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UBE > Agency & PS > Flashcards

Agency & PS Flashcards

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
Q

Fiduciary Duties of Agency

A

Agents owe all Ps 3 duties:

Duty to exercise reasonable care

Duty to obey reasonable instructions

Duty of loyalty

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26
Q

Duty of Loyalty — Agency

A
  1. Cannot usurp business opp
  2. A cannot take secret profit
  3. A cannot compete in competing business
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27
Q

PS — Definitok

A

Two or more ppl
Carry on a for profit business
As co owners

Share profit
Share control

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28
Q

Do you need SI to form PS?

A

No, just need to meet elements: co owners and share profit

29
Q

Presumption of Sharing Profits

A

Presumption that there is a PS

DOES NOT APPLY:
- paying debt
- rent
- wages

30
Q

PS Liability

A

Each partner is personally L for the debts and obligations of the PS

31
Q

PS Taxation

A

No entry level taxation — passes through

32
Q

PS AGREEMENT

A

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
Q

Fiduciary Duties - PS

A

Every partner is a fiduciary of PS + owes the below duties

Duty of loyalty

Duty of care

34
Q

Duty of Loyalty — PS

A
  • 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
Q

Safe harbor - duty of loyalty

A

Worried something might be disloyal?

Partner makes full disclosure of all material facts —> partners can vote to ratify

36
Q

Duty of Care — PS

A

Partners must not engage in:
1. Grossly negligent or reckless conduct
2. Intentional misconduct
3. Knowing violation of law

PS CANNOT REDUCE DOC

37
Q

Can duties of a PS be modified?

A

DOL yes

DOC no

38
Q

Who owed duties to a PS

A

Duties apply to current partners only

Not prospective or former

39
Q

Division of profits and losses

A

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
Q

Distributions

A

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
Q

Transfer of PS Interest

A

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
Q

New Partner in PS

A

when new partner is introduced –> all existing partners need to consent

can have a PS committee to vote instead of all

43
Q

Managing PS

A

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
Q

Ordinary Business – PS

A

ordinary business –> majority vote

ie, declaring contribution

45
Q

Extraordinary Business – PS

A

extraordinary business –> Unanimous vote

ie, amending PS agreement

46
Q

Quroum

A

No GR for quorum for PS

47
Q

Access to Records

A

All partners (and their agents) must be provided with access to records/books

This is MANDATORY –– cannot be modified in PS K

48
Q

Dissociation –PS

A

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
Q

Can a PS prevent a partner from withdrawing?

A

No, but can provide restirctiosn

ie, written notice, L for wrongful dissociation

50
Q

Consequences of Dissociation

A

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
Q

Agency of PS

A

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
Q

Tort L – PS

A

PS is L for tort committed by partners acting w/in scope of PS

53
Q

Incoming Partner L for PS obligation?

A

No

54
Q

Former parner L for PS obligations?

A

Possible to be personally L that occured post dissociation

55
Q

2 steps to terminating PS

A
  1. dissolution
  2. winding up
56
Q

Dissolution – Types of triggers

A
  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
Q

Who winds up PS?

A

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
Q

Power of Person Winding Up PS

A
  1. dispose and transfer of PS property
  2. discharge PS liabliites
  3. preserve PS business to maximize value
59
Q

Statement of Dissloution

A

filing that gives notice to TP that the PS has been dissolved after 90 days

why file? limits apparent authority and liability

60
Q

Prioroity of distributions

A
  1. creditors
  2. partnes
61
Q

LLP

A

PS, in which each partners’ personal L is eliminated

Name must always end with RLLP or LLP

**MUST file with state

62
Q

LLP – Formation

A
  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
Q

LLP – termination

A

partners can volunatrily cancel LLP status

State can revoke LLP status

64
Q

LP

A

Have GP who deals with managing and LP who is passive

GP – personally L
LP – limited L

65
Q

LP – formation

A

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
Q

Limited Partner – LP

A
  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
Q

General P – LP

A
  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
Q

Duty to Account –PS

A

duty to account for any progir and hold any profits as a trustee for PS

UBE (14 decks)

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