Agency & Partnerships Flashcards
(268 cards)
1
Q
What is agency?
A
The principal grants authority for the agent to act on behalf of/under the control of the principal to deal with third parties
2
Q
Not all contractual ________ are required to create a principal-agent relationship.
A
Formalities
3
Q
Agency is a ______ duty.
A
Fiduciary
4
Q
Agency arises when one person manifests assent to another person that:
A
- The agent shall act on the principal’s behalf AND
- Subject to the principal’s control
5
Q
Who must assent to an agency?
A
Both the principal and the agent
6
Q
When agency is created via agreement, what are the requirements?
A
- Assent from both parties
- Benefit of the principal
- Possessor has the right to control the agent
7
Q
Agency created by estoppel requires ____________.
A
Third-party reliance on principal’s actions
8
Q
Apparent authority is created when:
A
- Third-party reasonably believes the actor to be authorized
- Manifestation of belief
9
Q
Agencies created by statute are typically created to ________.
A
Accomplish a limited purpose
10
Q
An agency is created by ratification when __________.
A
Authority is conferred by the principal after the agent has already entered into the contract
11
Q
A person who lacks _______ cannot appoint an agent.
A
Capacity
12
Q
What happens when a person without capacity appoints an agent who then enters into a contract?
A
non-competent “principal” is not liable for the contract
13
Q
An individual has capacity to act as principal if _______________.
A
At the time the agent takes action, the individual would have capacity if acting on behalf of herself
14
Q
Who has capacity to act as an agent?
A
Anyone with minimal mental capacity
15
Q
An agent can be disqualified for:
A
- Not having required licenses OR
- For representing both parties
16
Q
Is consideration required for formation of an agency relationship?
A
No
17
Q
Writing is not generally required for the creation of agency unless the _________ rule applies.
A
Equal dignity rule
18
Q
What is the equal dignity rule?
A
if a contract is within the SoF, then written authorization is required for someone else to legally enter the contract on your behalf
19
Q
What is the exception to the equal dignity rule?
A
Principal cannot assert lack of writing if a third party detrimentally relied on the contract
20
Q
General partnership are governed by what law?
A
Revised Uniform partnership Act (RUPA)
21
Q
Although general partnerships are governed by RUPA, partners are free to agree to govern their relationships by ____________.
A
Any rules they agree upon
22
Q
RUPA will govern any partnership issues that are not _________.
A
Expressly provided for in the partnership agreement
23
Q
What is a general partnership?
A
Association of 2+ persons who are carrying on as co-owners of a business for profits
24
Q
Who is a person for purposes of a partnership?
A
Individual, corporation, partnership, trust, or other entity
25
The contribution of money in return for a profit share creates a presumption of _______.
A general partnership
26
The presumption of general partnership stemming from shared profits can be rebutted by evidence indicating that __________.
Persons did not intend to create a partnership
27
What are the exceptions for sharing of profits created a presumed partnership?
Profits were received in payment:
1. Of a debt
2. For services of an independent contractor OR of wages/compensation to an employee
3. Of rent
4. Of an annuity/other retirement/health beneficiary, representative or designee or deceased/retired partner
5. Of interest/charge on a loan
6. For the sale of goodwill of a business/other property
28
There are no ______ formalities for general partnerships.
Formation
29
A partnership can be made for ______ purposes only.
Legal
30
Is a writing required for the formation of a partnership?
No
31
What happens if a partner does not have capacity?
1. Partnership exists until the partnership is dissolved
2. Only liable to extent of their capital contributions
32
What is the knowledge in terms of partnerships?
A person knows a fact if the person has actual knowledge of it
33
A parter has notice of a fact if the partner:
1. Knows of it
2. Received notification of it OR
3. Has reason to know it exists from all facts known to the person at the time in question
34
A partner's knowledge of a fact relating to a partnership is effective immediately except ____________.
In the case of fraud on the partnership committed by/with the consent of that partner
35
A partnership agreement may not unreasonably restrict the right of access to _____ and ______.
Books
Records
36
A partnership agreement may not eliminate the duty of _______.
Loyalty
37
A partnership may not unreasonably reduce the duty of care, but it may identify _________.
Specific types/categories of activities that don't violate the duty of loyalty
38
A partnership agreement may not eliminate the obligation of good faith & fair dealing, but it may ________.
Prescribe the standards by which obligation performance is to be measured
39
A partnership agreement may not vary the power to dissociate as a partner - except to __________.
Require the notice of the partner's express will to withdraw to be in writing
40
A partnership agreement may not vary the right of _____ to expel a partner.
A court
41
A partnership agreement may not vary the requirement to wind up __________.
The partnership business
42
A partnership agreement may not vary the law applicable to ________.
Limited liability partnerships
43
A partnership agreement may not restrict the rights of ________.
Third parties
44
What is actual authority?
The agent/principal have agreed that the agent will act on the principal's behalf in a certain capacity
45
Actual express authority exists where ________.
The principal expressly authorizes the agent with written/spoken words to enter into a contract
46
Actual express authority is narrowly construed by _________.
The words used by the principal to confer express authority
47
What is the equal dignities doctrine?
If the contract itself must be in writing, then so must be the express authorization
48
Actual express authority is revocable by:
1. Either party at any time OR
2. Death/incapacity of the principal
49
Actual express authority is revocable via death/incapacity of the principal unless ____________.
The principal gives the agent DPOA; such authorization is irrevocable upon death
50
What is a power of attorney?
A written expression of authority
51
When is a power of attorney durable?
Conspicuous survival language
52
When is there actual implied authority?
Authorization is inferred from conduct/circumstance
53
Actual implied authority includes:
1. Necessity
2. Custom
3. Prior dealings
54
What is the implied authority to necessity?
Authority to do all tasks necessary to accomplish expressly authorized tasks
55
Beyond just accomplishing expressly-authorized tasks, agents have an implied power to take necessary tasks in emergencies during which ___________.
Agent cannot communicate conveniently with the principal
56
What are custom powers under actual implied authority?
Authority to do all tasks that are customarily performed by persons with the agent's title/position
57
What are prior dealings powers under actual implied authority?
Authority to do all tasks that the agent believes are authorized based on principal's prior acquiescence
58
A principal will be liable if there is ________________ of authority to third parties.
Appearance
59
What is the two-part test for apparent authority?
1. Principal cloaks agent with appearance authority AND
2. Reliance by third party
60
What are the types of apparent authority?
1. Imposters
2. Secret limitation
2. Lingering authority
61
When do imposters have apparent authority?
If a principal negligently permits an imposter to appear to have agency authority, the principal will be liable for actions undertaken with such authority
62
How does secret limitation create apparent authority?
The agent acts beyond the scope of her actual authority, unknown to the third party
63
How does lingering authority create apparent authority?
Principal has revoked actual authority, but the agent continues to act on principal's behalf.
64
When does lingering authority terminate?
1. When principal notifies third parties of termination OR
2. When principal dies or is incompetent
65
Notice to terminate lingering authority may be ______ or ______.
Actual
Constructive
66
What is ratification?
Authority conferred by the principal AFTER the agent has already entered into the contract
67
Ratification requires:
1. Knowledge of all material facts
2. Acceptance of the contract's benefits
3. Principal has capacity
68
In order to accept a contract's benefit under ratification, the principal must __________.
Ratify the entire contract
69
A principal will be vicariously liable for torts committed by an agent if:
1. Principal-agent relationship exists AND
2. Tort occurred in the scope of the principal-agent relationship
70
What is the doctrine of respondeat superior?
Principal will be vicariously liable for torts committed by the agent
71
What is the test to determine whether a tort occurred in the scope of a principal-agent relationship?
1. Within agent's job description
2. Tort occurred on the job
3. Conduct intended for principal's benefit
72
If a task was within the scope of an agent's job description, then it will be considered within the scope of ________.
Agency
73
In terms of respondeat superior, what is a frolic?
A new and independent journey which is outside the scope of agency
74
In terms of respondeat superior, what is a detour?
Mere departure from assigned task - still within the scope of agency
75
Even a ______ benefit to the principal is inside the scope of agency.
Partial
76
________ torts tend to be outside the scope of agency.
Intentional
77
Intentional torts will be considered within the scope of agency if the conduct was:
1. Specifically authorized by principal
2. Part of the nature of employment OR
3. Motivated by desire to serve the principal
78
There is no vicarious liability for a sub-agent's tort unless there is:
1. Assent
2. Benefit AND
3. Right
...to control the sub-agent
79
There is no vicarious liability for a borrowed-agent's tort unless there i:
1. Assent
2. Benefit
3. The right
...to control the borrowed-agent
80
If an independent contractor commits a tort while engaged in ___________, there will be vicarious liability.
Ultra-hazardous activity
81
How does estoppel make a principal liable for an independent contractor's actions?
If principal holds out an independent contractor with the appearance of agency
82
A principal will be liable for the torts of an independent contractor if the principal has delegated ________ duties to the independent contractor.
Nondelegable
83
A principal is liable for tortious acts committed when the principal knowingly selected a _________ independent contractor.
Incompetent
84
A principal can be found liable for the negligent hiring of ________.
An agent
85
A principal can be found liable for negligent retention of an agent after becoming aware that __________.
The agent is unfit
86
A principal can be held liable for _______ supervision of an agent
Negligent
87
What is the general rule for contract liability for agents?
Principal is liable for contracts entered into by her agent if the principal authorized the agent to enter the contract
88
If there is no authority, _______ but not _______ is liable for a contract.
The agent
The principal
89
If there is authority, _______ but not _______ is liable for a contract.
The principal
The agent
90
Where there is a _______ or _______ principal, the authorized agent may be liable at the election of the third party.
Undisclosed
Partially diclosed
91
What types of authorization are available?
1. Actual express authority
2. Actual implied authority
3. Apparent authority
4. Ratification
92
An agent is only liable for _________ contracts entered into on the principal's behalf.
Unauthorized
93
An authorized agent may be liable even on an authorized contract when there is a ________ or _______ principal.
Undisclosed
Partially disclosed
94
When there is a disclosed principal, ___________ may enforce third-party liability.
only the principal
95
When there is an undisclosed/partially disclosed principal, ___________ may enforce third-party liability.
Either principal or agent
96
If a partner wants to act outside the scope of partnership, _________ is required.
Actual authority
97
Actual authority to act outside the scope of partnership is granted to a partner via __________ or __________.
Partnership agreement
Vote of the partners
98
Typically, the act of any partner _____________ binds the partnership.
Carrying on in the ordinary course of the partnership business
99
The act of any partner carrying on in the course of partnership business binds the partnership unless:
1. Partner had no authority to act for the partnership in the matter AND
2. 3rd party knew/had received notification that the partner lacked authority
100
A third party has received notification that a partner lacked authority if the notification:
1. Is duly delivered at person's place of business OR
2. Comes to the person's attention
101
If a partnership files a statement of partnership authority with the secretary of state, this ____________.
Gives constructive knowledge of the partners' authority to bind the partnership
102
A properly filed statement of authority is binding on the partnership in favor of ___________.
A person who gives value w/o actual knowledge to the contrary (unless limited by another filed statement)
103
Partners may alter the default rights and obligations of a partnership by ________.
Agreement
104
In absence of terms in a partnership agreement, each partner is deemed to have an account that is:
1. Credited with contributions & share of profits AND
2. Debited with share of losses & liability
105
In absence of terms in a partnership agreement, what is the rule for profit sharing?
Partners share profits equally
106
In absence of terms in a partnership agreement, what is the rule for loss sharing?
Parents share losses equally
107
In absence of terms in a partnership agreement, partners have a right to indemnification for __________.
Expenses incurred on behalf of the partnership during ordinary course of partnership
108
In absence of terms in a partnership agreement, partners have a right to contribution if ____________.
Partner paid more than her share of partnership liability
109
In absence of terms in a partnership agreement, each partner has equal rights in the _____ and _____ of the partnership business.
management
conduct
110
In absence of terms in a partnership agreement, ordinary business decisions may be decided by ___________.
Majority vote
111
In absence of terms in a partnership agreement, one partner gets how many votes?
One
112
In absence of terms in a partnership agreement, decisions made outside of the course of ordinary business require __________.
Unanimous consent
113
In absence of terms in a partnership agreement, a person may become a partner only with ________.
Consent of all partners
114
In absence of terms in a partnership agreement, what salaries are partners entitled to?
Typically, none.
115
In absence of terms in a partnership agreement, partners receive no salary unless for services rendered in __________.
Winding up the business of partnership
116
In absence of terms in a partnership agreement, each partner has the right to ______ and _______ partnership books
Inspect
Copy
117
In absence of terms in a partnership agreement, partnership books must be kept at _________.
Partnership headquarters
118
In absence of terms in a partnership agreement, upon demand, each partner must account to the partnership __________.
True and full information about all things affecting the partnership
119
In absence of terms in a partnership agreement, each partner is personally liable for the _______ and ________ of the partnership.
Debts
Obligations
120
In absence of terms in a partnership agreement, partners are personally liable for torts committed by fellow partners that are __________.
In the scope of usual partnership business
121
In absence of terms in a partnership agreement, partners are personally liable for contracts that are ____________.
Entered into by partners with partnership authority
122
In absence of terms in a partnership agreement, any partner may transfer partnership property if _________.
She has partnership authority to do so
123
In absence of terms in a partnership agreement, if a partner lacked authority to transfer partnership property but does so anyway, the partnership's remedies will depend on _________.
Whether or not the property was identified as partnership property to the transferee in the transaction
124
In absence of terms in a partnership agreement, if a partner transfers partnership property without authority, then ____________.
The partnership can recover property from initial transferee, but not from subsequent bona fide purchaser
125
In absence of terms in a partnership agreement, if a partner transfers nonpartnership property without authority, then ____________.
Transferee takes free of partnership interest if BFP
126
One who represents to 3rd party that a general partnership exists will be liable to that party as if _______.
A general partnership exists
127
What does it mean that there is no duty of denial?
A person held out by another as a partner is not liable unless he actually consents to representation
128
If all partners of an existing partnership consent to the representation, a ________ obligation results.
Partnership
129
Unanimous consent of other partners is required for ________ unless there is _______.
new partners
an agreement to the contrary
130
Someone admitted as a partner into an existing partnership is not personally liable for any partnership obligation that is _________.
Incurred before the person's admission as a partner
131
A new partnership has no personal liability to _________ creditors of a partnership
Existing
132
Only a new partner's __________ is at risk for the satisfaction of existing partnership debts.
Investment in the firm
133
A partner's dissociation does not of itself discharge the partner's liability for ____________.
A partnership obligation incurred before dissociation
134
A dissociated partner retains liability as a partner for transactions entered into by the partnership within ______ of departure if:
Two years
1. Reasonably believes dissociated partner is still a partner AND
2. Didn't have notice of partner's dissociation
135
No partner will be criminally liable for crimes committed by other partners in the scope of the partnership unless __________.
She was a principal/accessory to the crime's commission
136
Business partners may sue one another for:
1. Breach of partnership agreement
2. Violating duty to the partnership OR
3. Causing harm to partnership
137
Should a partnership be sued in one action or separate actions?
Either
138
A judgment against a partnership is not a judgment against ______.
A partner
139
What is a limited partnership?
Composed of at least one general partner and at least one limited partner
140
What are the formalities required of a limited partnership?
1. At least one general partner
2. At least one limited partner
3. Must file limited partnership certificate
4. Records office
5. Agent for service of process
141
In order to form a limited partnership, a certificate of limited partnership must be _________ and filed in _________.
Executed
the Secretary of State
142
A certificate of limited partnership must set forth:
1. Name of limited partnership
2. Name & address of the agent for service of process
3. Name & business address of each general partner
4. Latest date upon which the limited partnership is to disolve.
143
The name of a limited partnership must include __________.
The words "limited partnership"
144
The name of a limited partnership may not contain the name of a limited partner unless:
1. It's also the name of a general partner OR
2. Partnership business carried on under that name before the admission of that limited partner
145
How long do records from a limited partnership need to be kept?
For the three most recent years
146
Each limited partnership shall continuously maintain in its state of organization an agent for _____________.
Service of process on the limited partnership
147
When can a person become a partner to a limited partnership?
1. At the time limited partnership is formed OR
2. At any later time as provided in the partnership agreement
148
If a partnership agreement is silent, the admission of partners to a limited partnership requires ___________.
Written consent of all partners
149
Contribution of a limited partner may be in what forms?
1. Cash
2. Property
3. Services rendered
4. Promissory note/obligation to contribute cash/property or to perform services
150
A promise by a limited partner to contribute to a limited partnership is not enforceable unless _________.
Set out in a writing signed by the limited partner
151
If a partner does not make the required contribution of property or services, the limited partnership may demand that __________.
A partner contribute cash equal in value
152
Unless otherwise provided in a partnership agreement, the obligation of a partner to make a contribution may be compromised only via _________.
Consent of all partners
153
The obligation of a partner to make a contribution may be compromised only via partner consent - but even that doesn't work if ____________.
Creditor of the partnership relies on a written pre-compromise obligation
154
If a partner receives the return of any part of her contribution without violating a limited partnership agreement, she is liable to the partnership for a period of _____________ until _________.
One year
She can discharge limited partnership's liabilities to creditors
155
If a partner recieves the return of any part of her contribution in violation of a limited partnership agreement, she is liable to the limited partnership for a period of _________ for ________.
Six years
The entire amount of the contribution wrongfully returned
156
Profits and loses of a limited partnership are allocated among the partners in what manner?
1. The manner provided in writing in the partnership agreement (or, if that's not the case)
2. Basis of value of the contributions made by each partner
157
What are the rights and liabilities of general partners in a limited partnership?
1. Right to manage
2. Right to vote on any matter
3. Personal liability for debts & obligations of the limited partnership
158
What is the general partner right to manage?
Right to manage the business
159
Limited partners have no right to ______.
Manage
160
A partnership agreement may grant limited partners the right to vote on _______.
Any matter
161
What are a limited partner's rights to obtain partnership information?
1. Inspect and copy any of the partnership records required to be maintained AND
2. Upon reasonable demand, obtain from general partners information relating to the partnership
162
A limited partner may bring a derivative action on behalf of the partnership if:
1. General partners have refused to bring the action OR
2. An effort to cause the partners to bring an action is not likely to succeed
163
Limited partners are only personally liable for a partnership's debts/obligations if:
1. Limited partner is also a general partner
2. Limited partner participates in controlling the business
3. Limited partner knowingly permits her name to be used in the name of the partnership
164
If someone erroneously believes herself to be a limited partner and makes a contribution, she is not liable for its obligations as a general partner if:
1. She files an appropriate certificate of limited partnership or certificate of amendment OR
2. Withdraws from future equity participation by filing a withdrawal certificate with the Secretary of State
165
A third person erroneously believes herself to be a limited partner. Regardless of her own actions, she will still be liable as a general partnership if:
1. Third-party believed in good faith that the person was a general partner AND
2. Transaction occurred before filing/withdrawal
166
A partnership is assignable in whole or in party by both _____ and ______ partners.
General
Limited
167
What is the effect of assigning partnership interest?
1. Entitles assignee to receive only the distribution assignor would be entitled AND
2. Partner ceases to be a partner upon assignment of all partnership interest
168
Assignment of partnership interest does not dissolve ________.
The partnership
169
Assignment of partnership does not entitle the assignee to:
1. Become a partner
2. Exercise any rights of a partner
170
Who may withdraw from a limited partnership?
Both general and limited partners
171
How may general partners may withdraw from a limited partnership?
At any time by giving written notice to other partners
172
How may limited partners may withdraw from a limited partnership?
At least six months' prior notice to each general partner
173
What is an LLP?
Limited liability partnership
174
Under an LLP, no partner is personally liable for __________.
Obligations of the partnership
175
Under an LLP, a partner is still liable for ________.
Her own wrongful acts
176
What are the formalities of an LLP?
1. Terms/conditions must be approved via vote
2. Filing statement of qualification
3. Annual report to Secretary of State
177
In an LLP, where a partnership agreement is silent as to how it may be amended, ______________ is required for amendment.
Unanimous vote
178
A statement of qualification for an LLP must contain:
1. Name & address of the partnership
2. Statement that partnership elects to be LLP
3. Deferred effective date
179
What changes about a statement of qualification for an LLP where the partnership has no office in the state?
Use the name/address of the partnership's agent for service of process
180
At what time does a partnership become an LLP?
1. Time of statement filing OR
2. Date specified in statement
...whichever is later
181
What must be included in an LLP's annual report?
1. Name of LLP AND
2. Current address of the partnership's chief executive office and of any office in this state (if any)
182
The failure of a limited liability partnership to __________ is a basis for the Secretary of State to administratively revoke its statement of qualification.
File an annual report
183
Name provisions of a limited liability partnership are intended to alert people of __________.
The presence of a liability shield
184
Agents have a fiduciary duty to exercise ____________.
Reasonable care
185
Agents have a fiduciary duty to obey _________.
Reasonable instructions
186
When does an agent breach a duty of loyalty?
1. Self-dealing (receiving benefits)
2. Usurping principal opportunities OR
3. Secret profits
187
What remedies does a principal have for breach?
1. Recover losses caused by breach AND
2. Disgorge profits made by the breaching agent
188
The principal's duties in a principal-agent relationship are created via _______.
Contract
189
If an agreement is silent to compensation, the agent is entitled to ____________.
Reasonable compensation
190
What is the principal's duty to idemnify?
A principal has a duty to indemnify an agent in accordance with the terms of any contract between them
191
Unless otherwise agreed, a principal has a duty to indemnify an agent when:
1. Agent makes a payment:
a. within the scope of the agent's actual authority OR
b. that is beneficial to the principal
2. Agent suffers and los
192
A principal has a duty to cooperate with an agent, which means _________.
Not unreasonably interfering
193
What are an agent's remedies for breach of an agency relationship?
1. Contractual remedies for breach
2. Possessory lien from any money due from principal
3. Real estate broker's contracts
194
What are nonexclusive real estate broker contracts?
Require a broker to show that she had arranged a sale to a ready, willing, and able buyer in order to earn the promise commission
195
What are exclusive real estate broker contracts?
Real estate broker has earned promised commission when the broker produces a buyer who is ready, willing, and able to purchase at the terms set by the seller
196
What is a partner's fiduciary duty of care?
No negligent, reckless, or unlawful conduct
197
What does a partner's fiduciary duty of loyalty require?
1. No secret profits at partnership's expense
2. No self-dealing
3. No usurping partnership opportunities
198
Under a partner's fiduciary duty of loyalty, what does it mean that there can be no secret profits at partnership's expense?
Account for all profits & benefits described in connection with partnership business
199
Under a partner's fiduciary duty of loyalty, what does it mean that there can be no self-dealing?
Refrain from dealing with partnership as an adverse interest
200
Under a partner's fiduciary duty of loyalty, what does it mean that there can be no usurping partnership opportunities?
Partners may not compete with partnership
201
What are the partnership remedies for breach?
1. May recover losses caused by breach AND
2. Disgorge profits made by the breaching partner
202
Property acquired by a partnership belongs to whom?
The partnership, not individual partners
203
A partner may only possess partnership property on behalf of _________.
The partnership
204
If _________ were used to acquire property, that property is partnership property.
Partnership funds
205
What governs the classification of titled real or personal property?
RUPA
206
Partnership property is titled if:
1. Titled in the partnership name OR
2. TItled in the name of one/more partners and instrument transferring title notes titleholder's capacity as partner or the existence of the partnership
207
Property is presumed to be partnership property if purchased with partnership assets, even if ________.
Not acquired in the name of the partnership
208
If there is titled property, there is a rebuttable presumption of partner's separate property if:
1. Property held in the name of 1+ partners
2. Instrument transferring title doesn't note titleholder's capacity a partner or existence of a partnership
AND
3. Partnership funds not used to acquire property
209
If real or personal property is not titled, the court will look to the following factors to determine if the property is partnership or separate property:
1. Property acquired with partnership funds
2. Use of the property by the partnership
3. Property appears on partnership balance sheet
4. Improvement and/or maintenance of the property with partnership funds
210
Certain assets cannot be transferred without partnership authority. What are they?
1. Land
2. Leases
3. Equipment
211
Partnership interest is transferable without ____________.
Dissolving the partnership
212
Without an agreement to the contrary, partners share ____ and _____ equally.
Profits
Loss
213
If an asset is owned by a partnership itself, then no individual partner may _________.
Transfer their share in management to a third party
214
Upon the death/withdrawal of a partner, what rights does a successor gain?
1. Right to join partnership
2. Right to receive a share of compensation
215
What rights do assignees have?
1. May become limited partners
2. Right to distributions/allocations
216
An agent's actual authority may be terminated by:
1. Lapse of time
2. Occurrence of specified event
3. Change in circumstances
4. Agent breaches fiduciary duty
5. Unilateral termination by either party
6. Operation of law
217
When will a change in circumstances terminate actual authority?
1. Destruction of subject matter
2. Insolvency of principal/agent
3. Change in law/business conditions
218
When will operation of law terminate actual authority?
Death/incapacity of principal/agent terminates the agency, unless there is DPOA
219
What kinds of agency relationships are irrevocable?
1. Agency coupled with an interest AND
2. Power given as security
220
What is an agency coupled with interest?
When the agent herself has an interest in the subject-matter of the agency
221
What is a power given as security?
Power to affect the legal relations of its creator that is:
1. Created in the form of a manifestation of actual authority AND
2. Held for the benefit of the holder/third person
222
If there is a loss of mental capacity by the grantor, what happens to a power given as security?
Survives
223
If there is a death of the grantor, what happens to a power given as security?
Does not survive unless power given a security for performance of duty that doesn't terminate with creator's death
224
Termination of _____ authority does not by itself end any apparent authority held by an agent.
Actual
225
Apparent authority ends when it is no long reasonable for __________.
3rd party with whom the agent deals to believe the agent continues to act with actual authority
226
What is a dissociation?
Change in partnership caused by any partner no longer being associated with the partnership
227
A partner's dissociation is wrongful only if:
1. It breaches the partnership agreement
2. Partnership was for definite terms or a particular undertaking
228
In a case of a partnership for a definite term or particular undertaking, one of the following must occur before the expiration of the term:
1. Partner withdraws by express will
2. Partner is expelled by judicial determination
3. Partner dissociated by becoming a debtor in bankruptcy OR
4. Partner that is entity expelled or otherwise dissociated
229
A partner who wrongfully dissociates is liable to the partnership/other partners for __________.
Damages caused by the dissociation
230
A partner who wrongfully dissociates before the expiration/completion of a particular term/undertaking is not entitled to ________.
Payment of any portion of the buyout price until the expiration of the term/completion of the undertaking
231
A partner is dissociated from a partnership upon the occurrence of any of the following events:
1. Notice of partner's express will to withdraw
2. Occurrence of specified event
3. Expulsion of partner
4. Partner's bankruptcy
5. Partner's death/incapacity to perform partnership duties
6. Appointment of a receiver
7. Termination of business entity that was a partner
232
A partner can be expelled by the unanimous vote of other partners if:
1. Unlawful to carry on partnership business with that partner
2. Transfer of all or substantially all of that partner's transferable interest in the partnership
3. Partnership in which partner has been dissolved & business i being wound up
233
On application by partnership/another partner, a partner can be expelled via judicial determination because:
1. Partner engaged in wrongful conduct that adversely/materially affected the partnership business
2. Partner willfully/persistently committed a material breach of the partnership agreement or of a duty owed to the partnership/other partners
3. Partner engaged in conduct relating to the partnership business which makes it not reasonably practicable to carry on business in partnership with the partner
234
What happens upon dissociation?
1. The dissociating partner's right to participate in management ceases
2. Partnership is required to buy out the dissociated partner's interest
3. The partnership must indemnify the partners against all pre-dissociation debts/liabilities
235
For ____ years following dissociation without dissolution, the partnership is bound by an act of a dissociated only if:
Two
1. Act would have bound partnership prior to dissociation
2. 3rd party reasonably believed dissociated partner still partner AND
3. No notice/knowledge of dissociation
236
A person not a partner is deemed to have notice of the dissociation ________ after the statement of dissociation is filed
80 days
237
A dissociated partner is liable to the partnership for any damage caused to the partnership arising from ________________.
An obligation incurred by the dissociated partner after dissociation for which the partnership is liable
238
A partner who dissociates without dissolution is liable as a partner to the other party in a transaction entered into by the partnership within _______ after dissociation, but only if:
Two years
1. Act would have bound partnership prior to dissociation
2. Third party reasonably believed dissociated partner still partner AND
3. No notice/knowledge of dissociation
239
A person not a partner is deemed to have notice of dissociation ______ after the statement of dissociation is filed
90 days
240
What is the default rule regarding the dissolution of general partnerships?
Requires a partnership business to be wound up
241
A partnership at will is dissolved, and its business must be wound up, only if ___________
There is notification of partner's express will to withdraw
242
A partnership for definite term/particular undertaking is dissolved, and its business must be wound up, only if:
1. Partner's death, bankruptcy, or wrongful dissociation
2. Express will of all partners to wind up the partnership business OR
3. Expiration of the term/completing of the undertaking
243
An event agreed to in _________ will result in the winding up of the partnership business.
The partnership agreement
244
What is a court order on application of partner?
Judicial determination that:
1. Economic purpose frustrated
2. No longer reasonably practicable to continue business OR
3. Business cannot be continued in conformity with partnership agreement
245
On application by a transferee of a partner's transferable interest, a judicial determination that is equitable to wind up the partnership business.
If the partnership was for a definite term, when does the business wind up?
After expiration of the term/completing of the undertaking
246
On application by a transferee of a partner's transferable interest, a judicial determination that is equitable to wind up the partnership business.
If the partnership was at will, when does the business wind up?
At any time
247
What is the difference between dissolution and termination?
After dissolution, partnership continues for purposes of winding up its business
Termination is the actual end of the partnerhsip
248
At any time after dissolution - but before termination - of a partnership, partners may waive the right of winding up the business via unanimous vote. In that event:
1. Partnership resumes carrying on its business AND
2. Rights of third party may not be adversely affected
249
Who may participate in winding up the partnership's business after dissolution?
Any partners who have not wrongfully disociated
250
If all partners are dead, who may wind up a partnership's business after dissolution?
Legal representative of the last surviving partner
251
A partnership is bound by any post-dissolution act by a partner if that act:
1. Is appropriate for winding up the partnership business OR
2. Would have bound the partnership before dissolution AND 3rd party didn't have notice of dissolution
252
A person is deemed to have notice of dissolution ___________ after the filing of a Statement of Dissolution
90 days
253
After dissolution, a partner is liable to other partners for the partner's share of any partnership liability arising from ________.
partner's power to bind the partnership after dissolution, regardless of whether or not the act is related to winding up the partnership's business
254
What happens when a partner causes dissolution in contravention of the partnership agreement?
1. Partners who have not wrongfully caused the dissolution may continue the partnership business
2. Each partner who has not caused dissolution wrongfully may recover damages for breach of the partnership agreement
255
A wrongful partner cannot compel liquidation unless ________.
Partnership not continued by remaining partners
256
What is the winding-up of general partnership?
The period between dissolution and termination in which the remaining partners liquidate partnership assets to satisfy the partnership's debts and obligations
257
Partners do not recieve _______ for helping wind-up a partnership
Compenation
258
What is the priority of distribution after winding up a partnership?
1. Creditors
2. Partner accounts
259
All partnership assets are reduced to ______ during the winding-up of a partnership.
Cash
260
What creditors recieve distribution upon the winding-up of a partnership?
1. Outside 3rd party trade creditors AND
2. All partners' creditors
261
Upon winding up a partnership, the partnership shall make a distribution to a partner in an amount equal to any __________ over ________, but excluding from the calculation _____________.
Excess of the credits
Charges in the partner's account
Charges attributable to an obligation for which the partner is not personally liable
262
While winding up, if a partner fails to contribute the required amount to meeting partnership obligation, then ________.
All other partners must contribute (in proportions in which those partnerships share losses) the additional amount necessary to satisfy partnership obligations
263
A limited partnership is dissolved and its affairs shall be wound up upon the occurrence of any of the following:
1. At the time specified in the certificate of limited partnership
2. Upon the happening of events specified in writing in the partnership agreement
3. Written consent of all partners
4. Withdrawal of a partner
5. Judicial dissolution
264
Withdrawal of a partner will not cause the dissolution of a partnership if:
1. At least one other general partner & permitted by partnership
2. All partners consent in writing within 90 days
265
Upon the winding up of a limited partnership, the assets should be distributed as follows:
1. Creditors
2. Partners (and former partners) to satisfy liabilities for interim distributions and distributions due on withdrawal
3. Partners for the return of contributions
4. Partners, profits and property
266
Once a statement of qualification is filed/effective, the statute of a partnership as a limited liability partnership remains effective until _____________.
The partnership status is either cancelled/revoked
267
A partnership that dissolves but whose business is continued under a business continuation agreement will retain its status as a limited liability partnership without the need to ________.
Re-file a new statement of qualification
268
A statement of cancelation requires what vote?
Same vote as a statement of qualification
