Agency

Question 1

requirements for an agency relationship

Answer 1

1) consent by both the principal and the agent that the agent will act for the principal’s benefit, and

2) that the agent is subject to the principal’s control

Question 2

scope of agent’s authority

Answer 2

A principal is not liable on a k entered into by an agent unless the agent had actual or apparent authority

Question 3

apparent authority

Answer 3

exists when a principal’s communications to a third party cause the third party to reasonably believe that an agent is authorized to act, even if the principal and the purported agent never so agreed.

third party with whom the agent acts reasonably believes the actor has authority to act on behalf of the principal and that belief is traceable to the principal’s manifestation

Question 4

actual authority

Answer 4

reasonably believes, in accordance with the principal’s manifestations to the agent, that the principal wishes the agent so to act

express: agent is given authority to act for the principal

implied: the authority that an agent has to take actions that are reasonably necessary to carry out the principal’s express instructions

Question 5

Ratification

Answer 5

even if the agent did not have authority to enter into a transaction, the principal can ratify the acts (and thus become liable) by expressly or impliedly affirming or accepting the benefit of the acts, so long as the principal knew that material facts and had capacity

Question 6

A person who purports to make a k with a third party on behalf of another person, lacking power to bind that person, gives

Answer 6

an implied warranty of authority to the third party and,

is subject to liability to the third party for damages for loss caused by the breach of that warranty, including loss of the benefit expected from performance by the principal.

Question 7

An agent who purports to act on his own account, but in fact is making a k on behalf of an undisclosed principal, is

Answer 7

also a party to the k

rationale for this rule is that the third party has every reason in the case of an undisclosed principal and agency to
assume that the person with whom it contracts expects to be liable on the contract

Question 8

When a third party contracts with a person that the third party knows is acting in an agency capacity for another but the third party is unaware of the identity of the principal, the principal for whom the agent acts is called a

Answer 8

partially disclosed principal

Question 9

A partially disclosed principal can be liable on a contract entered into by an agent who

Answer 9

had actual or apparent authority

Question 10

There can be no apparent authority in the case of an undisclosed principal bc

Answer 10

there are no manifestations from the principal to the third person

Question 11

partnership liablity - UPA (1997) § 306(a)

Answer 11

partners of a general partnership are liable jointly and severally for all obligations of the partnership

partnership could become
obligated for the loss caused if partner was acting in the ordinary course of the partnership business.

Question 12

UPA (1997) § 306(b) - partner liability for persons admitted to an exissting partnership

Answer 12

not personally liable for any partnership obligations
incurred before the person’s admission

Question 13

UPA (1997) § 1001, a general partnership can make an election and become a LLP if

Answer 13

the partners approve the conversion by a vote equivalent to that necessary to amend the partnership agreement and,

the partnership then files a statement of qualification that specifies the name of the partnership, its principal office, and its election to be
an LLP

Question 14

can also effectuate a conversion from partnership to LLP by

Answer 14

forming a new LLP and transfer the assets of the
old general partnership to the new LLP

Question 15

UPA (1997) § 306(c), an obligation incurred while a partnership is an LLP

Answer 15

is solely a partnership obligation

Question 16

To create a valid limited partnership, statutory requirements must be met

Answer 16

must include a general partner who has signed the initial Certificate of Limited Partnership filed with the Secretary of State

Question 17

responsibilities of members in limited partnership

Answer 17

limited partners have limited liablity (limited to their capital contributions)

general partners are liable for all partnership obligations and manage control of the business.

Question 18

Respondeat Superior

Answer 18

employers are liable for the actions of an employee when the employee is acting within the scope of his employment

Question 19

Employee acting within the scope of his employment

Answer 19

physical conduct in the
performance of the services is subject to the employer’s control or right to control

An employee’s act is not within the scope of employment when it occurs within an independent course of conduct not intended by the employee to serve any purpose of the employer

Question 20

factors for independent contractor vs. employee

Answer 20

1) the level of skill required
to perform the work,

2) who supplies the instrumentalities used,

3) the duration of the relationship,

4) and whether the work is part of the principal’s regular business.

No single factor is
determinative.

Question 21

An employee’s conduct is within the scope of his employment if

Answer 21

(1) it is of the kind that the
employee is employed to perform;

(2) it occurs substantially within the authorized time and
space limits; and

(3) it is motivated, at least in part, by a purpose to serve the employer.

The fact that the act was not authorized is not determinative

Question 22

Employer employee liability for torts

Answer 22

Generally, an employer is subject to vicarious liability for torts committed by an employee acting within the scope of employment

or where third party reasonably believes that the agent or other actor has
authority to act on behalf of the principal and that belief is traceable to manifestations made by the principal.

Question 23

Whether or not a principal is vicariously liable for actions of an agent, a principal who conducts an activity through an agent is subject to liability for harm to a third party caused by the agent’s conduct if the harm was caused by the principal’s negligence in

Answer 23

selecting, training, retaining,
supervising, or otherwise controlling the agent

Question 24

Although a principal generally is not vicariously liable for the physical torts of non-employee agents, a principal can be
vicariously liable under some circumstances to a third person for torts committed by a non-employee agent where

Answer 24

the agent acts wtih apparent authority

Question 25

partnership

Answer 25

an association of two or more persons to carry on as co-owners a business for profit whether or not the persons intend to form a partnership

a person who receives a share of the profits of a business is presumed to be a partner in the business, unless the profits were received in payment for services as an independent contractor or of wages or other compensation of an employee

Question 26

Partnership authority to act

Answer 26

Even if a partner lacks actual authority, a limited liability partnership can be bound by the acts of a partner, including the execution of an instrument in the partnership name, if the partner was apparently carrying on in the ordinary course the partnership business or business of the kind carried on by the partnership

Question 27

a partner does not have actual authority to take

Answer 27

unusual or non-customary actions that will have a substantial effect on the partnership

Question 28

Partnership liability for wrongful acts of another partner

Answer 28

Generally, a partnership is liable for loss or injury caused to a third party because of the wrongful act of a partner acting in the ordinary course of partnership business

Partners are personally liable for the obligations of a general partnership.

Question 29

Partnership liability for own wrongful acts

Answer 29

Partners can become liable, however, for partnership obligations based on their own personal misconduct.

Question 30

Parntership reimbursement to a partner for purchases

Answer 30

A partnership must reimburse a partner for any payment made by the partner in the course of the partner’s activities on behalf of the partnership.

Question 31

Rights to management in a partnership - RUPA §401(h)

Answer 31

each partner has equal rights in the management and conduct of the partnership’s business

Question 32

RUPA 401(k) - Matters outside of the general course of the partnership business

Answer 32

must be unanimously approved by the partners

A difference arising as to a matter in the ordinary course of business of a partnership may be decided by a majority of the partners.

An act outside the ordinary course of business of a partnership and an amendment to the partnership agreement may be undertaken only with the affirmative vote or consent of all the partners (new member or selling land)

Question 33

RUPA § 401(h) - scope of a partner’s authority is governed by

Answer 33

agency law principles

If the partnership agreement is silent on the scope of the agent-partner’s authority, a partner has actual authority to commit the partnership to usual and customary matters, unless the partner has reason to know that (i) other partners might disagree, or (ii) for some other reason consultation with fellow partners is appropriate

Question 34

Disassociation from the partnership

Answer 34

A partner is dissociated from a partnership when the partnership has notice of the partner’s will to withdraw as a partner.

can dissociate at any time

notice doesnt need to be in writing

Question 35

dissociation is rightful when

Answer 35

when the partnership is at will and the dissociation breaches no express provision in the partnership agreement

rightful = dissociating partner has no obligations to the other partners

cannot cause a buyout of dissociating partner’s interest or seek damages

Question 36

dissociation is wrongful when

Answer 36

it is done in contravention of the terms of the partnership agreement

wrongful dissociating partner can be liable to the partnership & partners for any damages caused by the dissociation

cannot participate in the winding up of the business

Question 37

partnership at will

Answer 37

a partnership in which the partners have not agreed to remain partners until the expiration of a definite term or the completion of a particular undertaking

Question 38

under UPA a partnership agreement cannot modify the right to

Answer 38

dissociate except to require that a dissociation notice be in writing

Question 39

a partner’s dissociation in an at-will partnership results in

Answer 39

its dissolution, and the business must be wound up

such dissolution can be rescinded by the affirmative vote or consent of all remaining partners to continue partnership

then the dissociating partner is no longer considered a partner and does not participate in this decision to continue the partnership

Question 40

When a partnership is continued and not dissolved, the dissociating partner is entitled to

Answer 40

value of his interest less damages he caused if wrongfully causing the dissoultion

if the withdrawing partner makes a written demand for payment and no agreement is reached within 120 days after the demand, the partnership must pay in cash the amount it estimates to be the buyout price, including accrued interest

Question 41

if after dissociating other partners chose to not continue the business, the dissociating partner

Answer 41

would have the same rights to the partnership property as other partners would have minus any damages he would owe them if wrongful dissociation

Question 42

During the winding-up process, partners who participate in the winding up of partnership business continue to have a

Answer 42

fiduciary relationship to the partnership and the other partners

partner must perform his duties during the winding up of the partnership business consistently with the contractual obligation of good faith and fair dealing

Question 43

A partner who learns of a business opportunity during the term of a partnership may not

Answer 43

appropriate that opportunity (without sharing with his
co-partners) during the winding-up process or after the partnership term ends

Question 44

Partnership obligations appropriately incurred during the winding up process are

Answer 44

obligations of all partners including a dissociating partner

Question 45

Duties in a partnership

Answer 45

Under RUPA, a partner owes to the partnership and the other partners the duties of loyalty and care.

liable for damages for breach of these duties

Question 46

fiduciary duty of loyalty in partnership

Answer 46

includes the obligation to refrain from appropriating partnership assets for personal use

Question 47

duty of care in partnership

Answer 47

includes a duty not to engage in intentional misconduct and knowing violations of law

Question 48

duties of loyalty and care run both to

Answer 48

partnership and the other partners

Question 49

creditor vs partner

Answer 49

presumption of partnership does not apply where those profits are received in payment of a debt by installment or otherwise

Question 50

a partner has a ___ interest in the profits and losses of the partnership and in her tight to receive distributions

Answer 50

transferable

transfer of that interest is permissible and creates in the transferee a right to receive distributions to which the
transferor would otherwise be entitled

Question 51

a transfer of the partnership interest does not make the transferee a partner unless

Answer 51

the other partner or partners consent to making the transferee a partner.

Question 52

Property is partnership property if

Answer 52

it is acquired in the name of the partnership

Partnership property is property of the partnership and not of the partners individually

Question 53

for someone to collect a debt against a partnership from the partners personally, he must

Answer 53

obtain judgment against the partners individually and against the partnership

Question 54

negligence per se

Answer 54

An actor is negligent if, without excuse, the actor violates a statute that is designed to protect against the type of accident the actor’s conduct causes, and if the accident victim is within the class of persons the statute is designed to protect.

Question 55

Indemnification (full reimbursement for damages paid to the plaintiff) is available to a tort defendant who has

Answer 55

paid the plaintiff’s damage award when, as between the paying and nonpaying defendants, the paying defendant was not at fault in causing the plaintiff’s injuries
and the non- paying defendant was at fault.

Question 56

joint tortfeasor who was at fault in causing the plaintiff’s injuries is entitled only to contribution, i.e., partial reimbursement for damages paid to the plaintiff