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Agency/Partnerships Flashcards

1
Q

Agency

A
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2
Q

Tort Liability in Agency

What is the most important fact a ct consider in analyzing whether an agent is an employee vs. indep. contractor

M&M

A

Whther the P had right to control the manner and method of A’s work

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3
Q

Tort Liability in Agency

A principal is not liable for the acts of independent contractors unless:

3 Options

A

(1) inherently dangerous activities are involved; (2) nondelegable duties have been delegated; or (3) the principal knowingly selected an incompetent independent contractor.

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4
Q

Tort Liability in Agency

Frolic vs. detour

A

Frolic = substantial deviation from authorized time and space limits of employment

Detour = minor deviation from authoerized time and space limits of employment

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5
Q

Tort Liability in Agency

To determine whether an employee’s conduct was within the scope of their employment, cts will consider:
1) the __ of the work
2) Whether the conduct was ___ removed from the
authorized time and space limits of the employment and
3) whether the conduct was actuated, at least in part, by a ___ to serve the employer

Double S, P

A
  1. scope
  2. substantially
  3. purpose
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6
Q

Tort Liability in Agency

A principal is liable where an agent appears to deal or communicate on behalf of the principal and the agent’s apparent authority enables the agent to:

A

(1) commit a tort or (2) conceal its commission.

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7
Q

Partnerships

Partnership law can be governed by:

A

RUPA (Revised Uniform Partnership Act)

K rules

Agency Rules

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8
Q

Partnerships

T/F: A formal writing is required to from a partnership

A

False

the parties’ intent can be implied from their conduct

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9
Q

Partnerships

No one can become a partner w/o __ of all the partners

A

Consent

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10
Q

Partnerships

What might raise a presumption of partnership?

A

Sharing profits

exception—payments for: a debt, services rendered, rent, annuity or retirement benefits, interest on a loan, or sale of goodwill of a business)

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11
Q

Factors to Determine Whether Property Belongs to the Partnership

For real and personal titled property, apply R.U.P.A. Property belongs to partnership if it is titled in:

A

1) The partnership name, or
2) The name of the partnership and the instrument transferring title notes the titleholder’s capacity as partner or the existence of a partnership

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12
Q

Factors to Determine Whether Property Belongs to the Partnership

For real and personal titled property under R.U.P.A., prop is presumed partnership prop if

A

purchased with partnership funds

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13
Q

Factors to Determine Whether Property Belongs to the Partnership

For real and personal titled property under R.U.P.A., prop is presumes separate prop of partner if:

3 Reqs

A

(1) The property is held in name of partner(s)
2) The instrument transferring title does not indicate the person’s capacity as a partner or mention the existence of a partnership
3) Partnership funds were not used

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14
Q

Factors to Determine Whether Property Belongs to the Partnership

For untitled property, apply common law factors:

6 options

A

a. Used partnership funds
e. Improvement with partnership funds
f. Maintenance with partnership funds
b. Use of property by partnership
c. Listed in partnership books as an asset
d. Close relationship between property and the business

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15
Q

Partner’s Rights in Partnership Property

Partners are not co-owners of ____ and have no transferable interest of it

A

partnership property

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16
Q

Partner’s Rights in Partnership Property

Partners have no right to use partnership property other than for the benefit of the ____

A

partnership

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17
Q

Partnerships

All partners have an ____ to participate in the management and control of the partnership absent a partnership agreement providing otherwise

A

equal right

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18
Q

Partnerships

All partners have an equal right to share in the:

A

profits and losses and receive distributions

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19
Q

Partnerships

The partnership may sue or be sued in the partnership name or in the names of the:

A

individual partners

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20
Q

Partnerships

The partnership must ___ partners for payments reasonably made and obligations reasonably incurred by a partner in carrying on the business of the partnership

A

indemnify

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21
Q

Partnerships

If a partner must pay more than his fair share of the partnership’s debt, he is entitled to ____ from the other partners

A

contribution

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22
Q

Partnerships

Which partners have the right to inspect the partnership books and records?

A

All partners

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23
Q

Partnerships

A partner owes fiduciary duties to the partnership and all partners. What are the 2 main duties a parnter owes a partnership?

A
  1. loyalty
  2. care
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24
Q

Partnerships

Under the duty of loyalty, the partner:

GR

A

must not put his own interest ahead of the the interests of the partnership.

Specifically, the duty of loyalty requires that a partner not usurp a relevant partnership opportunity, not advance interests adverse to the partnership, and not engage in self-dealing transaction.

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25
# Partnership Duties To not usurp a relevant partnership opportunity requires that the partner offer any relevant opportunity to the ___ and only after the partnership declines, may the partner purse the opportunity himself. An opportunity is relevant if it: ____
partnership first falls within the partnership’s line of business or interest and expectancy
26
# Partnerships Under the duty of care, the partner must: | 2 requirements
1. refrain from engaging in negligent, reckless, or unlawful conduct 2. refrain from engaging in intentional misconduct
27
# Partnerships Under the duty of obdience, a partner must:
1. obey all reasonable directions of the partnership 2. refrain from acting outside the scope of the partner's actual authority | 2 requirments
28
# Partnerships Under the duty to provide complete and accurate information, partners must: | 1 req
1. provide complete and accurate information concerning the partnership
29
# Partnerships The act of any partner binds the partnership, unless the partner: | 2 Req
1. had no authority and 2. the third party knew or had notice that the partner lacked authority
30
# Partnerships Partners are liable on contracts made by a partner if: | 2 Req
1. in the scope of the partnership business and 2. on any other contracts expressly authorized by the partners
31
Delete
Delete
32
A partner is dissociated from a partnership upon:
a. Notice of the partner’s express will to withdraw b. The happening of an agreed upon event c. The valid expulsion of a partner d. The partner becoming bankrupt e. The death of an individual partner, or the termination of a partner that is a business entity, or f. A court decision that a partner is incapable of performing her duties
33
Who dissociates? Who dissolves?
Partner = dissociate Partnership = dissolve
34
In a partnership at will, when must business be wound up?
when a partner gives notice of her express will to withdraw ## Footnote This notice automatically triggers dissolution of the partnership unless all the partners - including the properly dissociating partner- agree within ninety days that the partnership should continue.
35
T/F: Dissociation or withdrawal of a partner does not necessarily cause a dissolution or termination of the partnership.
True ## Footnote Additionally, a lawful withdrawal terminates most of the partner's fiduciary duties to the partnership as well as his or her rights to participate in the management of the partnership, unless he participates in the winding up of the partnership
36
In a partnership for definite term, when must business be wound up?
1) If at least half the remaining partners express a will to wind up the business within 90 days after a partner’s death, bankruptcy, or wrongful dissociation, 2) When all the partners express a will to wind up the business, or 3) When the term expires or the undertaking is complete
37
Whare are the 3 other situtations where partnership business must be wound up?
1. upon the happening of an agreed upon event 2. upon the happening of an event tht makes it unlawful for the partnership to continue 3. upon a judicial decree
38
# Limited Partnership Limited partnerships are governed by the:
Uniform Limited Partnership Act (“U.L.P.A.”)
39
# Limited Partnership To form an LP you need:
1. one or more GP plus at least 1 LP 2. file a certificate of limited partnership w/ sec. of state
40
# Limited Partnership Partner has no rights to distributions absent a:
contribution ## Footnote may be in the form of any benefit to the partnership (e.g., money, property, services, and promises to make such contributions)
41
# Limited Partnership T/F: Limited partners have no personal liability for obligations of the partnership
True
42
# Limited Partnership T/F: General partners are jointly and severally liable for all partnership obligations
True ## Footnote General partners may also be limited partners but they still have all of the liabilities and duties of a general partner
43
# Limited Partnership General partners owe the limited partnership which duties? | 2
Fiducuary duties of care and loyalty
44
# Limited Partnership Limited partners owe the limited partnership which duties?
Limited partners owe no fiduciary duty to the partnership and are free to compete with the partnership, except as otherwise provided in the partnership agreement
45
# Limited Partnership Both general and limited partners have the right to _____ , which can be transferred, in whole or in part
distributions
46
# Limited Partnership Any partner may maintain a derivative action on behalf of the partnership if the partner:
first makes demand on the general partners
47
# Limited Partnership Any partner may apply for a ____ whenever it is not reasonably practicable to carry on the business in conformity with the partnership agreement
decree of dissolution
48
# Limited Partnership What are the 3 rights of GP?
1. equal rights in management 2. right to the partnership’s business information 3. right to indemnification for liabilities incurred in the ordinary course of the partnership’s activities | A general partner is not entitled to remuneration for services performed for the partnership
49
# Limited Partnership Do limited partners have the right to participate in management?
No unless provided by the partnership agreement
50
# Limited Partnership Limited partners have the right to inspect and copy:
Certain partnership records that are req. to be kept in the records office
51
# Limited Partnership T/F: A limited partner can dissociate before termination of the limited partnership
False
52
# Limited Partnership A limited partnership may be judicially and administratively dissolved; otherwise, a limited partnership may be dissolved only by the occurrence of one of the following: | 4 Events (H, C, D+C 90, 90 D LLP)
a. The happening of an agreed upon event b. The consent of all the partners holding a majority of the right to receive distribution (“majority in interest”) c. After dissociation of a general partner and the consent of the majority in interest, if no general partner remains, after 90 days unless a new partner is admitted, or d. 90 days after dissociation of the last limited partner, unless a new limited partner is admitted
53
# Limited Partnership Assets are distributed first to ____ and then to ___ as a distribution
creditors (including partners who are creditors) partners
54
# LLP Formation of an L.L.P. must be approved by:
whatever vote is necessary to amend the partnership agreement
55
# LLP To form an LLP, a statement of qualification must be filed with the sec. of st containing:
1. Name and address of partnership 2. Statement of election to be an L.L.P
56
# LLP A partner is **not **personally liable for the obligations of the partnership, however, a partner remains personally liable for:
her own wrongful acts
57
# LLP In a limited liability partnership, financial rights and obligations of partners, including profit/loss-sharing and indemnity, are identical to those of:
general partners in a general partnership
58
# LLP If partnership assets are insufficient to indemnify a partner for an L.L.P. obligation, each partner forfeits a right to____ in exchange for being relieved of the obligation to contribute to the personal liability of other partners
receive contributions
59
# LLC LLC are governed by the:
Revised Uniform Limited Liability Company Act of 2006 (“R.U.L.L.C.A.”)
60
# LLC Limited Liability Companies (“LLCs”) are taxed like partnerships, but members enjoy ____ , like shareholders in a corporation.
limited liability
61
# LLC The LLC is treated as:
an entity distinct from its members
62
# LLC An LLC is formed by:
filing a certificate of organization with the secretary of state
63
# LLC Each member of a member-managed LLC has authority to bind the company to contracts, unless:
the member lacks actual authority to do so and the other party knows they lack authority
64
# LLC Members in member-managed LLCs owe duties of care and loyalty to:
each other and the LLC
65
# LLC In manager-managed LLCs, only the managers are subject to the duties of:
Care and loyalty But, only the members may authorize or ratify an act by a manager that would otherwise violate the duty of loyalty
66
# LLC In manager-managed LLCs, only the members may:
authorize or ratify an act by a manager that would otherwise violate the duty of loyalty
67
# LLC Courts may ____ to reach personal assets of members in circumstances similar to those justifying piercing in a corporation
Pierce the LLC veil
68
# LLC In a ___ LLC, a ___ has a right to inspect and copy any record concerning the LLC’s business that is material to the ___ rights and duties
Member Managed Member Member | same in a manager-managed LLC
69
# LLC T/F: A member of an LLC has the right to dissociate at any time
True
70
# LLC A wrongfully dissociating member may be liable for:
damages
71
# LLC An LLC will dissolve when any of the following events occur: | 5 Events
1. An agreed upon event of dissolution 2. The consent of all the members 3. The passage of 90 consecutive days during which the LLC has no members 4. Judicial decree 5. Administrative dissolution by the secretary of state
72
How is a partnership formed? | Have to remember this
When 2 or more people associate to carry on a co-owners of a business for profit ## Footnote There are no specific formalites or writing required to form a partnership. All partners have an equal right to participate in the management and control of the partnership absent an agreement providing otherwise. Say all of this in GR
73
A partnership, Limited Partnerhip, and Limited Liability Partnership all have partners, but an LLC has:
Members
74
How is a partnership formed? | Have to remember this
When 2 or more people associate to carry on a co-owners of a business for profit
75
# Agency Apparent authority is created when:
The P holds another out as his A to a third party as having certain authority, causing TPs to reasonably believe the agent has such authortity
76
# Agency What are an agent's 4 duties?
1. loyalty 2. obdience 3. care 4. under K
77
# Agency Actual authority is created when:
The P and A agree to the agency relationship
78
# Agency Agency is a ___ btwn a principal + agent
Consensual relationshp
79
# Agency An agency is created by: | 4 Req.
1. the principal having contractual capacity (agent only need minimal capacity) 2. consent (both parties) 3. by action (actual/apparent/ratification) 4. by operation of law
80
# Agency Actual authority is created when:
The P and A agree to the agency relationship
81
# Agency Ratification occurs when:
The P agrees to be bound by previoulsy unauthorized acts
82
# Agency What are an agent's 4 duties?
1. loyalty 2. obdience 3. care 4. under K
83
# Creation of an Agency Relationship A ___ must have contractual capacity while an ___ does not
Principal Agent
84
The basic formalities of creating an agency relationship
1. capacity (principal must have full contractual capacity, ageny must have at least minial mental capacity) 2. consent (of both parties) 3. writing if required (by SOF) ## Footnote Consideration not required
85
The agent owes the principal the following duties:
1. loyalty 2. obdience to lawful instructions 3. reasonable care under the circumstances (duty to disclose relevant info)
86
# Duty of Loyalty An agent must refrain from dealing with their principal as an:
adverse party
87
# Duty of Loyalty An agent may not ___ w/ their P concerning subject matter of the agency
compete
88
# Duty of Loyalty An agent may not use the P's ___ for the agents own purposes or a 3rd parties purposes
property
89
# Remedies for Agent's Breach of Duties A principal's remedies against the agent include K actions, tort actions, actions for secret profits, equitable actions for accounting, imposition of a constructive trust, witholding of compensation for intentional torts or intentional breaches of fiduciary duty, and termination of agency
Just remeber this
90
# Remedies for Agent's Breach of Duties The P may recover the actual profits of properties held by the agent whether or not:
the agents profit caused the P any loss
91
A ___ is a person appointed by an agent to perform functions that the agent has consented to perform on behalf of the P
subagent
92
Employees of a single organization are presumed to be ___
coagents
93
# Liabilty of Agent An agent has aboslute liability to the P for breaches by a ___
subagent
94
Although a P does not owe fiduciary duties to an A, they do owe:
1. all duties imposed by their K 2. reasonable compensation 3. reimbursement for expenses
95
If an agency agreement is silent regarding compensation, the agent is entitled to:
reasonable compensation
96
An agents remedies for principals breach of duties include:
contractual remedies possessory lien
97
# Agency What are the 3 types of authority an agent can have?
1. actual 2. apparent 3. ratified
98
# Partnerships Withdrawal from a partnership at will is only wrongful if:
contrary to the express terms of the partnership agreement
99
# Partnerships Withdrawal from a partnership for a definite term will be wrongful if:
1. the partner withdraws prior to the fulfilment of the specific purpose or the expiration of the specific duration 2. the partner goes bankrupt 3. the partner is expelled by the court.
100
A lawful withdrawal terminates most of the partner's ___ to the partnership as well as his or her rights to participate in ____ unless he participates in the winding up of the partnership.
fiduciary duties the management of the partnership

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