Agency and Partnership Flashcards
An agency relationship is created when…
A person (principal) manifests an intent that another person (agent) act on his behalf and both consent to the agreement
Actual authority is…
Authority that the agent reasonably thinks he possesses based on the principal’s dealings with him.
*Can be express or implied from principal’s actions
Apparent authority exists when…
The principal “holds out” the agent as having certain authority, causing third parties to reasonably believe the agent has such authority
A partnership is formed when…
2 or more people associate to carry on as co-owners of a business for profit
*A person who receives a share of the profits is presumed to be a partner
For the purpose of its business, each partner is a(n) _________ of the partnership.
Agent
A partnership can be bound on a contract if the partner entering into it had…
Actual or apparent authority
The act of any partner apparently carrying on in the ordinary course of the partnership business or business of the kind carried out by the partnership will bind the partnership unless…
The partner had no authority to act for the partnership and the third party with whom the partner dealt knew that the partner lacked authority
Actual authority to enter into matters outside the ordinary course of business requires…
Unanimous consent of all partners.
Each partner being jointly and severally liable means…
Each partner is personally liable for the full amount.
Independent Contractor Estoppel Theory
When the Plaintiff creates the appearance that an employer-employee relationship exists, and a third party relies on that relationship, the Plaintiff is estopped from denying the existence of an employment relationship
A partner is dissociated from the partnership on…
Notice of his express will to withdraw
*A partnership at will is dissolved and its business must be wound up when withdrawal intent is relayed
A partnership will be bound by a partner’s post-dissolution act if…
The act was appropriate for winding up the business
A partnership will be bound by a partner’s post-dissolution act NOT appropriate for winding up if…
The 3rd party did not have notice of the dissolution and the act would have bound the partnership before dissolution (ie partner had actual/apparent authority to act)
Where one partner pays the whole of a partnership debt, he/she may…
Require the other partners to pay pro rata share
Unless agreed otherwise, how are profits and losses divided?
Profits = shared equally
Losses = split in the same ratio as profits
Actual authority for ordinary business matters requires…
A majority vote by the partners
A judgement creditor must first seek satisfaction from __1__ and then __2__
1) the partnership
2) the partners personally to the extent not covered by partnership assets
A limited partnership consists of…
At least one general partner and one limited partner
A limited partnership is not formed unless…
A certificate of limited partnership is filed with the state and is signed by all general partners
A judgement will NOT be personally binding on a partner who…
Has not been served
Absent a contrary agreement, each partner has _____ management rights.
Equal
Each partner owes a fiduciary duty to the partnership and must…
1) account for benefits derived by the partner from the business, and
2) not compete with the partnership
An at-will partnership is…
The type of partnership created when no definite term or particular understanding is specified
