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79 Cards in this Set
- Front
- Back
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What is an Agency?
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notion of fiduciary duty
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What's the difference between and employee and an I. C.
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degree of control that the employer exercises over the employee
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How is an agency formed?
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have to have consent have to have performance, don't have to have consideration. Doesn't have to be in writing unless the contract the agent is to perform is in writing
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Agent’s duties
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performance, notification, loyalty, obedience, accounting
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Gratuitous agent
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works for free, and cannot be sued for breaching agency agreement, can be sued for torts (negligence).
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Principal’s duties
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compensation, reimbursement -- for costs, travel, meals, etc./indemnification -- if agent gets sued for something that's principle's fault, the agent can also be held liable, but if it isn't his wrong doing he can turn around and ask for remedy, cooperation, safe working conditions
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Agent’s rights
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Tort and K remedies, accounting. NO specific performance (too much like involuntary servitude)
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Principal’s rights
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constructive trust, avoidance, indemnification
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Actual Authority (express & implied)
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Actual means what's been communicated between the principle and agent
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Apparent Authority
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3rd party is lead to believe
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Emergency Powers
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if something happens and the agent has to act to save the business, then the court will find it's ok
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Ratification
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arises when agent does something they are not authorized to do. Court views contract that hasn't been ratified as an unaccepted offer (which means the third party can revoke it at anytime). If the principle does ratify without knowing all the material facts, the P can still rescind, but may have to reimburse the innocent 3rd party for any reliance.
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Liability for K’s. was act authorized or unauthorized?
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For an authorized act, principle is ALWAYS liable. For an unauthorized act, the principle is never liable.
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Liabilities for Torts and Crimes
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cannot forget, you're always liable for your own torts!
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Principal’s torts. When can we hold the principle liable for agents torts?
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When principle's tort caused the agents tort, or if principle authorizes agents torts.
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Agent’s misrepresentations
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as long as they are made within the scope of agent's authority. If it's an honest mistake, then the 3rd party can only rescind, but no damages remedied.
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When can the principle be held liable for an agent’s negligence?
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respondiat superior, as long as the agent/employee is acting within the scope of employment, then the principle/employer can be held liable, detour IS in scope of employment
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when can principle be held liable for an Agent’s intentional torts
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(1) within the scope of employment, (2) propensity to commit torts, (3) reckless actions
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is principle held liable for Independent Contractor's Torts
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only if it's strict liability -- blowing things up
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can principle he held liable for agents crimes?
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No, unless they participated in the crime, or some statute makes the principle liable.
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Termination
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lapse of time -- k for 30 days, 30 days are up
- Act of parties -- - Operation of Law -- death, insanity, impossibility |
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Difference between renunciation and revocation?
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First terminated by agent, second by principle.
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Partnerships definition
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intent to form partnership, you can form one even if you don't do anything formally.
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status of partnership (3 factors)
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sharing of profits/losses -- most important, joint ownership in business, equal right to manage business
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Formation
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draft and sign Articles of Partnership. One person, one vote. All partners are agents of all other partners, as well as the Partnership itself.
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Operation
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Management (1 person, 1 vote)
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Authorized v. Unauthorized Actions
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partners always liable to authorized acts to one another, but not unauthorized.
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Joint v. Joint and Several
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if it's a state where there's joint liability and you're the plaintiff, you better sue all of the partners because if you don't and the most you get is 500,000, then you're done. You can't sue again. IF it's Joint AND several then you can sue one, then the other, and another.
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Dissociation
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when one partner wants to withdraw from partnership.
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Effect?
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nothing unless the partners vote not to continue business, then the dissolution process begins.
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How long liable? How can one avoid this result?
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2 yrs. But can be limited to 90 days if they file to dissociate.
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Termination
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can terminate by agreement, by operation of law, judicial decree - at some point end up in litigation and partnership will only by run at loss, or if fraud involved, or of partners cant' get along anymore, judge may rule above three situations to disband.
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winding up process
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pay the debts, and return capital to partners their original contribution, and divvy up the rest.
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purpose for forming an LLP
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protect each partner from liability in tort and in contract from all other partners' liabilities
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supervising partner's liability
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in states where they have this, it protects the supervisor where he would normally be 100% liable. If there's proportionate liability, then they are only liable for 20% / 80% etc.
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LP’s
- Formation |
a lot more formal than general partnerships -- have to get a certificate of limited partnership. (have general and limited partners, unlike LLP where its all the same partner type)
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Liabilities
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Limited partners are only liable for amount of their contribution but better not start participating in management or can lose limited liability protection
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LLC’s
- Nature -- how are they taxed? |
Taxed as individual rather than corporation
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Formation
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much more formal, articles of Organization with state.
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Jurisdiction
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total diversity jurisdiction, LLC is considered resident of every state in which they have a member resident
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Operating Agreement (required?)
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Not required, do have to have Articles of Organization though. Hierarchy of law, in absence of operating agreement or state statute, partnership law will control
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Corporations
- Nature |
separated ownership from those that run and operate oragnization
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Personnel
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made up of directors, officers, and shareholders
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Taxation
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taxed twice, one as corporation, one through owners
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Torts and Crimes
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can be liable by torts committed by officers and directors and employees, and under theory of respondiat superior
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Ultra Vires Doctrine
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means corporation has done something OUTSIDE of the powers that have been granted unto it. Not DUI but yes shredding documents
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S Corps 3 elements:
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(1) have to be domestic corporation, (2)less than 100 shareholders (3) 1 class of stock
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Why would you want to qualify for S Corp status?
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Avoid double taxation
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Promotion
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promoter issues prospectus and secures corporate charter
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Incorporating
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file articles of incorporation, which will contain some number of original incorporators who held the first organizational meeting and elected the initial board of directors.
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Piercing the Corporate Veil. 4 factors to know
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(1) 3rd party through fraud is tricked into doing business with corporation. (2) corp setup never to make a profit (3) don't follow corporate formalities, no meetings, not renewing corporate charter, etc. (4) commingling with personal assets, not having separate bank accounts
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Financing
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debt securities, bonds -- equity securities, stocks
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ch 39. management -- Directors
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Appointment, Election, Removal - first appointed by initial incorporators, after that elected by shareholders, and can be removed by shareholders
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Board Meetings
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at least annually
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Rights
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participation, compensation, inspection, indemnification
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Officers
- Hired by? |
board. Agents/employees of Corp
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Duties and Liabilities of D’s and O’s
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Duty of Care (act as a reasonable person)
Duty to do your homework, duty to pay attention/supervise, and good faith. Duty of Loyalty ... disclose disclose disclose |
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Conflict of Interest
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-- disclose disclose disclose
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Crimes and Torts
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always liable for own, and sometimes those under supervision
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Derivative Suit
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what the shareholders bring if they perceive a wrong done to the corporation, suing on behalf of corp.. Shareholders have to give Directors and Officers first shot at fixing the problem, and only if they don't, then can they sue on behalf of Corp.
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Shareholders
- Role |
owners
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Rights (4)
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right to approve fundamental changes: (1) amend articles of corp. (2) approve merger (3) sale of substantially all corporate assets (4) right to elect or remove board members
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Liability
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only if and unless the corporate veil is pierced
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Chapter 33 Implied theory of contract: how might it arise?
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Oral promise made, in some employee manual,
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ECPA -- Employee Communications Protection Act.
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Employeer doesn't have the right to monitor your communications UNLESS it's in the ordinary course of business (huge loophole)
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Drug testing
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(gov’t must follow 4th amendment) reasonable suspicion or warrant is ok for drug testing
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AIDS testing
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(law doesn’t prohibit)
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- Screening procedures
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§ Questions etc. must have reasonable nexus to the job being applied for
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Chapter 34 – Employment Discrimination. - 7 Protected Classes under Title VII, ADA, and ADEA please know all SEVEN
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· Race, color, national origin, religion, gender (pregnancy), age, disability
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disparate treatment
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intentional
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disparate impact
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Unintentional, high school diploma requirement has unintentional impact on one group of the protected class
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Religion
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· “Reasonable accommodation” unless undue hardship on employer’s business
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Constructive Discharge
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working conditions are so intolerable that person had to quit, not forced to quit.
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Supreme court guidelines:
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employer better have a policy in place, and proceedure to protect, and if they do have it and employee doesn't follow it, they waive rights
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What is a disability?
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An impairment that substantially limits a life activity. Carpel tunnel syndrome doesn't impair life, just work. UNLESS she can't prepare food and those kinds of things. Defenses, business necessity, undue hardship
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Affirmative Action
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can't have quotas, can't give automatic diversity bonuses. CAN use somebody's race, religion, or gender as a "plus" factor.
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1. 3 reasons ethics are important
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1) Long term liability of corporation
2) Well being of officers and directors 3) Welfare of employees Law is ethical minimum, not maximum |
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SoX
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has to be confidential system of reporting unethical acts, and CEO must certify financial documents
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Who can you bribe under FCPA
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not final decision makers, paper pushers
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