Agency & Partnership Flashcards
General Characters of Agency
- Principal: Controls agent
- Agent: Acts on behalf of principal
Define
Agency and Partnership tort Liablity
Principal will be liable for torts committed by the agent if
1. a principal/agent relationship exists and
2. tort was committed by agent within the scope of relationship.
Requirements of the Principal/Agent Relationship
Assent - Voluntary, informal agreement between princpal & agent.
Benefit - Agent’s conduct is for principals benefit
Control - principal has right to control agent by having superviosry power.
A sub-agent is not vicariouly liable unless they have ABC.
Mnemonic: ABC
Do independent contractors fall under the ABC relationship?
No.
There is no vicarious liabity for an independent contractor because there is no power to supervise their performance, except for
- great ultra-hazardous activity and
- Estoppel
Scope of the principal/agent relationship
- Was conduct the kind that the agent was hired to perform?
- Did the tort occur on the job?
- Did agent intend to benefit the principal?
Frolic
A frolic is a new and independent journey outside the scope of relationship.
Detour
A detour is a mere departure from the assigned task but within the scope of the relationship.
Intentional Tort
Generally an intentional tort is outside the scope of vicarious liablity except:
1. When specifically authorized by principal
2. Falling naturally from type of employment
3. Motivated by desire to serve the principal.
ISSUE SPOT: Bouncer at a club that must physically detain someone and sued for battery.
Liability for Contracts
Principals are liable for contracts entered into any agent if princpal authorized agent to enter into the K.
What are the types of K authority?
- Actual Express
- Actual Implied
- Apparent
Discuss all three types of authority in agency essay.
Define
Actual Express Authority
Principal used words to grant express authority to agent.
Discuss all three types of authority in agency essay.
Actual Implied Authority
Authority which the agent reasonably believes the principal has given because of necessity in order to accmoplish assigned task.
Look for: custom or prior dealings
Discuss all three types of authority in agency essay.
Apparent Authority
Authority in which the principal “cloaked” the agent with the appearance of authority and 3rd party reasonably relied on appearance.
Discuss all three types of authority in agency essay.
Secret Limiting Instruction
If agent has actual authority but the princpal secretly limited the authoirty and agent goes beyond the scope, the principal still liable
Lingering Authority
The actual authority has terminated, but the agent continues to act on the principals behalf. The principal is till liable until customer receives notice of termination.
Agency Ratification
Authority granted after the K was entered if the principal has
1. knowlege of all material fact regarding the K and
2. Principal has accepted benefits.
Extent of principal liability
If there is no authority – the principal is not liable but the agent is liable.
If there is authority – the principal is liable, but the agent is not
What duties does an agent owe a principal?
Duty of Reasoanble Care
Duty to Obey Instructions
Duty of Loyalty
Remedies of breach:
1. Losses caused by breach & disgorged profits
General Partnership Formation
A partnership is an agreement between tow or more perople to carry on as co-owners in a for-profit business.
Use this rule at top of Partnership essay
What is the debt liability for partnerships?
An incoming partner is not liable for pre-existing debt
However, funds from incoming payments may be used to satisfy prior debts.
DIssociating partner does retain liablity for future debts until actual notice is given to creditors or 90 days after filing notice of disassociation with state.
Liability by Estoppel
A person who represents to a 3rd party that a general partnership exisits is liable as if one does exist.
Limited Partnership
A limited partnership is when there is one general partner and one limited partner.
The general partner is personally liable for all limited partner obligations (including torts & K’s).
Registered Limited Liability Partnership (LLP)
Required to register statement of qualification and annual reports.
There is no liablity for underlying obligations of a partner but is liablity for personal wrongdoing.
LLC
LLC members are owners with limited liablity for debts and obligations of business and benefits of personal taxation
