Agency and Partnership
Card Set Information
Agency and Partnership
Barbri Agency and Partnership
A principal will be liable for torts committed by its agent if:
There is a principle agent relationship and the tort was committed by the agent with the scope of that relationship.
The principal-Agent relationship requires:
Assent is an:
informal agreement between a principal with capacity, and the agent.
Benefit means that:
the agent's conduct must be for the principal's benefit.
the Principal must have the right to control the agent by having the power to supervise the manner of the agent's performance.
A principal will be vicariously liable of sub agent torts if it:
There is Assent, benefit, and control between the principal and sub-agent tortfeasor.
A principal will be liable for a borrowed agent's tort:
only if there is assent, benefit, and control between the borrowee principal and the borrowed agent.
In general, there is no vicarious liability between a principal and a:
A principal will only be liable for the acts of a indipendent contractor when:
1. The contractor is engaged in an inherently dangerous activity and
2. Estoppel: The principal holds out the independent contractor to the public as his agent.
Scope of Principal-Agent relationship factors are:
1. Was conduct "of the kind agent was hired to perfom?
2. Did the tort occur on the job? (Frolic v. Detour)
3. Did the agent intend to benefit the principal?
Frolic v. Detour
! A frolic is a new and independent journey outside of the scope of employment. (outside scope)
2. A detour is a mere departure from an assigned task (w/in scope)
Intentional torts are generally outside/inside of the scope?
Generally outside of an agent's scope.
An intentional tort will be within scope when:
1. Authorized by principle
2. Natural from the nature of employment or
3. Motivated by a desire to serve the principal.
A principal is liable for Ks entered into by its agent only if:
the principal authorized the agent to enter the K.
The four types of authority are:
1. Actual Express authority
2. Actual implied
Actual express authority to enter a K occurs when:
the principal used words to express authority to agent. (even private conversations will count)
If a K must be in writing, expressed authority must:
be in writing as well.
Express authority can be revoked by:
1. Unilateral act of either the principal or the agent or
2. Death or incapacity of the principal before entering into the K.
Express assent will survive death if:
the Principal gives a durable power of attorney to the agent.
Actual implied authority gives the agent authority:
through conduct or circumstance.
The three types of Actual Implied Authority are:
1. Necessity: Which are necessary to a accomplish an expressley authorized task.
2. Custom: Which by custom are performed by persons that the agent's title or position.
3. Prior dealings: The agent believes to be authorized from prior acquiescence by the principal.
Apparent authority is found where:
1. The principal cloaked the agent with the appearance of authority and
2. The third party reasonably relied on appearance of authority
Ratification is authority:
given after the K has been entered into if:
1. Principal has knowledge of all material facts and
2. Principal accepts the K's benefits.
Ratification cannot alter:
the terms of the K.
Generally a principle is liable for authorized contracts and:
agents are not liable for authorized Ks.
An agent will be liable for K's entered into if:
the principal is partially disclosed or completely undisclosed.
Agents owe their principal:
1. Duty of care.
2. Duty of obedience.
3. Duty of loyalty.
The duty of loyalty prevents an agent from:
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.
Partnership formation requires no:
general partnership formalities.
In order for there to be a partnership there must be an:
association with 2 or more persons, carrying on business as co-owners for profit.
General partners are liable for:
all partnership obligations including the torts of their partners.
Partnership estoppel holds parties that:
represent that there is a partnership liable as partners.
General partners owe each other a:
duty of loyalty which prevents self-dealing, usurping and making a secret profit.
An action for accounting allows the partnership to:
recover losses caused by a breach of the duty of loyalty and also disgorge profits made by the breaching partner as well.
Partnership assets may not be transferred outside the partnership:
with out partnership authority.
Management in a partnership may not:
be transferred to 3rd parties by partners individually.
The test to determine whether a partner or partnership owns a piece of property is:
who's money was used to buy the property. The partner's or the partnership's?
Absent an agreement each partner is entitled to equal:
Partners receive no:
salary, absent an agreement.
Partners are paid however to:
wind up the business.
Absent an agreement, profits are shared equally and losses are shared:
A general partnership dissolves:
automatically upon any material change in partnership including: death or withdrawal of any general partner.
Distribution of funds upon liquidation of a partnership are as follows:
1. Outside creditors
2. Inside creditors
3. Capital contributions
4. Profits and surpluses
Inside outside creditors, inside creditors and capital contributions by partners must:
be paid upon liquidation of the partnership.
Limited partners and LLC members both have:
limited liability status.