Agency & Partnerships Flashcards
formation of agency relationship
Assent
Benefit to principal
Control of agent by principal
scope of employment
agent performing assigned tasks or agent engaged in conduct within the principal’s control; agent was acting to benefit principal
intentional torts in scope of employment
- if within space and time of work (“on the job”)
- done for principal’s benefit
- the kind of act agent was hired to perform
test for IC vs. employee
whether the employer controls the physical conduct of work
factors of an IC
- work independently
- can work for others
- use their own tools
- paid on a fixed rate
exceptions to nonliability for IC’s acts
- nondelegable duty (inherently dangerous)
- principal retains control
- IC has apparent authority
- negligent hiring of IC
principal’s direct liability
- for contracts for which agent had actual authority or that principal ratified
- inherently dangerous (nondelegable) duties
- negligent hiring or training
formation of partnership
intent to carry on a for-profit business as co-owners
presumed intent to form partnership
if profits are shared UNLESS debt, wages, rents, interest, goodwill, or benefits
unchangeable default rules in partnership
- fiduciary duties
- partner’s right to access books
- liability to third parties
Limited Liability Partnership (LLP)
filed with state; all partners become limited partners, not personally liable
Limited Partnership (LP)
file certification with state; at least one general partner and other limited partners
purported partner
non-partner may still be personally liable if there’s a representation that the person is a partner, the person makes or consents to it, and a third party detrimentally relies on it
partnership’s liability
liable for contracts that partners are authorized to enter into; liable for partners’ tortious acts in the scope of employment
partners’ liability
liable for their own tortious acts; absent any limited form, jointly and severally personally liable for partnerships’ obligations; NOT liable for things before became a partner
agent’s duty of care
duty to exercise the competence, care, and diligence normally exercised by someone in similar circumstances, based on local community standards; if special skills, expected to use them
partner’s duty of care
to refrain from engaging in grossly negligent or reckless conduct, intentional misconduct, or knowing violations of the law
duty of loyalty
duty not to usurp an opportunity, not to advance interests adverse, not to take in secret profits, and not to compete with partnership
principal’s duty
to deal fairly and in good faith
how to add new partner
by consent of all existing partners; transfer of partnership interest does not make transferee a partner
partner’s dissociation
right to dissociate for any reason; must give notice to other partners
effect of partner’s dissociation
at will: the partnership is dissolved UNLESS all partners waive the right to terminate the partnership
for term or undertaking: partnership continues until term or undertaking is complete
if partner dissociates and partnership doesn’t dissolve
partner is entitled to buyout of her share
wrongful dissociation
unlimited partnership: any breach in partnership agreement
partnership for set term or undertaking: judicial expulsion, bankruptcy, or willful termination
rights and duties after dissociation
duty not to compete is gone upon dissociation; if involved in winding up, still have the other duties of care and loyalty
duties of person winding up
- dispose of partnership property
- discharge partnership liabilities
- preserve the business to maximize value
- distribute assets to partners
