Agency

Question 1

Agent

Answer 1

Power to bind the principal to contracts. Need actual or apparent authority.

Question 2

Actual Authority

Answer 2

Actual authority exists when the principal makes a manifestation that causes the agent to reasonably believe that the agent is authorized to act on the principal’s behalf.

Question 3

Apparent Authority

Answer 3

Apparent authority exists when a third party reasonably relies on manifestations by the principal concerning the agent’s authority to act on the principal’s behalf.

Question 4

Undisclosed principal

Answer 4

Third party had no notice of the principal’s exisitence.

Agent becomes party to the contract

Question 5

Partially Disclosed

Answer 5

Third Party is aware there is a principal but is not aware of their identity

Unless agreed to otherwise, the agent becomes a principal

Question 6

Ratified Contract

Answer 6

4 requirements

1. the principal must ratify the entire contract;
2. the principal and the third party must have legal capacity to enter into the contract;
3. the ratification must occur before the third party withdraws from the contract; and
4. the principal must know the material facts of the transaction.

Question 7

statement of qualification

Answer 7

Transforms a partnership into an LLP, does not create a new partnership.

Question 8

How can a partnership exscape liability when a partner has apparent authority

Answer 8

he third party with whom the partner was dealing cannot hold the partnership liable when that party knew or had received notification that the partner lacked authority. .

third party generally must possess actual knowledge of the partner’s lack of actual authority.

Question 9

Duty of Loyalty

Answer 9

a partner is prohibited from using partnership property or business to derive a personal benefit without notifying the partnership

Question 10

Duty of care

Answer 10

a partner is prohibited from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of the law.

Question 11

Consequences for Partner breaching partnership agreement

Answer 11

A partnership may pursue a legal action against a partner for breach of the partnership agreement or for violating a duty owed to the partnership that caused the partnership harm. A partner may pursue a legal action against the partnership or another partner to enforce the partner’s rights under the partnership agreement or the RUPA.