MEE_Agency & Partnerships

Question 1

Agency Relationsip

Answer 1

P (principal) manifests intent that A (agent) act on his behalf & both parties consent

Question 2

Actual Authority

Answer 2

authority A reasonably thinks he possesses based on P’s dealings with him (can be express or implied from actions of P)

(Agent’s belief)

Question 3

Apparent Authority

Answer 3

P “holds out” A as having certain authority, causing third parties to reasonably believe A has such authority

(third party belief)

Question 4

Partnership

Answer 4

two or more people associated to carry on as co-owners a business for profit

partner presumed if receives share of profits

Question 5

Partnership

Answer 5

two or more people associated to carry on as co-owners a business for profit

partner presumed if person receives share of profits

Question 6

When will K be binding on a Partnership?

Answer 6

P acts in ordinary course of business or business of kind carried on by p’ship, act will bind p’ship unless P had no actual authority and third party knew of P lack of authority

Transactions outside ordinary course of business require unanimous consent of P

when P enters into K w/o authority, P’ship is not bound

Question 7

Personal liability of Partners on K

Answer 7

each P is jointly and severally liable for p’ship obligations = personally liable for full amount

when P enters K w/o authority, P’ship is not bound by K

Question 8

Independent Contractor or Employee?

Answer 8

primary factor in determining whether individual is an Employee or IC is whether Principal has a right to control the method and manner of individual’s work

Question 9

Factors supporting Independent Contractor - Doctor

Answer 9

Doctors are highly skilled professionals
Maintain own practices
Responsible for manner in which provide medical care
Must provide own malpractice insurance
Bill independently for services
K provides docs are IC

Question 10

Factors suggesting Employer-Employee - Doctor

Answer 10

use of facilities and equipment provided by
provide continuous service on behalf of
may not work in other hospitals
work reviewed by board
limitations on purchasing equipment & supplies

Question 11

P’s liability for IC - Estoppel

Answer 11

Ordinarily, P is not liable for IC’s torts

However, Estoppel can be raised when P creates appearance that employer-employee relationship exists and third party relies on that relationship.

P can be held liable via respondeat superior

Question 12

Dissociation of Partner

Answer 12

Partner is dissociated from P’ship upon notice of express will to withdraw as a partner

Dissociation is caused by parter ceasing to be associated w/ carry o of business

Question 13

Dissolving of Partnership

Answer 13

A partnership at will is dissolved & its business must be wound up when a partner notifies P’
Ship of his intent to withdraw

Question 14

Post dissolution K - P’ship liability

Answer 14

P’ship will be bound by P’s postdissolution act if the act was appropriate for winding up the business

P’ship will be bound by P’s postdissolution act even if it was not appropriate for winding up the business
IF third party did not have notice of dissolution

Question 15

Partnership obligations

Answer 15

Each P is jointly & severally liable for P’ship obligations

where one P pays entire amount of p’ship debt, she may require other P to contribute pro rata share

Profits split equally, absent agreement - losses split same ration as profits

Question 16

Judgment creditor - liability of P’ship & P

Answer 16

Judgement will not personally bind a partner who has not been served

Judgment creditor must first seek satisfaction of judgment from P’ship, and then from P personally to extent not covered by P’ship assets

Partners are jointly & severally liable for all obligations of P’ship

Question 17

Types of Entities

Answer 17

GP - general
LP - limited
LLC
Corp

Question 18

Limited Partnership formation

Answer 18

LP comprised of at least one GP & one LP

Certificate of LP must be filed w/ Sec of State and Signed by all GP

Question 19

General Partnership formation

Answer 19

P’ship is formed as soon as two or more people associate to carry on as co-owners a business for profit

Question 20

Inherent Authority (Inherent Agency Power)

Answer 20

results in P being bound even though A had no actual or apparent authority

public policy - courts want to protect innocent third parties

(remember Respondeat Superior)

Question 21

Respondeat Superior

Answer 21

P held liable for torts of employees committed w/in scope of employment

Question 22

Ratification

Answer 22

A acts on behalf of P w/o authority, but P subsequently validates the act and becomes bound

P must know all material facts, accept the entire transaction and have capacity (competent and legal age)

Question 23

Tort Liability - Vicarious Liability of P - IC

Answer 23

P liable for torts of IC if”
inherently dangerous,
duty nondelegable or
knowing selected incompetent IC

General rule - P not liable for torts of IC

Question 24

Limited Partnership - P liability

Answer 24

under RUPA, LP are NOT personally responsible for LLP obligations;
GP is personally responsible

LP owes no fiduciary duty to P’ship - can compete unless agmt says otherwise
LP has no statutory right to participate in managment or control of p’ship

Question 25

Dissolution of Limited Partnership

Answer 25

LP has no right to dissociate before termination of LP

Consent of all GP ad LP holding majority interest
GP must dissociate

Question 26

Limited Liability Company (LLC) benefits & formation

Answer 26

taxed like a partnership
offers its members shares
can be run like a corp or p’ship

must have at least one member

certificate of formation w/ sec of state
management presumed by all members

members and managers are NOT personally liable for LLC obligations

Question 27

Dissociation & Dissolution of LLC

Answer 27

member can dissociate at any time

Dissolution - event or circumstance, consent of all members, passage of 90 consecutive days during which LLC has no members