profits at pship's expense |
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What is the name of the Pships remedy where general pner breaches duty of loyalty? What can pship recover?
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ACTION FOR ACCOUNTING -
Pship recovers losses caused by breach and disgorgement |
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When can specific assets owned solely by the pship be transferred to ind. pners?
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NEVER without AUTHORITY from pship
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Can the pner's share of profits/surplus be transferred to 3rd parties?
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YES - personal property owned by ind. pners, thus can be transferred to 3rd parties.
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Can share in management be transferred to 3rd parties
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NO - owned by pship only
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What is the test used where issue is whether property is pship or personal?
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Who's money was used to buy it (J buys car w/ own money but uses it only for pship biz - still can go to J's spouse when J dies)
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Management - Absent an agreement, what is each partner entitled to? What doesn't matter in this equation?
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EQUAL CONTROL (vote)
DOESN'T MATTER how much money each put in. |
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Do pners get a salary absent agreement? What is the one exception?
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NO. Excpetion - winding up fees.
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**Absent and agreement - how are profits and losses shared?
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Profits are shared equally
LOSSES ARE SHARED LIKE PROFITS |
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So if there is an agreement that profits are split 90/10, and no agreement on losses - how are losses split?
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90/10
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If Agreement that losses are split 65/35, and no agreement on how profits are shared - how are profits shared?
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50/50
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Dissolution - define it, when does it occur in pship at will? pship not at will?
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Pship at will - dissolution occurs AUTOMATICALLY upon notice of the EXPRESS WILL of any single gen. pner to disassociate.
If pship not at will - ONLY occurs upon events specified in agreement or unanimous consent of all pners. |
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What is termination
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the real end of a pship
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What is "winding up?"
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The period b/t dissolution and termination in which remaining pners liquidate the pships assets to satisfy creditors
Pners get paid for winding up |
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Liability for transactions winding up OLD BIZ w/ existing creditors during wind up
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Pship (and ind. gen pners) CONTINUE to be liable on all transactions entered to WIND UP OLD BIZ W/ EXISTING CREDITORS
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Liability for n biz - how long does it last?
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Pship and gen pners RETAIN liability on new transactions UNTIL:
1. Actual notice of dissolution is given to creditors, or 2. 90 days after filing statement of dissolution w/ VA state corp. commission. |
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PRIORITY OF DISTRIBUTION IN WINDING UP - List the levels and what they include
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FIRST
Creditors - all outside and inside creditors (incld. pners who have loaned money) SECOND Capital cont. by pners must be paid back THIRD shares Profits & surplus - shares of the losses |
