agency & partnership
Home > Flashcards > Print Preview
The flashcards below were created by user
on FreezingBlue Flashcards
. What would you like to do?
liability of principal for tort's of agent
- respondeat superior / vicarious liability
- Principal will be liable for torts committed by agent if:
- (1) there is a principal / agent relationship
- (2) tort was committed by agent within the scope of that relationship
the principal-agent relationship requires
- assent - informal agreement between principal & agent
- benefit - agent's conduct must be for the principal's benefit
- control - prin must have right to control agent by having the power to supervise
vicarious liability for indpendent contractor
- no VL for ind-Ks tort
- 1. if Ind-K commits a tort while engaged in ultra hazardous activity, then there will be VL;
- 2. estopple - if principal hold out the Ind-K with apperance of agency, the principal will be estopped from denying VL
SCOPE of principal-agent relationship factors
- 1. was conduct within the job description?
- 2. did the tort occured "on the job"? Frolic - new and independent journey (out of scope); Detour - within scope.
- 3. Did agent intend to benefit the principal?
liability of principal for contracts entered by agents
- principal is liable if he authorized the agent to enter the k.
- 1. actual express authority (if K must be in writing, then express authority to enter that K must also be in writing)
- 2. actual implied authority - principal gives agent thorugh conduct or circumstance: necessity, custom, prior dealings between principal and agent.
- 3. Apparent Authority - (i) principal cloaked agent with the apperance of authority, and (ii) 3rd party reasonably relies on that apperance of authority.
- 4. ratification - authority can be granted after the K has been entered (P has knowledge of all material facts, P accepts its benefits, ratification cannot alter terms of K)
- 1. no formalities to become GPs
- 2. a GP is an association of 2 or more persons who are carrying on as co-owners of a business for profit
General Partnership liability
- * the general partnership is liable for each partner's torts in the scope of partnership business and for each other's authorized Ks. (jointly and severally liable for all obligations of the partnership)
- * each GP is personally liable for all debts of the partnership and for each co-partner's torts.
general partnership liability by estoppel
one who represents to a 3rd party that a general partnership exists will be liable as if a general partnership exists.
GP management, salary, sharing of profits and losses
- 1. absent agreement, each partner entitled to equal control vote.
- 2. absent agreement, partners get no salary.
- 3. absent agreement, profits shared equally
- 4. absent agreement, losses shared like profits.
- priority of distribution. each level must be fully satisfied before starting the next level. order of priority:
- 1. pay all creditors (outside and inside)
- 2. all capital contributions by partners must be paid.
- 3. profits and surplus (shared equally without an agreement)
- a partnership with at least 1 general partner & at least 1 limited partner
- Liability - GP liable for all limited partnership obligations with right to manage the business.
- Limited partners - limited liability, not liable for the limited partnership's obligations.
registered limited liability partnership
- form via register by filing a statement of qualification & annual report with Secretary of State. Partnership becomes LLP at time of filing of statement or on the state specified in the statement.
- liabilities - no partner is liable for debts of the partnership itself, but individual partners can be sued for own wrongdoing.
limited liability companies
hybrid between a coporation and a partnership in which owners have same limited liability of shareholders & also the benefits of partnership tax status.
duties agents owes to principal
- in return for reasonable compensation & reimbursement of expenses, agents owe principals:
- 1. duty of care
- 2. duty to obey reasonable instructions
- 3. duty of loyalty. agent may never - engage in self-dealing, usurp the principal's opportunity, or make secret profits at principal's expense without disclosure.
(general partnership) right to participate in management
Under RUPA, absent an agreement to the contrary, all ps have equal right to manage business. decisions about matters within ordinary course of business of the partnership may be determined by majority vote. matters outside of the ordinary course of business require the consent of all partners.
Partner's power to bind partnership after dissolution
partnership will be bound by partner's act after dissolution if the act is appropriate for winding up the partnership. a partnership will also be bound by a partner's post-dissolution acts where the party with whom the partner dealt did not have notice of the dissolution.
(partners') fiduciary duties
- duty of loyalty =
- 1. P account for all profits or other benefits derived in connection with partnership business.
- 2. not deal with the partnership as one with an adverse interest
- 3. not compete with the partnership
- * duty of care - refrain from engaging in negligent, reckless, or unlawful conduct or intentional misconduct.
liability of incoming partner
an incoming partner is not personally liable for obligations incurred by the partnership before the person became a partner
liability of outgoing partner
an outgoing partner remains liable for obligations arising while he was a partner unless there has been payment, release, or novation. an outgoing partner can also be liable for acts done after dissociation.
partner's power to bind partnership after dissolution
p can be bound after dissolution by any act of a p appropriate for winding up the partnership's business. partnership will also be liable for other acts if the party with whom a partner dealt did not have notice of the dissolution. such liability can be limited by filing a statement of dissolution with the sec of state. all persons are deemed to have notice of a dissolution 90 days after such a notice is filed.
partners are not personally liable for the LLP's obligations
limited partner - fiduciary duty
generally, a limited partner owes no fiduciary duty to the partnership and, thus, is free to compete with the partnership and have interests adverse to those of the partnership, unless the partnership agreements provides otherwise.
limited liability limited partnership
any liability incurred while a limited partnership is LLLP belongs to the partnership alone; the general partner(s) is not personally liable on the obligation
What would you like to do?
Home > Flashcards > Print Preview