Business Associations

Question 1

Authority of Agent to Bind undisclosed Principal

Answer 1

the agent acts on behalf of undisclosed principal and agent is authorized to contract, agent is liable (and principal)

Question 2

Liability: Partially disclosed principal

Answer 2

agent is party to contract even if agent acted with actual or apparent authority. Partially disclosed principal is liable if agent acted with actual or apparent authority

Question 3

Apparent authority

Answer 3

Third party reasonably believes authority to act on beahalf of principal and belief is traceable to principals’ manifestations

Question 4

Partner liabilty for partnership obligations

Answer 4

partners in the general partnership are liable jointly and severally for all obligations of the partnership unless otherwise agreed

Question 5

Dissolution of partnership

Answer 5

partner can dissociate at any time by giving notice. Where dissociation is not wrongful, dissociating partner is not liable for damages. results in dissolution of partnership and requires winding up

Question 6

Partner’s acts after the dissolution

Answer 6

the partnership is bound by the partner’s act after dissolution if the act was appropriate to the winding up. If bound, joint and several

Question 7

Transferring partnership interest

Answer 7

may become partners only with the consent of all partners. transfer of partners interest is not a dissolution

Question 8

Business judgment/duty of care

Answer 8

duty of care includes a duty not to engage in intentional misconduct and knowing violations of law

Question 9

Duty of loyalty

Answer 9

Fiduciary duty of loyalty includes the obligation to refrain from appropriating partnership assets for personal use

Question 10

General partnership

Answer 10

2 or more people to carry on as co0owners a buisness for profit creates a general partnership, whether they intended to or not

*owning property together is not enough

Question 11

Agency

Answer 11

fiduciary relationship when one person (principal) manifests assent to another (agent) that agent shall act on principal’s behalf

Question 12

Actual Authority

Question 13

Undisclosed Principal Ratifying Agent’s unauthorized acts

Answer 13

ratification relates back as if it were authorized at the time of transaction. Does not relieve the agent of the undisclosed principal who ratifies unauthorized transactions. undisclosed principal’s ratification does not eliminate the agent’s liability to the third party on the transaction

or: ratification occurs if principals conduct justifies a reasonable assumption that the principal consents to the act performed on the principal’s behalf

Question 14

Respondeat Superior

Answer 14

Employers are liable for actions of an employee when employee is acting within the scope of his employment

Question 15

Scope of employment

Answer 15

employee acts within the scope of employment when performing work assigned by employer or engaging in a course of conduct subject to the employer’s control.

employees act is not within the scope of employment when it occurs within an independent course of conduct not intended to serve the master

Question 16

Is the person an employee?

Answer 16

whether the person’s physical conduct in the performance of the services is subject to the employer’s control or right to control

factors: level of skill, who supplies tools, duration of the relationship, whether the work is part of the principal’s regular business