Agency & Partnership Rules

Question 1

Courts generally hold the principal liable for agents’ minor deviations, often referred to as a

Answer 1

“detour”.

Question 2

Under Virginia law, a partnership is…

Answer 2

an association of two or more persons to operate a business
for profit as co-owners.

Question 3

in order to create a partnership, it is not necessary for the parties to…

Answer 3

enter into a written agreement or file with the state. Rather the parties simply must, in fact, operate a business as co-owners.

Question 4

Profit sharing triggers a presumption of…

Answer 4

partnership, and other indicia of partnership include sharing control and sharing losses.

Question 5

A partnership is liable for the tort of a partner if the partner was…

Answer 5

acting in the ordinary course of partnership business.

Question 6

Under partnership law, partners are jointly and severally liable for all debts of the partnership, including…

Answer 6

tort and contract obligations.

Question 7

Partners who formed a professional corporation but continue to conduct their
business as a partnership may…

Answer 7

have their rights and liabilities determined according to the law of partnership.

Question 8

A _______ ____________ __________ is not required to create a partnership.

Answer 8

written partnership agreement

Question 9

Agreement to _____ _______ is not a prerequisite to forming a
partnership

Answer 9

share losses

Question 10

A partner in a partnership is personally liable for…

Answer 10

the debts of the business.

Question 11

General partners have the authority to…

Answer 11

enter into legal contracts on behalf of the partnership.

Question 12

Each partner is an ______ of the partnership for the purpose of its business.

Answer 12

agent

Question 13

In order to create a limited partnership in Virginia, the partners must…

Answer 13

file a certificate of limited partnership with the SCC and pay the required filing
fee.

Question 14

Partners are not liable for debts incurred after…

Answer 14

their dissociation.

Question 15

A partnership is bound by partner’s act if…

Answer 15

that act is appropriate for winding up the partnership business.

Question 16

A designation of an agent to execute documents in ones own name that pertain to a document that is subject to the Statute of Frauds is…

Answer 16

also subject to the Statute of Frauds.

Question 17

Apparent authority is based on…

Answer 17

the principal’s holding out of the agent and the third party’s reasonable belief the that the agent is authorized.

Question 18

In order to bind a principal in contract, the agent must…

Answer 18

Iact with either actual or apparent authority, or the principal must subsequently ratify the contact.

Question 19

In order to ratify, the principal must..

Answer 19

know the material terms of the contact, or be aware of his lack of knowledge, and fail to object to the contract.

Question 20

Silence may constitute ratification when…

Answer 20

a principal would have been expected to speak out.

Question 21

Where an employer is found liable for his employee’s torts under the doctrine of respondeat superior, the employer has an…

Answer 21

indemnification claim against the tortfeasor employee.

Question 22

In order to create a partnership, the parties do not need to…

Answer 22

use the term “partnership.”

Question 23

There is no requirement that the parties explicitly agree to _____ _______ in order to create a partnership.

Answer 23

share losses

Question 24

Partners have a legal right for an ______ __ _________ of their partnership.

Answer 24

action for accounting

Question 25

Preparing a venture that could result in a breach of duty of loyalty (is/is not) in itself a breach of the duty.

Answer 25

is not

Question 26

An agent is not acting within the scope of his agency if he, among other factors,…

Answer 26

was not acting with a purpose to serve his employer’s interests.

Question 27

Under the borrowed servant doctrine, the borrowing employer may be liable for torts committed by the borrowed employee, if the following factors suggest he should be liable:

Answer 27

(1) who has control over the employee and the work he is performing;
(2) whether the work performed is that of the borrowing employer;
(3) was there an agreement between the original employer and the borrowing employer;
(4) did the employee acquiesce in the new work situation;
(5) did the original employer terminate its relationship with the employee;
(6) who is responsible for furnishing the work place, work tools and working conditions;
(7) the length of the employment and whether it implied acquiescence by the employee;
(8) who had the right to discharge the employee; and
(9) who was required to pay the employee.

Question 28

Apparent or ostensible agency is not a basis
for…

Answer 28

tort liability in Virginia.

Question 29

Although one is generally not liable for the torts of an independent contractor, there is an exception to this rule when the independent contractor is…

Answer 29

hired to perform an inherently dangerous activity. Under Virginia law, employing an
armed security guard in a retail store is not inherently dangerous.

Question 30

Virginia courts consider various factors to determine whether an individual is an employee or an independent contractor, but the determinative factor is…

Answer 30

the power to control the means and method of performing the work.

Question 31

Under Virginia law, an act generally is within the scope of the employment if:

Answer 31

(1) it was expressly or impliedly directed by the employer, or is naturally incident to the business, and
(2) it was performed, although mistakenly or illadvisedly, with the intent to further the employer’s interest, or from some impulse or emotion that was the natural consequence of an attempt to do the employer’s business.

Question 32

An employer may be liable for an employee’s intentional tort if…

Answer 32

1. it further the employer’s business
2. it is a part of the typical job, or
3. the employer ratified it.

Question 33

Under purported partnership, or partnership by estoppel, a
person who…

Answer 33

represents herself as a partner, or consents to being represented by another as a partner, is liable to third parties who extend credit to the apparent partnership in reliance on the representation.

Question 34

Being in charge of operations may include authority to…

Answer 34

take extraordinary measures if necessary to save the business.

Question 35

An agent has apparent authority if:

Answer 35

there was a manifestation by the principal that the agent had authority and the agent reasonably believed he was authorized.

Question 36

Limited partners are not personally liable for…

Answer 36

the debts and obligations of the limited partnership.

Question 37

Limited partners can lose their limited liability if:

Answer 37

They participate in the control of the business and the third party reasonably believes that the limited partner is a general partner.

Question 38

General partners owe a duty of ______ to the partnership.

Answer 38

loyalty

Question 39

If a general partner violates the duty of loyalty, a limited parter can sue for…

Answer 39

damages from the breach and disgorgement of profits.

Question 40

In Virginia, the factors which are to be considered when determining whether an individual is an employee or an independent contractor are:

Answer 40

(1) selection and engagement,
(2) payment of compensation,
(3) power of dismissal, and
(4) power to control the work of the individual.

The fourth factor, power to control, is determinative.

Question 41

A limited partner does not have authority to ______ ____ __________ based solely on his status as a limited partner.

Answer 41

bind the partnership

Question 42

The Virginia Code requires that a limited partnership amend its certificate of limited partnership within…

Answer 42

30 days of a general partner withdrawing.

Question 43

Limited partners are liable for…

Answer 43

any of their unpaid contributions to the partnership.

Question 44

. Apparent authority requires that the third party reasonably believe, based upon manifestations of the principal, that…

Answer 44

the agent has authority to enter into the transaction.

Question 45

When an agent enters into a contract on behalf of a principal, the agent impliedly warrants to the third party that he has authority to enter into the contract. If the agent does not have such authority, then…

Answer 45

the agent is liable to the third party on the contract.