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Flashcards in Agency and Partnerships Deck (5)
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1
Q

Carpenter hired Trainee to help Carpenter build kitchen cabinets out of wood. For five years, Trainee developed greater and greater skill from practice and from Carpenter’s instructions, until she learned to make the cabinets herself. Trainee decided to go out on her own to make more money. Trainee’s departure
will be a breach of her fiduciary duty to Carpenter if she:

A

Began approaching Carpenter’s customers to ask for their business while still
an employee of Carpenter.

2
Q

Abe and Betty agreed to form a general partnership to sell umbrellas. They did not opt out of any of the partnership default rules. Abe would contribute 10% of the capital but do 90% of the work, while Betty would contribute 90% of the capital but do only 10% of the work. Six months after the partnership started, Abe called a partnership meeting at which he proposed that the partnership start selling rain coats. Betty strongly disagreed. Abe voted in
favor of his proposal, while Betty voted against it. What has the partnership decided to do and why?

A

The partnership has not decided to start selling rain coats because a majority
of the partners have not voted in favor.

3
Q

Sloppy Joe was the manager of a fast food restaurant, ThickBurger. Sloppy Joe was rather clumsy, and often dropped burgers on the floor by accident. Rather than waste the meat, Joe simply picked them up and placed in buns for sale. Francine Fryer, a ThickBurger employee, repeatedly warned Sloppy Joe that this was a dangerous Health Code violation, but Sloppy Joe ignored her. Finally, worried that Joe might be making people sick, Fryer reported him to the Department of Health. When Joe found out, he fired Fryer. Fryer sued for reinstatement. Under which of the following grounds is Fryer MOST LIKELY to succeed in her suit?

A

Joe tortiously fired Fryer in violation of public policy.

4
Q

Owner tells Manager, “Please lease apartment 5B. Get the highest rent you can, but do not rent the apartment for anything less than $1,000 per month.” Owner then advertises in the newspaper, “Contact Manager to rent apartment 5B.” The advertisement provides Manager’s phone number but says nothing about the amount
of rent. Renter sees the advertisement, calls Manager, and offers to rent the apartment for $950 per month. Manager accepts. Is there a contract?

A

Yes, because Manager had apparent authority.

5
Q

Investor and Entrepreneur agreed to form a partnership to sell a new software program that Entrepreneur had written. The software was used by businesses to record their expenses. Investor would furnish 60% of the investment capital; Entrepreneur would supply the other 40% of the necessary capital and would also run the business. The partnership was enormously successful, and Entrepreneur became famous. Three years after the start of this partnership, Developer asked Entrepreneur if he would like to write a new software program aimed at consumers. Developer would supply half the necessary capital and Entrepreneur the other half. The new program would help consumers organize their music collections. Is Entrepreneur required to ask Investor if she would like to participate in this new venture?

A

No, because the new venture is too different from the old.