Agency Partnerships Flashcards
What are the key requirements for an agency relationship?
- Consent by both the principal and the agent to act for the principal’s benefit. 2. The agent is subject to the principal’s control.
How can the authority to act for the principal terminate?
The principal can manifest a desire to discontinue the relationship.
What binds a principal on a contract entered into by an agent?
The principal is bound if the agent had authority to enter into the contract.
What are the two types of actual authority?
- Express authority. 2. Implied authority.
What is implied authority?
Implied authority is present when the principal’s conduct leads the agent to believe it has authority.
What can cause the termination of implied authority?
Termination can occur after a reasonable time, change in circumstances, death, or incapacity of the principal.
What are the elements of apparent authority?
- The person dealing with the agent must have a reasonable belief in the agent’s authority. 2. The belief must be generated by some act or neglect on the part of the principal.
What is ratification in agency law?
Ratification occurs when the principal affirms or accepts the benefit of the agent’s acts, knowing the material facts.
Under what circumstances is an agent liable in a contract?
The agent is liable if they had no actual or apparent authority or if the principal is undisclosed or partially disclosed.
What is vicarious liability?
Vicarious liability holds the principal liable for torts committed by the agent during the scope of their employment.
What are the conditions under which an employer is liable for an agent’s torts?
- Acting in the scope of employment. 2. Minor deviation from employment. 3. Intentional tort for the principal’s benefit or authorized by the principal.
What is indemnification in agency law?
Indemnification allows the principal to recover against the agent if the agent acts beyond their authority.
What are the duties an agent owes to the principal?
Duty of care and duty of loyalty.
What does the duty of loyalty entail?
Not engaging in self-dealing, not profiting without disclosure, and following instructions.
What is the definition of a general partnership?
The association of two or more persons to carry on as co-owners a business for profit, regardless of intent.
What presumption does profit sharing create in a partnership?
Profit sharing creates a presumption that a person is a partner.
What must partners do in a general partnership?
Partners are agents and co-managers of the partnership.
What is the liability structure of partners in a general partnership?
Partners are jointly and severally liable for partnership debts.
What are the fiduciary duties of partners?
Duty of loyalty, duty of care, and duty to account.
What is the process of dissolution in a partnership?
- Dissociation. 2. Winding up. 3. Termination.
What happens during the winding-up phase of a partnership?
Partnership assets are liquidated and creditors are paid.
What is a limited liability partnership (LLP)?
No partner is personally liable for the obligations of the partnership.
What is a limited partnership (LP)?
At least one general partner must be listed, with limited partners having limited liability.
In a partnership, what rights does a creditor have against a partner?
A creditor can obtain an interest in profits but not management or voting rights.
True or False: A partner is entitled to separate payment for services rendered.
False.
