Micro

Question 1

Agency & how it’s created

Answer 1

A principal-agent relationship exists if there is Assent (voluntary, consensual agreement bw principal and agent with legal capacity), a benefit (agent’s conduct benefits objectives of the principal) and control (principal must have the right to supervise themanner the job is performed).

Question 2

Termination of agency

Answer 2

1) By agreement,
2) operation of law, (death/incapacity)
3) Bankruptcy,
4) Change in circumstances,
5) Breach of duty

Question 3

Duties of principal to agent

Answer 3

1) Compensation
2) Cooperation
3) Indemnity/Contribution,
4) Express contractual duties

Question 4

Duties of agent to principal

Answer 4

(1) Reasonable care,
(2) obey reasonable instructions,
(3) Duty of Loyalty, (no self-dealing, usurping opportunities or secret profits)
(4) Express contractual duties

Question 5

Actual Authority

Answer 5

i. Express – explicitly told to act (oral or written)
ii. Implied – given through conduct or circumstance.

Question 6

Apparent Authority

Answer 6

i. Principal holds out the Agent as possessing authority.
ii. 3P reasonably relies on the agent’s appearance of authority.

Question 7

Ratification

Answer 7

Principal knew of the material facts at the time of the alleged acceptance AND accepted benefits. Cannot alter terms

Question 8

Agent Liability to 3P

Answer 8

Generally, A not liable to 3P unless:
i. Non-disclosure or partial disclosure of principal to 3P (3P can sue A and/or principal)
iii. Agent lacked authority altogether (only Agent is liable)

Question 9

Principal Liability to 3P

Answer 9

Principal is liable for Ks entered into by Agent if Agent was authorized to contract on Principal’s behalf of Principal.

Question 10

Principal’s liability for agent torts
(Respondeat superior)

Answer 10

Principal is liable for torts committed by Employee if the tort is within the scope of the employment/relationship.

Question 11

Principal’s liability for independent contractor torts

Answer 11

Principal is not vicariously liable for torts of an independent contractor UNLESS:
(1) non-delegable duty (public policy) or
(2) inherently dangerous.

Question 12

Principal liability to 3P for intentional torts

Answer 12

Principal is not liable for the intentional torts of their employees/agents unless they are:
a. natural consequence from the nature of the job;
b. Motivated to serve the principal/employer; OR
c. Authorized by the employer/Principal.

Question 13

Partnership

Answer 13

An association of 2+ persons carrying on as co-owners of a business for profit.

Question 14

Partnership formation

Answer 14

No formalities required to create – Courts look at parties’ intent to determine existence.

Where intent is unexpressed, courts look at:
(1) title to property;
(2) designation of entity by parties;
(3) amount of activity involved;
(4) sharing of gross returns/profits

Question 15

Partnership duties

Answer 15

Partners in a general partnership owe fiduciary duties of care & loyalty, and a statutory duty of disclosure.

Question 16

Liability of Partnership to 3P

Answer 16

A partnership is liable for:
1) debts incurred in the furtherance of partnership and
2) torts committed within the scope of the partnership.

But, partnership is NOT liable for Ks entered into by partners who exceeded their authority.

Question 17

Liability of Partners to 3P.

Answer 17

General Partners are jointly and severally liable for debts and obligations incurred by partnership.

Partner is personally liable for
1) all Ks entered into by a Partner within scope of partnership and
2) entire amount of Partnership obligations (entitled to contribution from other partners)

Question 18

DISSOLUTION

Answer 18

A change in legal relationship.

Unless an agreement to the contrary, dissolution occurs by:

1) act of partners (per agreement, mutual assent, expulsion, any partner if partnership at will);
2) operation of law (death); OR
3) by court decree (breach of agreement, unprofitability, misconduct, any other circumstances).

Question 19

Partner Dissociation

Answer 19

Change in partners relationship caused by a partner ceasing to be associated with business.

Ways to dissociate:
(1) Notice of Partner’s express will to withdraw;
(2) Happening of an agreed upon event;
(3) Expulsion pursuant to partnership agreement;
(4) Bankruptcy of partner;
(5) Death/incapacity;
(6) Appt of receiver; or
(7) Termination of a business entity

Question 20

Limited Liability Partnerships (LLPs)

Answer 20

A registered limited liability partnership is a business designation exclusively for professionals. Name of the business must include “LLP/RLLP.” Can have both GP and LPs.

Question 21

LLP Formation

Answer 21

To form an LLP, a statement of qualification must be filed with the secretary of state. Must file annual reports.

Question 22

LP

Answer 22

A limited partnership with both limited and general partners can be created to limit the liability of some partners.

Question 23

LP Formation

Answer 23

To form an LP, a certificate of limited partnership must be executed and filed with secretary of state with of General Partners (GP) and Limited Partners (LPs). Business name must include “Limited Partnership”

Question 24

Corporation

Answer 24

A legal entity (a separate person) created by filing certain docs with the state. Only corporation is liable for corporate obligations. Right to manage the corporation is in BOD, who delegate day-to-day duties to Officers.

Question 25

Corporation Formation

Answer 25

To form a valid corporation, one or more incorporators must file articles of incorporation with Secretary of State. When the SOS accepts Articles, a valid de jure corp is formed. (delivery is conclusive evidence of formation)