Agency & Partnership Flashcards
Creation of agency relationship
- Capacity
- Consent
- Authority
Agent’s duties
Duty of loyalty
Duty of obedience
Duty of care
Principal’s duties
Duty to compensate and reimburse
Duty to cooperate
Duties under contract
Remedies to breach of duty for principal
Losses from and profits made by breaching A
Remedies for breach of duty to agent
Sue for breach of k
Possessory lien on any money principal owes
When will P be held liable for contract that A entered
When there is authority (actual, apparent, or ratified)
What is actual authority
Agent reasonably thinks she possesses based on P’s dealing
What is respondent superior
P held vicariously liable for acts of employee committed within scope of employment, minor deviation, or for benefit/authorized by P
How does one get actual authority
Express - agent expressly given authority
Implied - conduct, custom, past course of business, etc.
What is apparent authority
P held out A as having authority and based on the holding out, 3rd party reasonably relieved that agent had authority to act
What is ratification
Even if A didn’t have authority, P ratifies act by affirming or accepting the benefit, so long as P knew the material facts
3rd party v. principal?
3rd party v. agent?
p/a v. 3rd party?
p v. a
P: if A had authority, P is liable
A:
- no authority = A liable
- P not disclosed = A liable
- P partially disclosed = A liable
- else, A not liable
v. 3rd party: when P disclosed, only P may enforce; if not, P or A may hold liable
A bound to P for breach if acted beyond authority
Employer/employee relationship vs. contractor test
test: degree of control - did P have right to control manner and manner of work? if no, contractor
When will P be liable for its contractor’s torts
inherently dangerous activity
nondelegable duties have been delegated
p knowingly selected incompetent contractor
How is partnership formed
“A partnership is an association of two or more persons to carry on as co-owners of a business for profit whether or not the persons intended to form the partnership”
Requirements for partnership to be not void
capacity to enter into binding contract
no illegal purpose
new partners must have consent of all partners
How to rebut sharing profits presumption
show no management or show that profit is for debt, services rendered, etc.
Is a partner entitled to payment for services
Not unless agreement says otherwise
When does property belong to partnership? When is it presumed?
belongs if in partnership name or a partner and it notes that holding in capacity for the partnership
presumed if purchased with partnership funds
How do you decide partner property rights when it’s untitled?
Look to common law factors: used partnership funds, use of property by partnership, improvement with funds, listed as an asset, etc
What are partner’s rights in partnership property
Partners are not co-owners and have no transferable interest; can only use partnership property for benefit and scope of partnership
Rights of partners
Partners have equal rights to co-manage ordinary affairs
How does voting in a partnership work - how many votes needed for things?
Majority of votes for ordinary disagreement; extraordinary matters need unanimous votes
What are partnership duties
duty of loyalty
duty of care
duty to provide complete and accurate information
