agency Flashcards
1
Q
What is an agency relationship?
What capacity is needed?
Does it require a written agreement?
Subject to SOF?
A
- fiduciary relationship by consent
- principal needs contractual capacity, not agent
- doesn’t necessitate written agreement
- may be subjected to sof
2
Q
actual express authority
Incl:
- where to find?
- medium of agreement
- how can org grant
A
- explicitly granted
- in four corners of agency agreement
- written or oral
- also granted through decision-making process of org
3
Q
implied authority
A
- agent reasonably believes they have auth
- b/c of principal’s actions
can be - incidental to express authority
- implied from acquiescence
4
Q
How is authority terminated (5)
A
- Event/time
- change of circs
- breach of fiduciary duties
- unilateral act
- death or incapacity
5
Q
exception to apparent auth in partnership ocob
A
actions by partner in ordinary course of business bind partnership UNLESS
1. partner lacks auth
2. third party knew or was notified
6
Q
apparent authority
A
- partnership portrays partner as having auth
- others led to reasonably believe auth exists
ex: actions by partner in ordinary course of business bind partnership
7
Q
Are mere representations of agent sufficient to create apparent auth
A
No
8
Q
What kind of authority can power of position create
A
- agents title or position can establish
- apparent and actual implied authority
9
Q
lingering authority
A
- agent whose actual authority has ended retains apparent authority
- maintained with all third parties p knows a interacted with
- until parties receive actual or constructive notice of termination
10
Q
Authority/agency ratification + can it modify the rights of intervening parties
A
- creates relationship
- individual acting as agent w/o actual authority
- actions subsequently validated by the principal
- cannot modify the rights of intervening parties
11
Q
principal requirements for ratification
A
- aware of all material facts
- accept the transaction
- capacity to accept transaction
12
Q
When is principal liable for agency contracts?
When is agent also liable?
A
- principal, not agent, liable if actual auth, apparent auth, or ratification
- if principal undisclosed or partially disclosed, agent also liable
13
Q
agent’s fiduciary duties
A
- duty of (reasonable) care (in carrying out agency)
- duty of loyalty (accounting for profits, acting solely for p’s benefit, avoiding adverse deals, refraining from competing, not using principal’s property incl. confidential info)
- duty of obedience to all reasonable instructions from principal
14
Q
principal’s duties to agent
A
- not fiduciary
- indemnify agent for expenses & losses in service of p
- compensate agent for services
15
Q
tort liability (agency)
- scope
- j&s l?
- intentional torts?
- detours & frolics?
A
- w/in scope of employment
- joint & several liability
- generally not liable for intentional torts unless NIA (necessary for employer’s goals, inherent to job, authorized by employer)
- may be liable for torts committed during detours but not frolics
16
Q
diff b/w ind contractor and employee
A
factor:
- control over means and results
- skill required
- use of tools and facilities
- duration of employment
- compensation basis
- presence of distinct business
17
Q
partnership formation
A
- 2+ persons associate to conduct business as co-owners
- for profit
- sharing of profits key indicator of partnership UNLESS payments of debt, wages, rent, or loan interest
- written agreement not mandatory but may be required by statute of frauds
18
Q
Formal partnership agreement
- necessity for formation?
- what does it allow?
- format?
A
- not necessary for formation of partnership
- allows partners to adjust most statutory provisions
- can be written, oral, or implied
19
Q
partnership voting and management rights
- what % to each p?
- % required for votes in normal course of p?
- outside normal course?
- p right to salary or compensation beyond profit shares?
A
- all partners equal in management and voting rights
- normal course of partnership -> majority consent
- outside normal curse -> unanimous consent
- partners -> no right to salary or compensation beyond profit shares
20
Q
partnership financial rights (profits/losses)
A
- profits shared equally (standard rule, unless modified)
- losses apportioned in the same manner as profits (losses follow profits)
21
Q
limited partnership
A
- 1+ gp
- 1+ lp
- gps personally liable for obligations
- lps typically no liability beyond agreed-upon contributions
- requires certificate of lp w/ ss for valid formation
22
Q
limited liability partnership
- what is (how created)
- benefit
- personal liability
A
- gp + filed statement of qualification w/ ss
- benefit: partners not personally liable for llp’s obligations
- partners remain personally liable for personal wrongful actions
23
Q
general partnership
- what
- intent?
- formalities?
- j&s l?
- tortious liability?
- indemnification?
A
- 2+ persons who agree to jointly run a business for profit
- no intent requirement (i.e., don’t need to intend to form partnership)
- no formalities required
- joint & several liability for all obligations of partnership, whether contract or tort
- partners liable for tortious acts by partner or employee in ocob or with authority
- one partner who pays or satisfies whole partnership obligation entitled to indemnification or contribution from other partners
24
Q
partner (gp)
A
- agree with at least one other person to co-own a business for profit
- person who receives share of profits presumed to be partner,
- UNLESS profits received as rent or when gross returns (not gross profits) being shared
25
vicarious liability
- partners vicariously liable for
- tortious acts committed by employee of partnership
- in ocob or with authority
26
partnership liability in contract
- which contracts
- entered into by whom
- real estate binding on 3ps?
- others binding on 3ps?
- liable for contracts entered into on its behalf
- by partners with actual or apparent authority
- real estate treated diff
- real estate transfers binding on 3ps if (1) statement of partnership auth filed with ss & (2) recorded
- all other transactions binding on partnership but not 3ps
27
fiduciary duties of partners
- duty of loyalty to account for benefits derived in conducting partnership business or using partnership property
- refrain from dealing adversely with partnership
- refrain from competing with partnership
- duty of care to refrain from gross negligence or recklessness, intentional misconduct, or knowing violation of law
- duty of disclosure
28
partnership property
- when presumed
- is partner co-owner of partnership property?
- presumed partnership property if purchased with partnership funds
- partner is not co-owner of partnership property and has no interest that can be transferred
29
When is property presumed the partner’s (ie, not partnership) property
presumed partner's property if
1. acquired in her name
2. without using partnership funds &
3. no indication she was acting for partnership
30
partnership ownership interest
- transfer management rights?
- transfer financial rights?
- transfer makes transferee partner?
- partner cannot unilaterally transfer management rights
- partner may unilaterally transfer financial rights
- transfer of financial rights does not make transferee partner
31
dissociation, 5 ways it can happen
- occurs when partner withdraws from partnership via:
1. notice to partnership
2. expulsion
3. death,
4. bankruptcy, or
5. due to an agreed upon event
32
wrongful dissociation
- if withdrawal is in breach of express-term of partnership agreement
- only if for term; cannot wrongfully dissociate if partnership at will
- liable for damages
33
wrongful dissociation outcome
- partnership assets will be liquidated or
- partnership can continue and other partners can buyout dissociating partner's interest
34
dissolution & winding up
- only in limited circs
- at-will partnership: any partner who dissociates by express will may compel dissolution
- term partnership: one partnership dissociates wrongfully or due to death or bankruptcy, dissolution only occurs if one-half of remaining partners agree to wind up
35
priority of distribution on dissolution
1. all creditors (outside & inside, i.e., including partners)
2. repay all capital contributions paid in by partners
3. any profits or losses are addressed
36
when can principal be vicariously liable to 3p for torts committed by non-employee agent where agent deals with 3p
when actions taken by agent with apparent authority constitute a tort
