Agency + Partnership

Question 1

What types of authority?

Answer 1

Actual and Apparent (implied)

Question 2

How do you form a partnership ?

Answer 2

2 or more people agree to operate an ongoing business for PROFIT (Gen Partnership)

Question 3

Partner ability to bind partnership

Answer 3

Act of Partner apparently carrying on in the Ordinary Course of Business of the partnership binds the partnership

Question 4

Partner Can’t bind the partnership

Answer 4

When

1) the partner has no authority to act
- and -
2) the person HAS Knowledge he has no such authority

• An act of a partner that is not for carrying on in the ordinary course of business does NOT bind the partnership unless AUTHORIZED by OTHER PARTNERS

Question 5

Can an Agent bind the partnership ?

Answer 5

Yes - if acting w/in authority to act on behalf +

- actions necessary to achieving the objectives

Question 6

Agent Apparent Authority

Answer 6

Arises - based on the principal’s representations to 3rd Party

• It arises when the principal leads the 3rd party to believe the agent is acting with the principal’s authority.
• binds the partnership

Question 7

Personal Liability of Partner

Answer 7

• Not liable solely by being a partner
• Can become liable for partnership obligations based on misconduct
• Partners may also become liable for the negligence, wrongful acts or misconduct of any agent under their direct control

Question 8

Partner owes partnership duties –

Answer 8

Loyalty + Care

Question 9

Duty of Loyalty

Answer 9

• non compete

- refrain from appropriating assets for personal use

Question 10

Duty of Care

Answer 10

• not to engage in intentional misconduct

- knowing violations of the law

Question 11

Breach of Duties

Answer 11

Partner = liable for damages