Agency & Partnership

Question 1

An agent is personally liable if she ____ her activity:

Answer 1

TOUTS
T – The agent commits TORTIOUS conduct, in which case the agent is personally liable for those
harmed
O – The agent acted OUTSIDE her authority, or she acted without any authority, giving
rise to a cause of action for breach of the implied-in-law warranty of authority
U – The agent acted on behalf of an unnamed or UNDISCLOSED principal
T – The agent served TWO principals without full disclosure to each principal and without obtaining
their informed consent
S – SELF-DEALING by the agent with the principal’s business opportunities

Question 2

____ can terminate an agency relationship:

Answer 2

A BID
A – An ACT of the agent or principal unilaterally terminating the agency contract
B – BANKRUPTCY of the principal
I – INCOMPETENCY of the principal, unless the principal has signed a “Durable
Power of Attorney”
D – DEATH

Question 3

She ____ profits, but she’s not a partner:

Answer 3

DRAWS
D – Payment of a DEBT
R – Payment of RENT
A – Payment of an ANNUITY to a partner’s SS 
W – WAGES
S – SALE of the good will of a business

Question 4

Every partner has ____

Answer 4

PMS:
P – The right to use partnership PROPERTY
M – The right to participate in MANAGEMENT of the partnership
S* – The right to SHARE in partnership profits and the return of capital contributed

Question 5

The court will dissolve a ____ partnership:

Answer 5

CUB
C – One partner can’t CARRY on her share of the work
U – One partner is of UNSOUND mind
B – One partner PERSISTENTLY breaches the partnership agreement

Question 6

An employer of an independent contract is liable if the work to be performed invokes ____

Answer 6

BIP:
B – It injures a BUSINESS INVITEE
I – It’s INHERENTLY dangerous; or
P – It endangers the PUBLIC WAY