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MEE > Agency & Partnership > Flashcards

Agency & Partnership Flashcards

1
Q

Creation of agency relationship

A
  1. Capacity
  2. Consent
  3. Authority
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2
Q

Agent’s duties

A

Duty of loyalty
Duty of obedience
Duty of care

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3
Q

Principal’s duties

A

Duty to compensate and reimburse
Duty to cooperate
Duties under contract

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4
Q

Remedies to breach of duty for principal

A

Losses from and profits made by breaching A

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5
Q

Remedies for breach of duty to agent

A

Sue for breach of k

Possessory lien on any money principal owes

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6
Q

When will P be held liable for contract that A entered

A

When there is authority (actual, apparent, or ratified)

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7
Q

What is actual authority

A

Agent reasonably thinks she possesses based on P’s dealing

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8
Q

What is respondent superior

A

P held vicariously liable for acts of employee committed within scope of employment, minor deviation, or for benefit/authorized by P

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9
Q

How does one get actual authority

A

Express - agent expressly given authority

Implied - conduct, custom, past course of business, etc.

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10
Q

What is apparent authority

A

P held out A as having authority and based on the holding out, 3rd party reasonably relieved that agent had authority to act

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11
Q

What is ratification

A

Even if A didn’t have authority, P ratifies act by affirming or accepting the benefit, so long as P knew the material facts

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12
Q

3rd party v. principal?
3rd party v. agent?
p/a v. 3rd party?
p v. a

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

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13
Q

Employer/employee relationship vs. contractor test

A

test: degree of control - did P have right to control manner and manner of work? if no, contractor

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14
Q

When will P be liable for its contractor’s torts

A

inherently dangerous activity

nondelegable duties have been delegated

p knowingly selected incompetent contractor

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15
Q

How is partnership formed

A

“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”

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16
Q

Requirements for partnership to be not void

A

capacity to enter into binding contract

no illegal purpose

new partners must have consent of all partners

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17
Q

How to rebut sharing profits presumption

A

show no management or show that profit is for debt, services rendered, etc.

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18
Q

Is a partner entitled to payment for services

A

Not unless agreement says otherwise

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19
Q

When does property belong to partnership? When is it presumed?

A

belongs if in partnership name or a partner and it notes that holding in capacity for the partnership

presumed if purchased with partnership funds

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20
Q

How do you decide partner property rights when it’s untitled?

A

Look to common law factors: used partnership funds, use of property by partnership, improvement with funds, listed as an asset, etc

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21
Q

What are partner’s rights in partnership property

A

Partners are not co-owners and have no transferable interest; can only use partnership property for benefit and scope of partnership

22
Q

Rights of partners

A

Partners have equal rights to co-manage ordinary affairs

23
Q

How does voting in a partnership work - how many votes needed for things?

A

Majority of votes for ordinary disagreement; extraordinary matters need unanimous votes

24
Q

What are partnership duties

A

duty of loyalty
duty of care
duty to provide complete and accurate information

25
Q

When does dissociation happen

A
  • voluntary notice to withdraw
  • happening of agreed event
  • explosion of partner
  • partner bankrupt
  • death of partner
  • court decision
26
Q

When does dissolution happen

A
  • when partner gives notice to withdraw (whenever if at will)
  • if definite term, when term expires, all partners express will to wind up, or if 90 days after dissociation, at least 1/2 partners want to wind up
  • happening of agreed event
  • judicial decree
27
Q

What is a limited partnership

A

when there is one or more general partners plus at least one limited partner

28
Q

What is needed to make a limited partnership

A

file a certificate of LP with secretary of state

29
Q

When does a limited partner have a right to distribution

A

when he contributes (may be in form of any benefit)

30
Q

What is the liability of a limited partner? the general partner?

A

limited partner have no personal liability; only liable for their investment

general partner joint and several liablility

31
Q

Duties of limited liability partners

A

general partners owe fiduciary duties of care and loyalty

limited partners owe no fiduciary duties

32
Q

Do partners have right of derivative action in LP?

A

yes

33
Q

Do LPs have right to dissolution?

A

yes
- no longer practicable
- admin
- specified event
-consent of all general partners and limited parties w majority right to distribution
-dissociation of general partner
-90 days after dissociation of last limited partner

34
Q

Rights of general partners in lp

A

each gp has equal rights of management, information, indemnification

no renumeration

35
Q

Rights of limited partners

A

no right to participate in management except as provided by partnership agreement
right to inspect and copy certain records

36
Q

Can a limited partner dissociate before termination of the lp?

A

no

37
Q

What is a limited liability partnership

A

limits liabilities for all types of partner

38
Q

How is llp formed

A

filed with secretary of state, name and address of partnership, statement of election to be an llp

39
Q

What happens if partnership assets are insufficient to indemnify a partner for an llp obligation

A

each partner forgets right to receive contributions in exchange for being relieved of the obligation

40
Q

What is llc

A

taxed like partnership, members enjoy limited liability, entity distinct from members

41
Q

How is llc formed

A

filing certificate of organization with secretary of state

42
Q

How are llcs managed

A

all members participate in management unless manager membered llc

43
Q

Duties in llc

A

member-managed
- duty of care and loyalty to each other and llc
- good faith and fair dealing

manager-managed
- only managers have fiduciary duties

44
Q

Can courts pierce the veil in an llc?

A

yes

45
Q

How are distributions distributed in llc?

A

equal shares unless operating agreement provides otherwise; most states hold basis of contribution

46
Q

Rights of information in llc

A

member-managed - member can inspect and copy material to member’s rights and duties
manager-managed, only managers have

47
Q

What are llc dissociation rules

A
  • member can dissociate any time
  • wrongful dissociation may be liable for damages
  • partnership dissociation rules apply
48
Q

When does llc dissolve

A
  • agreed upon event
  • consent of all members
  • 90 days where llc has no members
  • judicial decree
  • admin dissolution
49
Q

Does P have a right to indemnification from A

A

Yes, if agent acts beyond authority

50
Q

How does general partnership liability work

A

Jointly and severally liable for the partnership debts, acts, contracts and torts

51
Q

What are the steps/markets to end a partnership

A
  1. Dissolution
  2. Winding up
  3. Termination (true end)

MEE (7 decks)

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