Agency and Partnership Flashcards
Agency Relationship
P manifests an intent that A act on his behalf and both parties consent
P bound (actual)
P is bound if A had actual authority
actual authority = A reasonably thinks he possesses based on P’s dealings with him; can be expressed or implied from the actions of the P
P bound (apparent authority)
P holds out A as having certain authority; causing a TP to reasonably believe that A has such authority
P’ship
P’ship = two or more people associated to carry on as co-owners a business for profit
a person who receives a share of profits is presumed to be a partner.
Partner is an agent of the partnership for purposes of the business.
P’ship bound on K if the ptr had actual or apparent authority. (actual = authority the ptr reasonably believed he has based on communication with p’ship (outside the ordinary course of business require unanimous consent of the partners)
apparent if the partner acts in the ordinary course of the partnership business or of the kind of business carried out by the partnership. p’ship will be bound unless the partner had no actual authority and the TP knew the partner lacked authority.
Partners are joint and severally liable. But not liable if partner entered K without any authority (actual or apparent)
Employee vs Independent Contractor
The primary factor in Employee vs independent contractor is P’s right to control the method and manner of work.
P is not liable for Independent contractor’s torts unless P creates the appearance that an employer-employee relationship exists, and a TP relies on that relationship P is estopped from denying the existence of the relationship as employment
Dissociated Partner
A partner is dissociated from P’ship on notice of his express will to withdraw. A p’ship at will is dissolved and its business must be wound up when a ptr notifies the p’ship of his intent to withdraw.
P’ship will be bound by a ptr’s post-dissolution act if the act was appropriate for winding up the business. Also, liable if not appropriate if TP did not know of dissolution.
If a partner pays more than share can require other partners to pay pro-rata share.
Profits shared equally and losses split in the same ratio as profits unless agreed otherwise.
Creditors must seek satisfaction from p’ship and then the partners personally to the extent not covered by the partnership.
Limited P’ship
A limited P’ship has at least one general partner and one limited partner.
Not formed unless a certificate is filed with the state and signed by all general partners.
Limited partners are free from liability for p’ship obligations.
Partners rights
Equal rights in the management of the business. (Acts within an ordinary business need a majority vote.)
Each partner owes a fiduciary relationship and must account for the benefits derived by a partner from the partnership business and must not compete with the partnership.
