Essay 50 -- Point 1 Creation of agency relationship High Priority

Question 1

How should you start the essay?

Answer 1

By stating operative law.

Question 2

Operative law in Agency law with an LLC?

Answer 2

Uniform limited liability company act of 2006

Question 3

What happens to an LLC in transactions via agents under general principles of agency law?

Answer 3

1) They become bound in transactions
2) with third parties
3) Unger general Princ of agency law

Question 4

What does a party’s being bound on transactions with third parties depend on?

Answer 4

1) The actual
2) or apparent authority
3) of its manager/managers.

Question 5

Unless stated otherwise in an operating agreement, what is an LLC considered?

Answer 5

Member managed.

Question 6

In a member managed LLC, what does each member have?

Answer 6

1) “Equal rights in management
2) and conduct
3) of companys activities

Question 7

What does the equal rights in management and conduct of a company’s activities mean practically?

Answer 7

1) Each member of an LLC
2) has authority to bind the company

Question 8

If an operating agreement is silent regarding member authority to hire agents for the LLC, what does that mean?

Answer 8

1) If it is member managed
2) LLC members have authority
3) to hire agents
4) to carry out ordinary business of LLC

Question 9

When does an agency arise?

Answer 9

1) when one person (“principal”)
2) manifests assent
3) to another person (“an agent”)
4) that the agent shall act
5) on principal’s behalf
6) and subject to principal’s control
7) and agent manifests assent/otherwise consents to so act

Question 10

How does a person manifest assent/other wise consent to so act towards an agency agreement?

Answer 10

1) through written
2) or spoken words
3) or other conduct

Question 11

What mutual understanding must be present for an principal/agent relationship to form?

Answer 11

1) Principal and agent
2) must understand
3) principal is in control of relationship

Question 12

At a minimum, what does principal/agent must understand principal is in control of a relationship mean?

Answer 12

1) principal must have the right
2) to control
3) the goal of the relationship

Question 13

What are two things that the existence of an agency relationship does not depend on?

Answer 13

1) Prin. compensating agent

OR
2) recognition of either party an agency is created

Question 14

In essay 50, when did the agency relationship get formed?

Answer 14

1) when Ben orally requested (manifestation of assent) neighbor purchase hole digger for llc
2) Neighbor manifested consent by orally agreeing to purchase it

Question 15

In essay 50, how was the agent subject to Principal’s control?

Answer 15

1) By agreeing to purchase the hole digger
2) from the local farm supply store
3) as requested

Question 16

What instrument is not required to create an agency relationship for a purchase?

Answer 16

A written instrument.

Question 17

In a principal agency relationship, when is a principal generally liable for a contract entered into by their agent?

Answer 17

When agent had
2) actual authority
3) to enter the contract

Question 18

When does an agent act with actual authority?

Answer 18

When agent reasonably believes
2) in accordance with P’s manifestations to A
3) that principal wishes the agent so to act

Question 19

What does creation of actual authority require?

Answer 19

1) an objective manifestation by Prin.
2) Followed by
3) agent’s reasonable interpretation of that manifestation
4) which leads agent to believe they are authorized to act for P.

Question 20

In essay 50, what act established reasonable belief by the agent that the principal wishes them to act?

Answer 20

Ben asked neighbor to purchased hole digger, and neighbor agreed.

Question 21

In essay 50, what did neighbor rely on to create reasonable belief prin wished them to act?

Answer 21

1) knowing Ben had 1/2 interest in LLC

Question 22

Who does apparent authority affect?

Answer 22

Third persons

Question 23

How is apparent authority created?

Answer 23

1) “by written,
2) “or spoken words,
3) “or any other conduct
4) P causes 3P
5) to believe P consents to have act done on his behalf
6) by person purporting to act for him

Question 24

How is apparent authority created in plain English?

Answer 24

1) by a person’s manifestation
2) that another has authority to act with legal consequences for the person who makes the manifeststion
3) when a third party reasonably believes the actor
4) to be authorized
5) AND the belief is traceable to the manifesatation

Question 25

What facts would implicated apparent authority in essay 50?

Answer 25

1) If either Adele or ben
2) manifested TO THE STORE
3) that neighbor had auth. to act for LLC

Question 26

What is ANOTHER common English way to say apparent authority exists?

Answer 26

1) it exists when the principal makes a manifestation
2) to a third party
3) that causes third person to reasonably believe
4) apparent agent is authorized to act for Prin