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Flemings-Agency and Partnership > Definitions-Agency and Partnership > Flashcards

Definitions-Agency and Partnership Flashcards

1
Q

Agency-Three Elements

A
  1. Consent
  2. On behalf of
  3. Control
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2
Q

Three types of Agency

A
  1. Actual
  2. Apparent
  3. Inherent
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3
Q

Actual Agency Relationship

A

Exists when there has been express or implied consent by the principal and agent that agent will act on behalf of principal and under principal’s control.

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4
Q

Apparent Agency Relationship

A

Exists when a principal has allowed a third party to reasonably believe that a non-agent has actual agency authority.

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5
Q

Inherent Agency Power

A

A term used to indicate the power of an agent which is derived not from authority, apparent authority or estoppel, but solely from the agency relation and exists for the protection of persons harmed by or dealing with a servant or other agent.

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6
Q

Equal Dignity Rule

A

When the Statute of Frauds would apply to a contract executed by an agent:
1. The agent’s authority to bind the principal must also be in writing or the principal is not liable.

Exceptions: Corporate officers or General partners

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7
Q

Ratification

A

Occurs whenever a principal elects to validate an agent’s previously unauthorized act done on the principal’s behalf. The result is that the act will be treated as if it had been authorized originally. It will relate back in time to the original act.

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8
Q

Six Types of Agency Relationships

A
  1. General Agent
  2. Special Agent
  3. Co-Agent
  4. Dual Agent
  5. Subagent
  6. Agent’s Agent
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9
Q

General Agent

A

Conducts a continuous series of transactions for the principal and the principal is bound by all the usual and customary transactions of the agent.

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10
Q

Special Agent

A

Conducts either a single transaction or small series of transactions for the principal and teh principal is only bound for the acts that are necessary to accomplish the specific agency purpose.

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11
Q

Co-Agent

A

A principal may delegate as many agents as he wishes and each agent is a co-agent with the other. The co-agents are no responsible for the acts of the other co-agents.

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12
Q

Dual Agent

A

An agent who represents two or more principals that are dealing at arm’s length. This creates a conflict of interest but is acceptable as long as:

  1. The agent provides full disclosure of material fact and;
  2. There is informed consent, usually in writing.
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13
Q

Sub-Agent

A

Appointed by the agent with the authorization of the principal.

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14
Q

Agent’s Agent

A

An agent appointed by an agent to perform functions for the agent and not for the benefit of the principal. The principal is never responsible for the agent’s agent.

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15
Q

Two Types of Actual Authority

A
  1. Express
  2. Implied

Both can occur in the same fact pattern and if that occurs, I need to discuss both.

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16
Q

Apparent Authority

A

Results from the appearance of actual authority in the agent created by some word or act on the part of the principal toward a third party.

An undisclosed principal can never create apparent authority.

17
Q

Inherent Authority

A

Imposes liability on someone who put a potential “agent” in position to harm third parties, even though the “agent” does not have actual or apparent authority.

18
Q

Disclosed Principal

A

The principal is disclosed to the third party relieving the agent from all liability.

19
Q

Partially Disclosed Principal

A

The third party is aware that the agent is acting as an agent but whom does not know the identity of the principal. Both the agent and principal can be bound by the agents’s actions.

20
Q

Undisclosed Principal

A

The third party is unaware that the agent is acting on behalf of a principal. If the agent has actual authority, both the principal and agent can be bound by the agent’s actions.

21
Q

Respondeat Superior

A

An employer is responsible for the torts committed by an employee during the course and scope of his employment.

22
Q

Seven Duties of an Agent to Principal

A
  1. Duty of Obedience
  2. Duty to Avoid Conflicts of Interest
  3. Duty to Not Take Secret Profits
  4. Duty of Confidentiality
  5. Duty of Full Disclosure and Notification
  6. Duty to Account
  7. Duty not to Commingle Property.
23
Q

Duty of Due Care

A

Every agent is required to act with due care and to execute the agency duties with the skill and diligence of a reasonable, prudent person.

24
Q

Remedies Available to Principal if Agent Violates their Fiduciary Duty

A
  1. Damages: Punitive damages may be available where breach was extremely serious and willful.
  2. Equitable accounting: Agent must fully account for all of the principal’s assets, expenses and profits during the term of the agency.
  3. Restitution: Disgorgment of profits wrongfully obtained.
  4. Constructive Trust
  5. Equitable Lien
25
Q

Four Duties of Principal to Agent

A
  1. Duty to Indemnify/Reimburse
  2. Duty to Compensate
  3. Duty to Protect
  4. Duty to Cooperate
26
Q

Remedies Available to Agent if Principal Violates their Fiduciary Duty

A
  1. Agent may Sue Principal for Breach of Contract.
  2. Agent may Withhold Further Performance
  3. Agent may place Agent’s Lien on Principal’s Assets
27
Q

Termination of Agency

A
  1. By Acts of the Parties or;
  2. Operation of Law

Equal Dignities Rule: If original grant was in writing, the revocation must be in writing.

28
Q

Aggregate Theory v. Entity Theory of Partnership

A
  1. Aggregate Theory
    • Under UPA (Uniform Partnership ACT), a partnership is the sum total of partners as individual that make up the business–the individuals are the entity.
  2. Entity Theory
    • Under RUPA (Revised Uniform Partnership Act), a partnership is treated as an entity separate from its partners, they may sue or be sued in its own name.
29
Q

Partnership

A

An association of two or more persons to carry on as co-owners a business for profit. All partners are agents of the partnership.

30
Q

Five Elements to Creating a Partnership

A

Aliens Took Captain Big Pants

  1. Association
  2. Two or more persons
  3. Co-Owners
  4. Business
  5. Profit
31
Q

Five Duties of Partners

A
  1. Duty of Loyalty
  2. Duty to not take secret profits
  3. Duty of full disclosure and notification
  4. Duty to Account
  5. Duty not to commingle property
32
Q

Formation of Limited Partnership

A
  1. Must file certificate with Secretary of State
  2. Must include name of LP
  3. Must include name, address of all general partners.
  4. Normally must be signed by all partners.
  5. Substantial compliance is acceptable
33
Q

Limited Liability Partnership

A

A specific type of general partnership, created by state statute, to limit the personal liability of innocent general partners for partnership tort and/or contract liability.

34
Q

Narrow Statute v. Broad Statute with regards to LLPs

A
  1. Narrow Statute: Shields innocent partners from the personal liability for the professional negligence or malpractice of other partners from tort liability.
  2. Broad Statute: Shields innocent partners from personal liability for any type of claim.
35
Q

Three Elements of Forming a Limited Liability Partnership

A
  1. File a Registration Statement
  2. Must have a minimum amount of malpractice insurance.
  3. Must maintain a fixed amount of partnership assets at all times.

Flemings-Agency and Partnership (11 decks)

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