Agency and Partnerships Flashcards
who must have contractual capacity to enter into an agency relationship
the principal
to create an agency relationship _____ by both the principal and agent is needed
consent
_____ is created where a principal holds another out as his agent to a 3rd party
apparent authority
- makes the principal a party to the K with contractual rights and liabilities
duties owed by an agent to a principal
- to carry out the agency with reasonable care
- to obey all reasonable directions of the principal
- to notify the principal of all matters that come to the agent’s knowledge affecting the subject of the agency
implied actual authority is…
the authority an agent believes she has based on her communications and relationship with the principal
primary overriding factor in determining whether a person is an employee
whether the principal has the right to control the manner and method of performance
elements to establish a principal’s liability under the doctrine of respondeat superior
- employer-employee relationship AND
- conduct within the scope of employment
detour
minor deviation from an employer’s directions generally falls within the scope of employment
frolic
major deviation from an employer’s directions falls outside the scope of employment
what kind of authority results from a situation where a principal limits the actual authority of his agent to act, the agent acts beyond the scope of the limitation, and a 3rd party with whom the agent dealt was unaware of the limitation
apparent
for the possessor of goods to be able to transfer good title without authority, she must have either…
some indicia or ownership OR be a dealer in the goods
the type of actual authority contained within the four corners of an agency agreement is…
express authority
who can be bound to a K when the principal’s ID is disclosed to the 3rd party and the agent had authority to enter the K
the principal and, if the parties intended the agent to be a party to the K, the agent
a principal gives his agent authority to enter a K with a 3rd party. the agent discloses to the 3rd party that a principal exists, but does not disclose the principal’s ID. who is bound
both the principal and agent
who can be bound on a K when the principal is undisclosed to the 3rd party and the agent had authority to enter the K
both the principal and agent
if a principal negligently selects an incompetent independent contractor, the principal will be liable to the injured 3rd party for
her own negligence in selection
duty implied by law that an agent owes to a principal
- duty of loyalty
- duty of obedience
- duty of reasonable care
an agent will be held liable to the principal for breaches of a…
subagent - even if agent exercised diligence and good faith in appointing the subagent
unless otherwise agreed, a principal owes an agent a duty of…
- compensation
- duty to indemnify her for all expenses or losses reasonably incurred in discharging any authorized duties
- duty to cooperate
- whatever duties may be imposed by a K with an agent
two types of agency relationship that may not be unilaterally terminated by the principal
- agent has an interest in the subject matter of the agency
- power is given for security
the existence of apparent authority usually requires
the reasonable belief by a 3rd party that the agent had authority to act
a principal will NOT be bound by the agent’s acts where the principal limits the actual authority of the agent to act, and a…
third party with whom the agent deals knows of the limitation but the agent acts beyond the scope of the limitation anyway
a principal may hold out another as possessing authority, inducing a 3rd party to reasonably believe authority exists by
- words stated by the principal
- conduct on the part of the principal
- inaction on the part of the principal
an employer will be liable for the torts that result from friction naturally engendered by the…
employer’s business
if an employer lends the services of her employee to another and the employee commits a tort while performing in his loaned role, who is liable
the loaning employer, if the employee remains under the right of control of the loaning employer
what is required to form a partnership
intent to run a business as co-owners
a partner is not entitled to remuneration except for services rendered in….
winding up the partnership’s business
apparent authority is authority a 3rd party reasonably believes a partner has based on…
him being held out by the partnership as a partner
under the TBOC, at what point may a creditor proceed directly against a partner on a partnership
when the partnership is bankrupt
a partner in an LLP is personally liable for…
her own acts of negligence
an affirmative vote of a majority of all members of an LLC is required to approve actions that would…
make it impossible for the company to carry on ordinary business
what actions require the affirmative vote of ALL LLC members
- amending the certificate of formation or company agreement
- issuing new membership interests in LLC
- changing the structure of the LLC from member-run to manager run or vice versa
what is necessary to form an LLC
the filing of a certificate of formation with the secretary of state
factors that indicate the existence of a partnership
- agreement to share losses or liabilities for claims by 3rd parties against the business
- right to receive a share of the profits
- participation in control of the business
partnership by estoppel
when a person, by words or conduct, represents herself or permits another to represent her as a partner, she will be liable to 3rd parties who extend credit to the actual or apparent partnership
general partner liability
- partners are jointly and severally liable for all obligations of the partnership
- partners are personally and individually liable for the entire amount of all partnership obligations
- incoming partners are not personally liable for any partnership obligation incurred before their admission to the partnership
required to form a limited partnership
- certificate of formation filed with the secretary of state
- office where records are maintained
- agent in the state to receive service of process
- written partnership agreement or some other record must contain info about partner’s contributions, the events that will require winding up of the partnership, and the date on which each partner became a partner
a person who erroneously believes herself to be a limited partner can avoid being held liable as a general partner if, on ascertaining the mistake, she files a certificate of formation or amendment with the secretary of state or…
withdraws from future equity participation in the enterprise and files a certificate to that effect with the secretary of state
a limited partner is liable as a general partner if she participates in the control of the business and the person dealing with the limited partnership…
reasonably believes that the limited partner is a general partner
a member or manager of an LLC is generally liable for..
- any distribution made to the member that the member knows caused the liabilities of the company to exceed the fair value of its assets
- the debts, obligations and liabilities of the LLC set out in the company agreement
- contributions of cash or property that the member promises to the LLC
transferability of an LLC interest
- membership interest in an LLC is assignable
- assignee of an LLC membership interest becomes full member if all members of the LLC consent
- a person may become an assignee of an LLC membership interest through divorce or upon a member’s death
management of an LLC
- presumed that managers will manage an LLC
- company agreement may limit the ability of a manager or member
- certificate of formation may not limit liability for breach of the duty of loyalty
partner’s fiduciary duty to the partnership
- refrain from competing with the partnership
- exercise the degree of care an ordinarily prudent person when acting on behalf of the partnership
- account to the partnership for any benefit derived by her use of the partnership property
PLLC
every member must be licensed to render the professional service
when is a member of an LLC also an agent of the LLC for purposes of the LLC’s business
when the certificate of the formation vests mgmt of the company in its members
