BA - partnerships and agency Flashcards
agency
- consent by both parties
- control by the principal
- action on behalf of principal by agent
actual authority
express and implied - direct from P to A
apparent authority
requires communication between 3P and principal (what 3P thinks A has the authority to do)
types of principal
disclosed, partially disclosed, undisclosed
liability of undisclosed principal
only bound to A’s actions when they are usual or necessary in the ordinary course of P/A transaction
Principal ratification
first: 3P hasn’t withdrawn and the circumstances haven’t changed to make it unfair to bind 3P
second: has P ratified: express manifestation or intention to authorize OR implied (Acts like will authorize)
third: ratification via acquiescence - P failed to object, which has authorized A to repeat in the future
A’s fid duty to P
loyalty, obedience, info disclosure, care
P’s fid duty to A
indemnify and compensate
general partnership (common law)
parties intend to proceed as partners. are principals and agents of the partnership.
UPA general partnership
an association of two or more persons to carry on as co-owners of a business for profit formed under 202 or state law. aggregate theory (group of people with personal liability)
RUPA general partnership
an association of two or more persons to carry on as co-owners a business for profit, whether or not the person intended to form a partnership. entity theory (separate legal identity)
Malsbenden GP element test
agreement to share profits
agreement to share losses
mutual right of control/management
community interest in venture
GP rights and duties (CL)
ea partner has equal right in managing the partnership; any difference may be decided by the majority of the partners; joint and severally liability
UPA GP rights and duties
(creditors must first exhaust partnership assets, then) joint liability (all or none can be sued)
equal rights in management
any disagreement will be decided via max
equal access to books/info
no new partners w/o consent of all partners
RUPA GP rights and duties
joint and severally liability (one or more, can choose)
UPA/RUPA GP authority to bind - actual
if requires vote, no actual authority to bind
has actual authority to commit to usual and customary matters unless partner has reason to know other partners might disagree or for some other reason knows its inappropriate
no actual authority to take unusual or non customary actions that will have substantial effect on partnership
UPA GP authority to bind - apparent
apparent authority when at time of transaction, it reasonably appeared to the person that the partner’s act was for the carrying on of business of the partnership and in the usual way (cannot be undisclosed partnership) (apparently/usual empowering rule)
no authority - not binding
RUPA GP authority to bind - apparent
binds pship for apparently carrying on in the ordinary course unless partner had no authority to act for the pship in that particular matter and the 3P know or had received notice that the partner lacked authority
if act not in usual or ordinary course of business, pship only bound if other partners authorized the act
wrongful acts too
RULPA control rule
if a limited partner participates in the control of the business of the LP and that conduct causes a 3P to reasonably believe that the LP is a GP, and with that belief the 3P transacts business with the LP, then the LP is liable to the 3P as if he was a GP
