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Agency & PS Flashcards

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1
Q

3 components of Agency

A

ABC

Assent by both

Benefit of P

Control by P

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2
Q

Entitles that can be Principals

A

Employer
LLC
LLP

Unincorproated cannot be P bc no legal capacity

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3
Q

Characteristics of IC

A

Maintain high level of independence

Free to work for other ppl

Fixed fee

Owns own tools

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4
Q

Termination of Agency

A

Either party can terminate it unilaterally

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5
Q

Common Agency fact pattern

A
  1. Arguable formation of agency
  2. Agent will do work on behalf of P
  3. P will get sued by TP
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6
Q

Agency - 4 types of legal authority to K

A
  1. Actual express authority
  2. Actual implied authority
  3. Apparent authority
  4. Ratification
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7
Q

Diff btw actual and apparent

A

Actual : P —> Agent

Apparent: P —> TP re agency

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8
Q

Actual express authority

A

Communication btw A + P—written or oral

Intent: A believed he is doing with P wants. Belief needs to be objectively reasonable

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9
Q

Termination by death— actual express authority

A

P dies—termination when A has actual knowledge of P’s death

A does — immediately terminates

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10
Q

Actual Implied Authority

A

Communication btw P+ A

P creates authority by using words or conduct to convey authority to A to do whatever is necessary to achieve goal

A can act within accepted business custom or trade usage

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11
Q

Apparent Authority

A

Communication btw P + TP

P communicated with TP that caused TP to reasonably believe P consents to acts done on his behalf

Reasonable? Look to their prior business dealings

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12
Q

Revocation of Apparent Authority

A

P needs to tell TP no more authority

Until revoked, apparent authority exists

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13
Q

Ratification by P

A

After the fact action

  1. P has knowledge of material terms of K
  2. P accepts the K’s benefit

Upon ratification —> P is L for the K

Can Ratify to either A or TP after the fact

NOTE: both A and P can be L

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14
Q

3 types of principles

A

Disclosed

Partially disclosed

Undisclosed

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15
Q

Disclosed P

A

Parties to K — P + TP

TP knows:
1. A is acting on behalf of the P
2. P’s identity

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16
Q

Partially Disclosed P

A

Parties to K — P + TP + A

TP knows A is working for P, but doesn’t know P’s identity

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17
Q

Undisclosed P

A

Parties to K — TP + A

TP does NOT know:
1. A is working on behalf of P
2. P’s identity

A will be L

Whether undisclosed P is also a party depends if A had authority to bind P to K

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18
Q

Agency Torts v K

A

Torts - vicarious L

K — actual, apparent, ratification

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19
Q

Vicarious L of P

A

Only for employees. Not IC

More control, more L

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20
Q

When is a P L for IC ?

A

Nondelegable duties

  1. Inherently dangerous tasks
  2. P neg in hiring IC
  3. P retains control over certain tasks, and tort occurs during that task
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21
Q

Determine scope of employment for VL

A

Did A intent to benefit P?

Was A’s conduct the kind that A was hired to perform?

Did the tort occur on the job?

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22
Q

Frolic

A

Significant deviation — outside scope of employment

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23
Q

Detour

A

Minor deviation — tort w/in scope of employment

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24
Q

Is P VL for intentional torts of A?

A

Generally No

Unless:
- conduct occurred w/in general space and time of employment
- A was motivated in some part to benefit P
- act was kind that A was hired to perform

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25
Fiduciary Duties of Agency
Agents owe all Ps 3 duties: Duty to exercise reasonable care Duty to obey reasonable instructions Duty of loyalty
26
Duty of Loyalty — Agency
1. Cannot usurp business opp 2. A cannot take secret profit 3. A cannot compete in competing business
27
PS — Definitok
Two or more ppl Carry on a for profit business As co owners Share profit Share control
28
Do you need SI to form PS?
No, just need to meet elements: co owners and share profit
29
Presumption of Sharing Profits
Presumption that there is a PS DOES NOT APPLY: - paying debt - rent - wages
30
PS Liability
Each partner is personally L for the debts and obligations of the PS
31
PS Taxation
No entry level taxation — passes through
32
PS AGREEMENT
PS K is law of PA Don’t need one, but if you have one, then it will govern + trump state law (unless state law is mandatory) Mandatory state law: - liabliy to TP - cannot deny right to access books - fiduciary duties
33
Fiduciary Duties - PS
Every partner is a fiduciary of PS + owes the below duties Duty of loyalty Duty of care
34
Duty of Loyalty — PS
- cannot compete w PS business - advance an interest adverse to PS - usurp PS opp Cannot eliminate it; but PS can limit it, as long as not unreasonable
35
Safe harbor - duty of loyalty
Worried something might be disloyal? Partner makes full disclosure of all material facts —> partners can vote to ratify
36
Duty of Care — PS
Partners must not engage in: 1. Grossly negligent or reckless conduct 2. Intentional misconduct 3. Knowing violation of law PS CANNOT REDUCE DOC
37
Can duties of a PS be modified?
DOL yes DOC no
38
Who owed duties to a PS
Duties apply to current partners only Not prospective or former
39
Division of profits and losses
Can have a K for division; Division of both doesn’t have to be the same Capital doesn’t have affect on division When no PS K, divide profits evenly, losses follow
40
Distributions
GR: partner do not have right to demand distribution They can agree in advance to allow distributions to be made according to PS agreement
41
Transfer of PS Interest
GR: partner has right to transfer their PS interest This will not dissolve the PS, but partners may require to change default rule to require majority vote
42
New Partner in PS
when new partner is introduced --> all existing partners need to consent can have a PS committee to vote instead of all
43
Managing PS
GR: every partner has equal rights in the *management* and *control* of the PS this can be changed in the PS K Common division is to reflect the partners' capital contributions instead of an even share
44
Ordinary Business – PS
ordinary business --> majority vote ie, declaring contribution
45
Extraordinary Business – PS
extraordinary business --> Unanimous vote ie, amending PS agreement
46
Quroum
No GR for quorum for PS
47
Access to Records
All partners (and their agents) must be provided with access to records/books This is MANDATORY –– cannot be modified in PS K
48
Dissociation – PS
Partner leaves PS Voluntary Dissociation – partner can give notice to PS that they want to withdraw Involuntary Dissociaiton – can happen if: - event triggered in PS k - expelled - unlawful for PS to do business w/ that partner - court order - partner goes bankrupt - partner becomes incapacitated or dies
49
Can a PS prevent a partner from withdrawing?
No, but can provide restirctiosn ie, written notice, L for wrongful dissociation
50
Consequences of Dissociation
Dissociation ≠ Dissolved Former partner has no right to manage + no more duties to PS If PS continues, it must *buyout* former partn's interests
51
Agency of PS
all partners are an agent to the PS Express Authoity – PS K, statement of authoirt filing, or ad hoc authorization Implied Authority – exists based on reasonable belief action is necessary Apparent Authority – PS may be bound due to parnet acting in ordinary course of business –– Based on PS interactions with TP
52
Tort L – PS
PS is L for tort committed by partners acting w/in scope of PS
53
Incoming Partner L for PS obligation?
No
54
Former parner L for PS obligations?
Possible to be personally L that occured post dissociation
55
2 steps to terminating PS
1. dissolution 2. winding up
56
Dissolution – Types of triggers
1. PS at Will 2. PS for a Term or Undertaking 3. Any dissolving event set in PS K 4. Any event that makes it unlawful to continue if not cured w/in 90 days 5. Judicial determination
57
Who winds up PS?
any partner not wrongfully dissociated; legal rep of the last surviving partner; any partner, legal rep, or transferee may seek judicial supervision of wining up
58
Power of Person Winding Up PS
1. dispose and transfer of PS property 2. discharge PS liabliites 3. preserve PS business to maximize value
59
Statement of Dissloution
filing that gives notice to TP that the PS has been dissolved after 90 days why file? limits apparent authority and liability
60
Prioroity of distributions
1. creditors 2. partnes
61
LLP
PS, in which each partners' personal L is eliminated Name must always end with RLLP or LLP **MUST file with state
62
LLP – Formation
1. must file with state 2. to transform from GP to LLP, need vote authorizing transformation - if PS K is silent, then need unanimous vote
63
LLP – termination
partners can volunatrily cancel LLP status State can revoke LLP status
64
LP
Have GP who deals with managing and LP who is passive GP – personally L LP – limited L
65
LP – formation
file certificate of LP, must contain: 1. name of LP + LP in the title 2. in state address 3. name of agent in state 4. name and addresses of all GP 5. statement of duration 6. signed by the GP Comes into existence when filed––effective if there is *substantial compliance* with the requirements
66
Limited Partner – LP
1. can join at inception of LP or w/ unanimous consent of partners 2. GR: LP does not vote––can modify in LP K 3. has right to records 4. L to TP: limited, unless starts having more active role in PS 5. LP can (without considered "managing"): - be an officer/director/SH of the GP - consult GP on PS affairs - act as a surety of PS - request to attend meetings - wind up PS - propeose/approve PS matters 6. Withdrawl – <6 month written notice
67
General P – LP
1. join at inception or unanimous consent 2. Same rights/powers as GPS 3. Personall L to TP --> to go around this, GP can be a corporations 4. can voluntarily withdraw 5. might be removed if transfer interest 6. if becomes bankrupt or insolvent can be removed
68
Duty to Account –PS
duty to account for any progir and hold any profits as a trustee for PS

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