Agency & Partnership Mini Review

Question 1

AGENCY:

What three things do you need to remember for Principal’s liability for Agent’s torts?

Answer 1

1. Assent + Benefit + Control (+Scope)
2. No vicarious liability for independent contractors
3. Agents’ torts are generally outside the scope of liability

Question 2

AGENCY:

What five things do you need to remember for Principal’s liability for Agent’s contracts?

Answer 2

Authority types:

1. Actual express (oral except for land, revocable unless power of attourney)
2. Actual implied (necessity, custom, or prior acquiesance)
3. Apparent authority (Principal “cloaks” and 3rd party reasonably relies)
4. Ratification (Principal has knowledge and accepts benefits)

AND
5. Authorized agents are not liable unless Principal is undisclosed

Question 3

AGENCY:

What are the three duties Agent owes Principal?

Answer 3

1. Care
2. Obedience
3. Loyalty

Question 4

PARTNERSHIP:

What is a GP?

Answer 4

1. Definition: Association of two or more persons carrying on as co-owners of a business for profit
2. No formalities needed to create

Question 5

PARTNERSHIP:

What are the liabilities of partners to third parties?

Answer 5

1. General partners are liable for all partnership obligations
2. Estoppel –> Representing yourself as part of a partnership makes you liable as if you really were

Question 6

PARTNERSHIP:

What are the relations between partners in a partnership?

Answer 6

1. Fiduciaries to each other and the partnership
2. ONLY the share of profits is liquid, transferrable, personal property
3. Unless otherwise stated, four key rules: (1) Equal mgmt control; (2) No salary; (3) Equal profit sharing; (4) Loss sharing according to profit sharing scheme

Question 7

PARTNERSHIP:

What is the waterfall in partnership dissolution?

Answer 7

1. All outside creditors
2. All partner creditors
3. All capital contributions
4. All profits/losses, shared equally if no other agreement

Question 8

PARTNERSHIP:

What is the general rule for distribution upon dissolution?

Answer 8

Each partner must receive their loans and their capital, plus their share of profits and minus their share of losses

Question 9

PARTNERSHIP:

What are the alternative business forms? (And their owners)

Answer 9

1. LP: Limited Partnership (Limited Partners)
2. RLLP: Registered Limited Liability Partnership (Registered Limited Liability Partners)
3. LLC: Limited Liability Corporation (Members)