BA - partnerships and agency

Question 1

agency

Answer 1

1. consent by both parties
2. control by the principal
3. action on behalf of principal by agent

Question 2

actual authority

Answer 2

express and implied - direct from P to A

Question 3

apparent authority

Answer 3

requires communication between 3P and principal (what 3P thinks A has the authority to do)

Question 4

types of principal

Answer 4

disclosed, partially disclosed, undisclosed

Question 5

liability of undisclosed principal

Answer 5

only bound to A’s actions when they are usual or necessary in the ordinary course of P/A transaction

Question 6

Principal ratification

Answer 6

first: 3P hasn’t withdrawn and the circumstances haven’t changed to make it unfair to bind 3P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

Question 7

A’s fid duty to P

Answer 7

loyalty, obedience, info disclosure, care

Question 8

P’s fid duty to A

Answer 8

indemnify and compensate

Question 9

general partnership (common law)

Answer 9

parties intend to proceed as partners. are principals and agents of the partnership.

Question 10

UPA general partnership

Answer 10

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)

Question 11

RUPA general partnership

Answer 11

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)

Question 12

Malsbenden GP element test

Answer 12

agreement to share profits
agreement to share losses
mutual right of control/management
community interest in venture

Question 13

GP rights and duties (CL)

Answer 13

ea partner has equal right in managing the partnership; any difference may be decided by the majority of the partners; joint and severally liability

Question 14

UPA GP rights and duties

Answer 14

(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

Question 15

RUPA GP rights and duties

Answer 15

joint and severally liability (one or more, can choose)

Question 16

UPA/RUPA GP authority to bind - actual

Answer 16

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

Question 17

UPA GP authority to bind - apparent

Answer 17

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

Question 18

RUPA GP authority to bind - apparent

Answer 18

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

Question 19

RULPA control rule

Answer 19

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