Business Law Tst 4 Flashcards
Agency relationship
Association between one party and agent who acts on behalf of that party
Expressed Agency
Agency created in a written or oral agreement
Implied Agency
Not written but implied through conduct of the parties
How to tell difference between implied and express agency?
See how 3rd party views it
Ratification
Acknowledge the action of agent by principle. Must take all actions can’t pick and chose
Express authority
Directly told to take action.
Told to sell house
Implied authority
Because you have the right to do specific actions (sell house) you may have other authority too (like show house, contact home owners)
Disclosed Principal
3rd party aware dealing with agent. Knows who principal is. Agent not liable principle liable contractually.
Partially Disclosed Principal
3rd party think he’s dealing with agent. Doesn’t know who principal is. Agent maybe liable and principal is liable contractually.
Undisclosed Principal
3rd party is unaware they are dealing with an agent. Both agent and principal are liable for contracts.
Types of principal tortious conduct
Respondeat superior= Latin for “let superior speak” principal held liable for harm done by agent
Negligent Hiring
Companies may also be held liable for intentional torts committed by agents
Principal duty to agent
Compensation
Indemnification= reimbursements for any thing lost by agent on principal behalf
Cooperation
Safe working conditions
Agents duties to principal
Loyalty Notification Performance Obedience Accounting
Termination of agency relationships
Lapse of time
Fulfillment of purpose
Occurrence of specific event
Some proprietorship
Just a dude doing business
Partnership
Voluntary association between 2 or more people
Types of partnerships
General- share unlimited personal liability of partnership debts
Limited Partnership- one general partner and one limited one who isn’t responsible for debts of business
Limited Liability Partnership- both partners only responsible to the extent of partnerships assets
LLC
Unincorporated business that is taxed like a partnership with members paying personal income taxes. And has limited liability of a corporation
Corporation
Legal entity formed by issuing stock to investors who are the owners of the corporation
How to form corporation?
File with Secretary of State office, stock holders are able to buy and sell stocks.
Who elects board of directors in a corporation? What do board of directors do?
Stock holders elect board of directors. Directors run business and make decisions, and hire officers to carry out Day to day tasks.
Duties of directors and officers
Duty of care
Loyalty
Disclose conflict of interest
Duties of shareholders
Not oppress minority share holders
Liability of directors and officers
Torts and crimes
Business Judgement Rule
