Agency & Partnership

Question 1

Agency Relationship

Answer 1

When one person (the agent) acts on behalf of the principal, with authority, and P is bound by the conduct.

Question 2

Actual Authority - 2 Types

Answer 2

Express and Implied

Question 3

Actual Authority - Express

Answer 3

When the agent is expressly given authority to act on behalf of the principal

Question 4

Actual Authority - Implied

Answer 4

The principals conduct led the agent to reasonably believe it has authority to carry out the goals of the principal

Question 5

Apparent Authority

Answer 5

When the (1) principal’s conduct (2) leads a third party to reasonably believe that the Agent has authority to bind the principal.

Question 6

Vicarious Liability

Answer 6

A principal may be liable for the torts committed by the agent, if

(1) agent was acting within the scope of employment;

(2) agent made a MINOR deviation from the employment; or

(3) committed an intentional tort, but only if:

(a) authorized by P,
(b) for the P’s benefit; or
(c) arising naturally from the employment

Question 7

Partnership Formation

Answer 7

The association of 2+ persons to carry out a business for profit as co-owners. If the individuals are sharing profits, partnership formation will be presumed, absent contrary evidence (i.e., money was for something other than sharing profits).

• Intention to form business, not form partnership.
• No writing required
• KEY: sharing profits

Question 8

Partnership Liability

Answer 8

Once a partnership has been formed, the partners are jointly and severly liable for (1) all torts committed by partners within the course of business or (2) with the authority of the partnership.

• Partners are PERSONALLY liable