Essay 50 -- Point 1 Creation of agency relationship High Priority Flashcards
How should you start the essay?
By stating operative law.
Operative law in Agency law with an LLC?
Uniform limited liability company act of 2006
What happens to an LLC in transactions via agents under general principles of agency law?
1) They become bound in transactions
2) with third parties
3) Unger general Princ of agency law
What does a party’s being bound on transactions with third parties depend on?
1) The actual
2) or apparent authority
3) of its manager/managers.
Unless stated otherwise in an operating agreement, what is an LLC considered?
Member managed.
In a member managed LLC, what does each member have?
1) “Equal rights in management
2) and conduct
3) of companys activities
What does the equal rights in management and conduct of a company’s activities mean practically?
1) Each member of an LLC
2) has authority to bind the company
If an operating agreement is silent regarding member authority to hire agents for the LLC, what does that mean?
1) If it is member managed
2) LLC members have authority
3) to hire agents
4) to carry out ordinary business of LLC
When does an agency arise?
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
How does a person manifest assent/other wise consent to so act towards an agency agreement?
1) through written
2) or spoken words
3) or other conduct
What mutual understanding must be present for an principal/agent relationship to form?
1) Principal and agent
2) must understand
3) principal is in control of relationship
At a minimum, what does principal/agent must understand principal is in control of a relationship mean?
1) principal must have the right
2) to control
3) the goal of the relationship
What are two things that the existence of an agency relationship does not depend on?
1) Prin. compensating agent
OR
2) recognition of either party an agency is created
In essay 50, when did the agency relationship get formed?
1) when Ben orally requested (manifestation of assent) neighbor purchase hole digger for llc
2) Neighbor manifested consent by orally agreeing to purchase it
In essay 50, how was the agent subject to Principal’s control?
1) By agreeing to purchase the hole digger
2) from the local farm supply store
3) as requested
What instrument is not required to create an agency relationship for a purchase?
A written instrument.
In a principal agency relationship, when is a principal generally liable for a contract entered into by their agent?
When agent had
2) actual authority
3) to enter the contract
When does an agent act with actual authority?
When agent reasonably believes
2) in accordance with P’s manifestations to A
3) that principal wishes the agent so to act
What does creation of actual authority require?
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.
In essay 50, what act established reasonable belief by the agent that the principal wishes them to act?
Ben asked neighbor to purchased hole digger, and neighbor agreed.
In essay 50, what did neighbor rely on to create reasonable belief prin wished them to act?
1) knowing Ben had 1/2 interest in LLC
Who does apparent authority affect?
Third persons
How is apparent authority created?
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
How is apparent authority created in plain English?
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
What facts would implicated apparent authority in essay 50?
1) If either Adele or ben
2) manifested TO THE STORE
3) that neighbor had auth. to act for LLC
What is ANOTHER common English way to say apparent authority exists?
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
