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Flashcards in Agency & Partnership Deck (54)
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1

Warrant of authority

If A makes K w/o authority, K is binding but A is liable for damages resulting from breach

2

Apparent Authority

Turns on 3rd party's reasonable and good faith beliefs *focus is on what P has said/done not what A says/does

2

Undisclosed P (effect)

3rd party can back out if: - A falsely rep'd that A was acting for himself - P or A knew 3rd party would not have entered into K

2

Partnership dissolution

W at will partnership Expiration of term M mutual consent E expulsion of a partner B bankruptcy A activities illegal D death

3

Accounting as of right

1. Partner wrongfully excluded from partnership business 2. wrongfully excluded from possession/use of partnership property 3. Partnership agreement says so 4. another partner wrongfully obtains secret profits 5. just and reasonable under the circumstances

4

Transferring partnership rights

- can transfer econ rights - NOT managerial or voting rights

5

Apparent authority factors

1. past dealings btw P and A of which 3rd party is aware 2. Trade customs 3. Industry standards 4. P's written statement of authority 5. Nature of transaction

5

Partnership Actual Authority

Ordinary business: actual authority exists Special business: actual authority does not exist! - assignment of property - disposition of the goodwill of partnership - action that would make partnership impossible - confess a judgment - claim or arbitration

5

Dissolution and partner liablity

Generally, dissolution does not absolve partners of liability, unless: 1. Dissolution due to - illegality - bankruptcy 2. Partner in question lacked even authority to wind up affairs

7

A capacity

minimal capacity = ability to consent to act on P's behalf

7

Partnership (losses and profits)

- each partner entitled to equal share of profits and losses

8

Terminating Agency

- unilateral right - by P or A at any time - must provide notice

8

A's duties to P

1. duty of loyalty - cant use agent rel for personal gain - cannot usurp a biz opp - cannot compete w/ P during agency rel 2. duty of care - commensurate w/ skills - duty of notice

8

Partnership by Estoppel

- some representative action that person is a partner - by the person or w/ her consent - reasonable reliance on the representation - damage as a result of reliance

9

Partner indemnificatoin

Partnership must indemnify partner if sued due to conduct in pursuit of partnership business

10

Continuing partnership after dissolution

- If dissolution due to death or bankruptcy, remaining partners can agree to continue - disassociating partner is paid a fair share of her partnership stake

12

P capacity

Must have legal capacity to possess rights and incur responsibility - unincorporated orgs lack capacity

13

Partnership property

- cannot unilaterally assign away partnership property - cannot use partnership property for personal benefit

14

LLP

Only available to licensed professionals - ease of partnership w/ protection of limited liability w/ the exception of tortious acts

15

Durable power of attorney

- created in writing - intent to create durable power of atty

15

Agent K liability

only if P is undisclosed or partially-undisclosed

16

P tort liability for A's acts

1. Control (day-to-day) 2. Scope of employment - closely connected - common - history - frolic - foreseeability

17

Partnership

Association of 2+ for purposes of carrying on a for-profit business as co-owners - specific intent not required - shared profit = prima facie proof

18

Partnership (J&S)

If partnership has insufficient assets to pay debt, each partner is J&S liable

18

Court ordered partnerhsip dissolution

BIG IPO - B: breaches of partnership agreement - I: incompetence declared - G: guilt of partner such that prejudicially effects partnership continuing - I: oncapable of fulfilling duties - P: profit no longer - O: other circumstances

18

General vs. limited partners

Limited get - limited management rights - limited liability

19

Partnership Accounting

All partners joined and court determines liabilities btw each partner and partnership as a whole. - partners normally not allowed to sue each other

20

Binding the partnership

Each partner is an A of the partnership and can bind the partnership

21

General partner in LP withdrawal as operation of law

1. Assignment of partnership interest 2. Removal in accordance w/ pship agmt 3. Bankruptcy 4. Death/incompetency

22

Ordinary vs special partnership decisions

1. Ordinary - majority 2. Special - unanimous