VA - Agency & Partnership

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  1. Liability of Principal to 3d Parties for Torts of an Agent
    Two part test
    • 1. Principal-agent relationship and
    • 2. the tort was committed by the agent w/in the scope of that relationship
  2. Principal-Agent Relationship
    • 1. Assent - an informal agreement b/t principal w/ capacity and agent
    • 2. Benefit - agent's conduct must be for principal's benefit
    • 3. Control - principal must have the right to control the agent by having the power to supervise the manner of the agent's performance
  3. Liability for Sub-Agents
    • The principal will be liable for a sub-agent's tor t if there is assent, benefit and right to control between principal and sub-agent tortfeasor
    • will find benefit but no assent and no control = no vicarious liability
  4. Liability for Borrowed Agents
    • The principal will be liable for a borrowed agent's tort if there is assent, benefit, and right to control
    • will find assent and benefit but never find right to control = no vicarious liability
  5. Contrast Agents with Independent Contractors
    • 1. key distinction: there is no right to control an IC b/c no power to supervise the manner of performance
    • 2. no vicarious liability for IC's torts
    • 3. Exceptions: ultra-hazardous activities and if P holds ou the IC as an agent (estoppel)
  6. Scope of P-A Relationship Factors
    • 1. Was conduct "of the kind" agent was hired to perform? If so, likely w/in scope.
    • 2. Did the tort occur "on the job"? frolic and detour
    • frolic: new and independent journey - outside scope
    • detour: mere departure from assigned task - w/in scope
    • 3. Did the agent intend to benefit the principal? if so, even in part, is enough to be w/in scope
  7. Intentional Torts
    • generally outside the scope
    • Exceptions: if the conduct was
    • 1. authorized by principal
    • 2. natural to employment
    • 3. motivated by a desire to serve Principal
  8. Liability of Principal for Contracts Entered by Agents
    P is liable for contracts entered into by its agent if the principal authorized the agent to enter the contract (types of authority follow)
  9. Four types of Authority
    • actual express
    • actual implied
    • apparent
    • ratification
  10. Actual Express Authority
    • can be oral and private, but it is narrowly construed
    • Exception:
    • if the underlying K itself must be in writing then the express authority must be in writing as well (eg, land contracts)
    • Revocation: 1) unilateral act of either P or A, or 2) death or capcity of P
    • Exception to revocation: authority will not be revoked if P gives A a durable power of attorney (written expression of authority to enter transaction w/ conspicuous survival language)
  11. Actual Implied Authority
    • authority P gives the A through conduct or circumstance
    • 1. Necessity: all tasks necessary to accomplish an expressly authorized task
    • 2. Custom: all tasks customarily performed by persons w/ agent's title or position
    • 3. Prior dealings b/t P and A: all tasks A believes to be authorized to do from prior acquiescence by P
  12. Apparent Authority
    • Two part test:
    • 1. P "cloaked" A w/ the appearance of authority and
    • 2. 3d party reasonably relies on appearance of authority
  13. Ratification
    • Authority can be granted after the K has been entered, if
    • 1. P has knowledge of all material facts regarding K, and
    • 2. P accepts its benefits.
    • Exception: Ratification cannot alter the terms of the K.
  14. Rules of Liability on the K
    • P is liable on its authorized Ks, and therefore as a rule an authorized agent is not liable on its authorized Ks.
    • Exception: Undisclosed principal - If P is partially disclosed (only the identify of P concealed) or undisclosed (fact of P concealed), authorized agent may nonetheless be liable at the election of the 3d party.
  15. DUTIES AGENT OWES TO PRINCIPAL
    • 1. Duty of care
    • 2. Duty to obey instructions that are reasonable
    • 3. Duty of loyalty. Agent may not do following: a) self-dealing (can't receive a benefit to the detriment of P) b) Usurping the P's opportunity, or c) secret profits (making profit at P's expense w/out disclosure)
  16. PARTNERSHIP
  17. General Partnership Formation
    • Formalities: No formalities to becoming a general partnership.
    • Definition: A GP is an association of 2 or more persons who are carrying on as co-owners of a business for profit.
    • Sharing of Profits: the contribution of money or services in return for a share of profits creates a presumption that a GP exists (not comissions, salary, fixed rate of interest...)
  18. Liabilities of General Partners to 3d Parties
    • Agency principles apply: partners are agents of the partnership for apparently carrying on usual partnership business; Therefore, GP is liable for each partner's torts in scope of partnership and authorized contracts
    • Each GP is personally liable for all debts of the partnership and each co-partners torts (unique!)
    • Incoming partner has no liability for prior debts but any $ paid in to partnership can be used to satisfy prior debts.
    • Dissociating partner retains liability on future debts until actual notice of dissocation is given to creditors or until 90 days after filing a notice of dissociation w/ CW
    • Liability by Estoppel: represent yourself as a partner to 3d parties then GP liable as if a GP exists
  19. Rights and Liabilities Between General Partners
    • GPs are fiduciaries of each other and the partnership. GPs owe to each other an the partnership the duty of loyalty (no self-dealing, usurping opps, secret profits). Then, the remedy is action for accounting, which is partnerhsip may recover losses caused by breach and may disgorge profits made by partner.
    • Rights in Partnership property and liquidity
    • 1. specific partnership assets: land, leases, or equipment owned only by the partnership therefore may not be transferred by any individual partner w/out partnership authority
    • 2. share of profits and surplus: personal property owned as such by individual partners and therefore may be transferred to 3d parties
    • 3. share in management: asset owned only by partnership itself and therefore may not be transferred by individual partners
    • 4. test: if personal $ used to buy property, then personal property; if partnership $ used to buy property, then partnership property
  20. Rights & Liabilities for GPs
    Management
    Absent an agreement, each partner entitled to equal control (vote) (one partner, one vote)
  21. Rights & Liabilities for GPs
    Salary
    • Absent an agreement, partners get no salary
    • Exception: compensation for winding up partnership's business
  22. Rights & Liabilities for GPs
    Partner's Share of Profits and Losses
    • Absent an agreement, profits shared equally
    • Absent an agreement, losses shared like profits
    • If agreement on losses, and silent on profits, profits shared equally.
  23. General Partnership Dissolution
    • a process, not a moment in time
    • dissolution: in the absence of an agreement setting forth events of dissolution, a general partnership dissolves upon notice of the express will of any single general partner to dissociate
    • end of partnership is called termination
    • winding up is the period b/t dissolution and termination in which the remaining partners liquidate the partnership's assets to satisfy partnership creditors
    • Partnership's liability: 1) old business - individual general partners liable for all transactions entered into to wind up old business w/ exiting creditors 2) new business - individual general partners liable until actual notice of dissolution is given to creditorsor until 90 days after filing "statement of dissolution" w/ CW
    • Priority of Distribution
    • 1. All creditors must be paid (outside trade creditors and all partners who have loaned $ to partnership)
    • 2. All capital contributions by partners must be paid
    • 3. Profits and surplus, if any, shared equally w/out agreement
    • Rule: Each partner must be repaid his or her loans and capital contributions, plus that partner's share of the profits or minus that partner's share of the losses.
  24. ALTERNATIVE UNINCORPORATED BUSINESS ORGANIZATIONS
  25. Limited Partnerships
    • a partnership with at least one general partner and at least one limited partner
    • formation by filing a limited partnership certificate including names of all general partners (failure to file is a general partnership)
    • Liability and Control:
    • 1. General Partners - liable for all limited parnership debts - right to control the business
    • 2. Limited Partners - have limited liability and therefore are not liable for debts of limited partnerships - in VA, limited partners may not manage the business w/out forfeiting limited liability status
  26. Registered Limited Liability Partnership (RLLP)
    • Formation: register w/ CW by filing a "statement of qualification" plus annual reports
    • Liabilities: no partner is liable for the debts of the partnership; can still sue partner for own wrongdoing

Card Set Information

Author:
 richardlpeterson
ID:
 128534
Filename:
 VA - Agency & Partnership
Updated:
2012-01-18 02:54:28
Tags:
VA barbri
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Description:
VA - Agency & Partnership
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