Agency & Partnership

Question 1

principal will be liable for torts committed by agent if

Answer 1

1. principal-agent relationship exists and

2. tort was committed within scope of the relationship

Question 2

requirements for principal-agent relationship

Answer 2

assent, benefit, and control

Question 3

assent

Answer 3

voluntary, informal agreement, principal must have capacity

Question 4

benefit

Answer 4

agent’s conduct must be for principal’s benefit

Question 5

control

Answer 5

principal has right to control agent by having supervisory power

Question 6

sub-agents

Answer 6

no vicarious liability unless assent, benefit, and control between principal and sub-agent

Question 7

A principal is liable for contracts entered into by agent if

Answer 7

principal authorized agent to enter into contract.

Question 8

actual express authority

Answer 8

principal used words to express authority to agent

Question 9

Equal Dignity Doctrine

Answer 9

if contract must be in writing, then express authority must be in writing

Question 10

durable power of attorney

Answer 10

written expression of authority with conspicuous survival language

Question 11

actual implied authority

Answer 11

authority which agent reasonably believes principal has given because of necessity in order to accomplish assigned task; custom; or prior dealings

Question 12

apparent authority

Answer 12

principal cloaked agent with appearance of authority and third party reasonably relies on appearance of authority

Question 13

ratificatioin

Answer 13

authority granted after contract entered if principal has knowledge of all material facts concerning contract and principal has accepted benefits; ratification must be complete as is, no alterations to terms

Question 14

general partnership

Answer 14

an association of two or more people carrying on as co-owners of business for profit

Question 15

An unidentified principal or an undisclosed principal results in liability for

Answer 15

both the principal and the agent to a third party.

Question 16

unidentified principal

Answer 16

one whose existence is known but whose identity is withheld

Question 17

undisclosed principal

Answer 17

neither identity nor existence is disclosed

Question 18

limited partnership

Answer 18

• one or more general partner and one or more limited partner
• requires filing a certificate of formation
• general partner(s) personally liable for all partnership obligations

Question 19

limited liability partnerships

Answer 19

• required to file statement of qualifications with state

- partners not personally liable for LLP obligations, but liable for personal wrongdoing

Question 20

LLC

Answer 20

• members are owners with limited liability for debts and obligations of business and benefits of personal taxation
• requires articles of organization and operating agreement
• members control, but articles can delegate to managers

Question 21

Absent an agreement, profits are shared _______ and losses are shared _______________.

Answer 21

equally; like profits