Agency and Partnerships Flashcards
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
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.
A principal is an undisclosed principal if…
the third party has no notice of the principal’s existence. An agent who enters into a contract on behalf of an undisclosed principal becomes a party to the contract. Thus, when the agent does not inform a third party of the identity or the existence of the principal, the agent becomes liable to the third party on the contract.
What is a partially disclosed principal?
A principal is a partially disclosed principal if the third party has notice of the principal’s existence but not the principal’s identity.
a principal can ratify an act that was done on the principal’s behalf. There are four requirements for ratification:
(i) the principal must ratify the entire contract; (ii) the principal and the third party must have legal capacity to enter into the contract; (iii) the ratification must occur before the third party withdraws from the contract; and (iv) the principal must know the material facts of the transaction.
What are some of the key parts of a LLP
An LLP is a partnership in which a partner’s personal liability for obligations of the partnership is eliminated. In other respects, an LLP is governed by the same rules as a partnership.
What is the liability of a new partner in a LLP?
A person admitted as a partner into an existing partnership is not personally liable for any prior partnership obligations. However, any capital contribution made by an incoming partner to the partnership is at risk for the satisfaction of such partnership obligations.
What is the relationship of a partner to the partnership
A partner is an agent of the partnership for the purpose of its business and can contractually bind the partnership when the partner acts with either actual or apparent authority. A partner’s act that was authorized by the partnership binds the partnership.
Is a limited partner in a LLP personally liable for an obligation of the LLP?
No. A limited partner in an LLP is not personally liable for an obligation of an LLP, regardless of the type of obligation.
When way the partnership and partners pursue legal actions against each other?
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.
