AGENCY & PARTNERSHIP
(BREEDEN ATTACK SHEET)
-----------------------------------------------------------------------------AGENCY PRINCIPAL’S LIABILITY FOR AGENT’S TORTS (RESPONDEAT SUPERIOR)
REQUIREMENTS FOR PRINCIPAL-AGENT RELATIONSHIP: “ABC” (1) ASSENT (informal agreement between principal and agent; (2) BENEFIT (agent’s conduct must be for principal’s benefit); (3) CONTROL PLUS SCOPE (principal must have right to control agent by having power to supervise the manner of agent’s performance) NO VICARIOUS LIABILITY FOR IND. CONTRACTOR: No vicarious liability for independent contractor because no right to control (except in ultra hazardous activity and estoppel where you hold ind. contractor out as an agent) INTENTIONAL TORTS GENERALLY OUTSIDE SCOPE: Exception if specifically authorized by principal OR natural from nature of
employment (bouncer) OR motivated by desire to serve principal
-------------------------------------------------------------------------PRINCIPAL’S LIABILITY FOR AGENT’S CONTRACTS
EXPRESS AUTHORITY: ORAL (Exception: EQUAL DIGNITIES DOCTRINE- if contract itself must be in writing so must the expressed authority);
REVOCABLE UNLESS DURABLE (Durable Power of Attorney is a written expression of authority to enter into transaction with explicit survival language)
IMPLIED AUTHORITY: (1) NECESSITY (if expressed authority to close deal, then implied authority to rent conference room to meet); (2) CUSTOM;
(3) PRIOR DEALINGS
APPARENT AUTHORITY: (1) PRINCIPAL CLOAKS agent with appearance of authority; AND (2) THIRD PARTY RELIES RATIFICATIONS: KNOWLEDGE + ACCEPTANCE OF BENEFITS (Ex. Agent enters unauthorized contract, but Principal can ratify contract but not alter
its terms)
UNDISCLOSED PRINCIPAL MAY MAKE AUTHORIZED AGENT LIABLE ON CONTRACT
-------------------------------------------------------------------------DUTIES AGENT OWES TO PRINCIPAL
CARE: Exercise reasonable care OBEDIENCE: Not lie or break the law LOYALTY: No self dealing; No usurping principal’s opportunity; No secret profits; Principal may recover losses and may DISGORGE profits
-----------------------------------------------------------------------------PARTNERSHIP FORMATION
NO GENERAL PARTNERSHIP FORMALITIES DEFINE: General partnership is the association of 2 or more persons who are carrying on as co-owners of a business for profit
-------------------------------------------------------------------------LIABILITIES TO 3RD PARTIES
GENERAL PARTNERS ARE LIABLE FOR ALL PARTNERSHIP LIABILITIES: Incoming partner not personally liable for prior debts of
partnership but his capital contribution can be used to pay prior debt; Withdrawing partners are liable on future debts UNTIL actual notice of dissociation is given to creditors OR until 90 days after filing notice of dissociation with the state
ESTOPPEL (MOST LIKELY ON BAR): Representers are liable as if general partners; LANGUAGE TO USE: “As a rule, general partners are liable
personally for all partnership obligations including co-partners torts. In this case, however, Paula and Peter never formed a general partnership because theirs was a lending arrangement not based on sharing profits. Nonetheless, under partnership by estoppel, Paula has represented that she is a partner in a partnership with Peter and therefore will be liable as if she were”
LIMITED PARTNERS, REGISTERED LIMITED LIABILITY PARTIES AND LLC MEMBERS HAVE LIMITED LIABILITY
-------------------------------------------------------------------------RELATIONS BETWEEN PARTNERS
FIDUCIARIES: Duty of Loyalty (no self dealing; no usurping of corporate opportunities; no secret profits); Duty to account for profits ONLY SHARE OF PROFITS IS LIQUID, TRANSFERABLE PERSONAL PROPERTY IN THE ABSENCE OF AN AGREEMENT, EQUAL CONTROL, NO SALARY, EQUAL PROFITS, AND LOSSES LIKE PROFITS
-------------------------------------------------------------------------DISSOLUTION
DEFINITIONS: Dissolution (1) BY EXPRESSED WILL (if partnership at will); (2) PREDETERMINED HAPPENING OF EVENT IN AGREEMENT OR MAJORITY VOTE WITHIN 90 DAYS (partnership is not at will and there is an agreement with conditions) PRIORITY: (1) INSIDE & OUTSIDE CREDITORS (includes partners who have loaned money to partnership); (2) CAPITAL CONTRIBUTORS; (3) PROFITS (IF ANY) SHARED EQUALLY DISTRIBUTION RULE: Each party MUST be repaid their loans plus capital contributions plus their share of profits, but also minus share of losses
(remember that losses are shared like profits absent an agreement)