A & P Flashcards
agency elements
- Elements – ABC
o Assent
o Benefit
o Control
- Termination of agency
o Manifestation by either party
o Expiration
o Death
- Common law —> terminated regardless of whether third party has notice of death
- Some states —> NOT terminated until 3rd party has notice
o Incapacity (unless durable power of attorney)
actual authority
A acts in their reasonable understanding of authority (even if mistaken)
Express —> Ps explicit directions
Implied —> either
* Action necessary to follow Ps authorized duties
* A acted similar in prior dealings with P
* Custom for A in that position
apparent authority
2 requirements:
(1) 3rd party reasonably believes A has authority to act on Ps behalf
AND
(2) belief is traceable to Ps manifestations (P has held A out to have authority)
o Happens when P
- Gives A a position or title indicating authority
- Previosly held agent out and did not publish revocation
- Cloaked agent w/ appearance of authority
o Continues until P communicates termination to 3rd parties
NOT applicable if 3rd party had knowledge A did not have actual authority
Disclosure of P
* Unidentified/Partially Disclosed P —> AA can exist
* Undisclosed P —> AA CANNOT EXIST
inherent agency power
protects 3rd parties when no actual/apparent authority in 2 types
o First type —> employer is liable when
A acts in furtherance of employer’s business AND harms 3rd party
o Second type —> if A violates Ps orders and no act/app authority, inherent authority applies when:
Agency relationship exists AND agent engaged in acts generally of a kind that would fall in his actual authority but for Ps instructions
agent liability to 3rd parties
when is there liability?
where is there not liability?
when can an agent indemnify their P?
No liability if —> full disclose P to 3rd party AND act within scope of authority
Yes liability if —> conduct unauthorized OR P was undisclosed/partially disclosed to 3rd party
Agent can indemnify P if —> A liable AND conduct authorized
vicarious liability for As torts
Employee vs. Indep Contractor
Respondeat superior for negligence
Intentional torts —> generally outside scope unless
Intentional torts —> liabilty for acts outside scope
Employee vs. Indep Contractor
PRIMARY FOCUS whether P had right to control the manner and method the job was performed (and theres 11 factors)
Respondeat superior —> employer liable for employee’s negligent acts if employee was acting within the scope of employment
- Within scope when: performing work assigned by employer OR engaging in course of conduct subject to employer’s control
- Time/place/purpose test courts look at —> if act was the kind employee was employed to perform, occurs sustantially within authorized time and space limits, at least partial motivation to serve employer
REMEMBER: frolic v. detour
Intentional torts —> generally outside scope unless
- Employer authorized
- Act driven by desire to serve employer
- Act was natural occuring friction of employment
Intentional torts —> liabilty for acts outside scope
- Employer intended conduct/consequences
- Employer negligent/reckless in hiring/supervision
- Non-delagable duty
- Employee had aparent authority, the AA enabled the tort, AND the 3rd party reasonably relied on the AA
Fiduciary Duties of P and A
o Care —> use reasonable care
o Loyalty —> act solely and loyally for Ps benefit
o Obedience —> obey all reasonable directions
General Partnership
creation
liability
how to upgrade to LLP
disassociation in at-will Pship
how to dissolve Pship if not fully at-will
Creation
2+ people
Carrying on business for profit
AND anyone sharing profits (except employees or general contractors) are presumed partners
Liability
ALL partners liable personally, joint and several, for ANYTHING business does or fails to do in OCOB (even another partner’s illegal conduct)
Upgrade to LLP through majority vote of partners
If one partner leaves, the whole thing implodes
dissassociation leads to dissolution in at will pship (unless agreed otherwise)- WET circumstances
Written consent of all partners
Event that everyone agrees upon happens or something illegal going on
Term ends
Limited Partnership
creation
how to lose LP status and be considered a GP
disassociation
Creation —> “substantial compliance”
Sign a certificate of limited partnership
At least one GP, at least one LP
You lose your LP status by acting like a GP
Disassociation
WET factors
If all the LPs leave, they have 90 days to get at least one LP
Not an auto dissolution
LLP
- how to transfer from another pship type
- how to create
Approval by same number of voters necessary to amend partnership (if already another pship type)
Sign statement of qualification
LLP partner rights
Profit/loss share in proprtion to their contributions
Salary and reimbursement (if agreed prior)
Transfer interest in the sahre of the profits/losses and/or distributions (nothing else)
Management/binding Pship
* Unamious votes for decisions outside OCOB
* Equal rights to comnage ordinary affairs OCOB BUT majority vote wins if disagreement
Inspection rights —> any partner can inspect Pship records during normal biz hours for any reasonable reason (in good faith/fair dealing)
GP —> personally liable
LP —> not personally liable, with exceptions
Pship partner agency
o Partners are all agents of pship
Pship fiduciary duties
must act in good faith
Care —> can only violate with gross negligence or recklessness
Loyalty —> no competition, no unfair transactions w/ pship, no conflicts of interest, must account for all benefits derived from Pship
* Excpetion: full disclosure AND unamious consent
Account —> for any profits
Pship remedies in fiduciary breach
Partners can sue partners
LPs can sue w/ derivative claim if GP refuses to sue (or can show demand futile)
