AGENCY AND PARTNERSHIP

Question 1

Agency

Answer 1

Agency is the fiduciary relation which arises when one person ( the principal) manifest assent to another (the agent) that the agent will act on the principal’s behalf and subject to his control, and the agent manifests assent to act on behalf of the principal.

Question 2

Actual Authority

Answer 2

Actual authority is the authority an agent reasonably believes he possesses. Actual authority can be express or implied.

Question 3

Apparent Authority

Answer 3

When an agent does not have actual authority, the principal can still be liable to a third party fo the agent’s acts under the theory of “apparent authority” when (1) the third party reasonably believed the agent had authority, and (2) the third party’s belief is based on the principal’s own actions.

Question 4

Inherent Authority

Answer 4

Inherent authority exist when the principal is liable to a third party for the actions of the agent even though the agent had no actual or apparent authority to perform a particular act.

Question 5

Disclosed Principal

Answer 5

A principal has been “disclosed” to a third party if the third party knows both the existence and identity of the principal.

Question 6

Undisclosed Principal

Answer 6

A principal has been “undisclosed” to a third party if neither its existence nor its identity is known to the third party.

Question 7

Unidentified Principal

Answer 7

A principal is “unidentified” to a third party if its existence, but not identity, is knows to the third party.

Question 8

Partnership

Answer 8

A partnership is an association of two or more persons who are carrying on as co-owners of a business for profit. Under RUPA, a partnership is an entity distinct from its partners.

Question 9

Limited Liability Partnership

Answer 9

Under RUPA, a limited liability partnership is a partnership, without limited partners, where each partner is a professional authorized by law to render a professional service