Agency And Partnership

Question 1

Default answer regarding formation of partnerships:

Answer 1

A partnership is presumed formed.

Question 2

• Definition of partnership:
• Default form of partnership:

Answer 2

• Partners are co-owners of a business for profit.
• The default status of a partnership is that of a general partnership.

Question 3

factors that are together considered and weighed to determine whether a partnership has formed

Answer 3

1. Sharing of profits
2. Evidence Indicative of Partnership
   a. Title to Property
   b. Designation of Entity by Parties
   c. Extensive Activity Involved
   d. Sharing of Gross Returns
   e. Sharing of expenses
3. Failure to Share Losses Evidence of Intent Not to Form Partnership

Question 4

Writing requirements

Answer 4

No formal agreement is required to form a partnership;—the parties’ intent to associate as co-owners of a business may be implied from their conduct.

Question 5

Sharing of profits

Answer 5

A person who receives a share of the profits of a business is presumed to be a partner unless the profits were received in payment

Question 6

Partnership and torts

Answer 6

In a general partnership, partners are held jointly and severally liable for torts committed by partners dealing in the course of the business. This means that each partner may be held personally liable for the torts of his/her partners.

Question 7

The Doctrine of Exhaustion

Answer 7

The Doctrine has a protective effect over the personal assets of the partners.

• That is because exhaustion doctrine requires that a claimant pursue relief through the assets of the partnership before going after the partners’ personal assets.

-In a limited partnership, the limited partner is liable only for the percent of his investment in the partnership.

Question 8

In distinguishing between whether there is an employer-employee relationship or independent contractor relationship:

Answer 8

it is most helpful to look at the degree of control the employee or independent contractor has in terms of determining the how (the means and manner) of performing responsibilities.

Question 9

Partners owe the partnership and other partners four fiduciary duties:

Answer 9

1. Duty of Loyalty
2. Duty of Care
3. Duty of Obedience
4. Duty to provide complete and accurate information

Question 10

Employer/Employee vicarious liability

Answer 10

An employer may be held vicariously liable for negligence by an employee if that employee was acting within the scope of his employment when negligent.

• If an employee is largely acting in the scope of his employment with only a small deviation, this is still considered within the scope of employment, and the employer is still liable.
• A larger deviation, a frolic, is considered outside the scope of employment and the employer is not liable.

Question 11

For assessing employer liability,__________.

Answer 11

it is important to consider whether the employee was acting without permission. (Not pertinent to intentional torts).