Bar Exam 2025 > MEE: Agency & Partnerships > Flashcards

MEE: Agency & Partnerships Flashcards

(71 cards)

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1
Q

An agency relationship is created when

A

A: Both parties Assent to the agency relationship, B: the agent acts for the principal’s benefit, C: the agent’s actions are subject to the principals Control

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2
Q

partnership defintion

A

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

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3
Q

Test to ascertain partnership

A

whether there is a sharing of the profits from the business; if so, such an arrangement generally is presumed to be a partnership, and persons who share in the profits are partners.

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4
Q

Six instances when profit sharing doesn’t entail a partnership

A

Debt payments, Rent, Annuities / Retirement / Health benefits, Wages, Interest or loan charges, Goodwill payments (DRAWInG)

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5
Q

Transferrable Right

A

a partner may transfer the right to share in the profits and losses of the partnership and to receive distributions, but a transfer does not make the transferee a partner unless the other partners consent.

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6
Q

partnership property

A

if it is acquired in the name of the partnership. It is property of the partnership and not of the partners individually. A partner may use or possess partnership property only on behalf of the partnership.

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7
Q

How to withdraw from a partnership

A

A partner has the power to dissociate from the partnership at any time, even if the dissociation is wrongful, just needs to give general notice. It can be wrongful only if it is in violation of an express condtion.

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8
Q

partnership at will

A

open-ended partnership that does not have a fixed termination based on a period of time or particular undertaking (dissolved when a partner chooses to dissociate from the partnership by giving notice of his withdrawal)

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9
Q

Which duties remain after a partner dissociates?

A

The duty not to compete terminates at dissociation.

Duty of loyalty and duty of care also terminate upon dissasociation unless they are winding up the buisness.

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10
Q

What does agency address?

A

The legal consequences of one person (the agent) acting on behalf of, and subject to the control of, another person (the principal).

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11
Q

What are the three requirements to create an agency relationship?

A

Assent, Benefit, Control

Both parties must manifest assent to the agency relationship, the agent acts for the principal’s benefit, and the agent’s actions are subject to the principal’s control.

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12
Q

Who can be a principal in an agency relationship?

A

Almost any person or entity that has legal capacity.

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13
Q

What establishes a principal’s status?

A

A person’s intent to delegate an act and control the way in which another performs that act.

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14
Q

What defines an employer in an agency context?

A

A principal who hires an employee to perform services and controls how the employee performs.

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15
Q

What factors support an employer-employee relationship?

A

The principal exercises significant control over the worker’s activities, supplies tools, pays on a structured pay period, the worker’s skill is specialized, and directs the work to completion.

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16
Q

What is the difference between an employee and an independent contractor?

A

Employee: Subject to employer’s control
Independent Contractor: Not subject to the principal’s control.

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17
Q

What is required for the principal to have capacity in an agency relationship?

A

The principal must have the capacity to consent to enter both the relationship and the transaction.

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18
Q

Can minors be principals in an agency relationship?

A

No, minors and incompetents do not have the capacity to be principals, but they can be agents.

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19
Q

Is consideration required to create an agency relationship?

A

No, the parties may create an agency relationship without consideration.

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20
Q

What type of authority binds a principal to a contract entered into by an agent?

A

Actual authority, apparent authority, or estoppel.

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21
Q

What is express actual authority?

A

An express manifestation of a principal’s intent that causes the agent to reasonably believe they are acting as the principal wants.

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22
Q

What is implied actual authority?

A

What an agent reasonably believes to be necessary, usual, and proper to achieve the principal’s objectives.

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23
Q

What is apparent authority?

A

Words or conduct that cause a third party to reasonably believe that the agent has authority to act on the principal’s behalf.

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24
Q

What happens if an agent’s power is coupled with an interest?

A

Authority cannot be revoked.

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25
What are the requirements for ratification of an act by a principal?
The principal must ratify the entire act, have legal capacity, ratification must be timely, and the principal must have knowledge of material facts.
26
What is vicarious liability in the context of agency?
A principal is vicariously liable to a third party harmed by an agent who is an employee and was acting within the scope of employment.
27
What is required to establish an employer's vicarious liability?
The principal had sufficient control over the agent’s conduct and the employee’s harmful conduct was committed while working within the scope of employment.
28
What is the 'frolic and detour' concept in agency law?
A frolic is a personal errand involving a significant deviation from work, while a detour is a minor deviation.
29
Under what conditions is an employer directly liable to a third party?
If the principal authorized the agent’s conduct, was negligent in supervising, or delegated a nondelegable duty.
30
What determines an agent's liability in a contract?
Whether the principal was disclosed, partially disclosed, or undisclosed.
31
What are the principal's rights in an agency relationship?
Control the agent, duty to deal fairly, compensate, not interfere, indemnify.
32
What are the agent's key duties to the principal?
Duty of care, duty of obedience, duty to provide information, duty of loyalty.
33
What is the primary focus when tackling agency essays for exams?
Identify the agency relationship, determine termination, discuss liability of the principal, and address agent liability.
34
What is a partnership?
An association of two or more persons (or entities) to carry on a for-profit business as co-owners.
35
What is the intent requirement for forming a partnership?
At least two people or entities must intend to carry on a for-profit business as co-owners.
36
Is a written agreement required to form a partnership?
No, a written agreement is not required, but a contract that cannot be performed in one year must be in writing per the Statute of Frauds.
37
What is the presumption of partnership based on profit sharing?
If there is a sharing of profits from a business, then the arrangement is presumed to be a partnership except in six enumerated circumstances.
38
List the six circumstances that do not create a partnership presumption.
* Debt payments * Rent * Annuities or other retirement or health benefits * Wages or other compensation * INterest or loan charges * Goodwill payments from the sale of a business.
39
What governs partnership business if there is a written partnership agreement?
The written partnership agreement will govern partnership business.
40
What is a purported partner or partner by estoppel?
A person treated as a partner despite not being a real partner if there is a representation that they are a partner, and a third party reasonably relies on that representation.
41
What fiduciary duties does a partner owe to the partnership?
A partner owes the duties of loyalty and care and has an obligation of good faith and fair dealing.
42
What must a partner refrain from under the duty of loyalty?
* Competing with partnership business * Advancing an interest adverse to the partnership * Usurping a partnership opportunity.
43
What must a partner refrain from under the duty of care?
* Grossly negligent or reckless conduct * Intentional misconduct * Knowingly violating the law.
44
If there is no partnership agreement, how are profits and losses shared?
Each partner is entitled to an equal share of the profits and losses.
45
What is a partner's partnership interest?
A partner's rights to share in the profits and losses and to receive distributions.
46
What happens to partnership property acquired by the partnership?
All property acquired belongs to the partnership, not the individual partners.
47
What is the minimum approval required for ordinary partnership decisions?
A majority of partners.
48
What triggers dissociation of a partner?
* Notice of withdrawal * Expulsion due to the partnership agreement * Bankruptcy * Death * Appointment of a guardian * Judicial determination of incapacity.
49
What is wrongful dissociation?
When a partner dissociates in violation of the partnership agreement or before the term or undertaking ends.
50
What is the difference between dissociation and dissolution?
Dissociation is when a partner leaves the partnership; dissolution begins the termination of the partnership itself.
51
What is the effect of a partner's wrongful dissociation?
It triggers dissolution of the partnership.
52
What must be done during winding up a partnership?
Dispose of and transfer partnership property to discharge liabilities and settle accounts.
53
What is a limited liability partnership (LLP)?
A partnership where a partner is not personally liable for LLP obligations but is liable for her own misconduct.
54
What is required to form a limited partnership (LP)?
A certificate of limited partnership must be filed with the state.
55
What rights does a limited partner have in an LP?
* Vote as permitted under the partnership agreement * Inspect the LP’s business and financial records.
56
What happens if a limited liability partnership's status is revoked?
It transforms into a simple partnership but does not trigger dissolution.
57
What is the liability of a general partner in a limited partnership?
A general partner is personally liable for the LP's obligations.
58
What distinguishes the formation of a general partnership from a limited partnership?
A general partnership can be formed without a written agreement; a limited partnership requires filing a certificate with the state.
59
What is the minimum approval required for amendments to the partnership agreement?
All partners.
60
Fill in the blank: A partner is ______ for all partnership obligations that arise after joining the partnership.
jointly and severally liable
61
What is a limited partner's liability condition?
A limited partner is not liable unless she participates in the control of the business and a third party reasonably believes that she is a general partner based on conduct or also serves as a general partner.
62
Who is personally liable for LP obligations?
A general partner is personally liable for LP obligations.
63
Why might a general partner be a corporation?
A general partner is often a corporation to provide a shield from liability.
64
What happens to a partnership at-will when a partner dissociates?
The partnership dissolves when any partner dissociates.
65
How does a specific term or undertaking partnership dissolve?
It dissolves by its terms, with unanimous consent, or after a partner dissociates if at least half of the remaining partners consent.
66
What are the conditions under which any partner may dissolve a partnership?
Any partner may dissolve per the partnership agreement, due to an event making it unlawful for the partnership business to continue, or by judicial determination.
67
What is the status of a partnership until winding up is complete?
The partnership continues until winding up is complete.
68
Who may perform the windup of a partnership?
A partner who has not wrongfully dissociated may perform the windup.
69
What happens if the state's qualification of LLP status is revoked?
Revocation of the state’s qualification of LLP status transforms the LLP into a simple partnership.
70
Under what conditions may a limited partnership dissolve?
Dissolution may occur per the partnership agreement, by unanimous written consent, after withdrawal of the only general partner, or by judicial decree.
71
Who may perform the windup in a limited partnership?
General partners who have not wrongfully dissolved the partnership may perform the windup.

Bar Exam 2025 (11 decks)

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