Agency and Partnerships

Question 1

types of business organizations

Answer 1

1) sole proprietorship
2) partnership
3) corporation

Question 2

types of partnerships

Answer 2

1) general partnership
2) limited partnership
3) limited liability partnership
4) limited liability companies

Question 3

what type of business makes up most business organizations

Answer 3

sole proprietorship

Question 4

may a principal be held legally responsible for the actions of an agent?

Answer 4

yes

Question 5

what does the existence of an agency relationship depend upon?

Answer 5

principal’s consent that an agent will act on his behalf within a fiduciary capacity and the agent consents

Question 6

is an agent liable as a party to a contract if the contracting party knows who the principal is?

Answer 6

no

Question 7

when the contracting party knows who the principal is

Answer 7

a disclosed principal

Question 8

is the agent liable if the contract party does NOT know who the principal is?

Answer 8

yes

Question 9

when the contracting party does NOT know who the principal is

Answer 9

undisclosed principal or partially disclosed-principal

Question 10

types of agent authority

Answer 10

1) actual
2) apparent
3) inherent

Question 11

what is actual authority?

Answer 11

when the agent reasonably believes the words of the principal

Question 12

is actual authority implied or express?

Answer 12

either one

Question 13

what is apparent authority influenced by?

Answer 13

prior practices and industry customs

Question 14

is apparent authority implied or express?

Answer 14

either one

Question 15

what are the elements of ratification?

Answer 15

1) principal must be aware of material facts
2) implicit or explicit
3) not permissible if being used to the detriment of an innocent third party

Question 16

an agent performing services in the master’s affairs whose physical conduct is controlled or is subject to the right of control by the master

Answer 16

servant

Question 17

a person who agrees to carry out some task for another but is NOT SUBJECT TO THE OTHER’S PHYSICAL CONTROL

Answer 17

independent contractor

Question 18

on who’s behalf does the agent-type of independent contractor act upon?

Answer 18

on the principal’s behalf

Question 19

on who’s behalf does the non-agent type of independent contract act upon?

Answer 19

his/her own behalf 1

Question 20

what type of relationships = agency relationships?

Answer 20

1) master & servant
2) employer & employee
3) independent contractor (agent-type)
4) non-servant agent

Question 21

when is the master liable?

Answer 21

when it’s in the scope of employment

Question 22

what special cases is the principal liable?

Answer 22

1) retention of control
2) incompetence
3) nuisance/ultra-hazard
4) non-delegability

Question 23

what type of relationship is a non-agent relationship?

Answer 23

independent contractor (non-agent)

Question 24

what are the general rules of the scope of employment?

Answer 24

1) was the conduct the kind of conduct that the servant was employed to perform?
2) was the conduct motivated at least in part by a purpose to serve the master?
3) did the conduct occur substantially within the authorized time or space limits of the employment?

Question 25

how is a general partnership taxed?

Answer 25

not taxed separately from owners

Question 26

what type of liability exposure does a partnership have?

Answer 26

unlimited

Question 27

what type of transferability of ownership does a partnership have?

Answer 27

not readily transferable

Question 28

what’s the lifetime of a partnership?

Answer 28

traditionally limited

Question 29

elements of partnership be estoppel

Answer 29

1) expessed or implied that one person is a partner to the other
2) representation must be by the person sought to be charged as a partner
3) reasonable reliance in good faith by plaintiff upon representation
4) injury due to plaintiff’s reliance

Question 30

when a partner is involuntarily expelled from the business what must his exclusion have been?

Answer 30

bona fide or in good faith