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51 Cards in this Set
- Front
- Back
Agency Problems (3)
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1. Liability of Principal to 3Ps for Torts of an Agent;
2. Liability of Principal to 3P for Contracts entered into by Agent; 3. Duties which Agents owe to Principals |
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Test for Liability of P to 3P for tort of A
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1. Does a Principal Agent relationship exist?;
2. Was the tort within the scope of the relationship? |
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Principal-Agent Relationship, definition
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assent (of both), benefit (to P), control (of P)
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Assent, definition
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= informal agreement b/w P and A
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Benefit, definition
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= A's conduct is for P's benefit
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Control, definition
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= P must have the right to control A by having the power to supervise the manner of A's performance.
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Does a P have vicarious liability for sub-agents and borrowed agents?
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Generally, no.
Sub-agents: usually a helper to A; there is NO ASSENT b/w P and SA. Borrowed agents: P has NO right to CONTROL BA |
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What are Independent Contractors and do P's have Vicarious Liability (VL)?
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IC ∉ Agent b/c no power to supervice manner of performance.
NO VL, BUT there are 2 exceptions: 1. Ultra-Hazardous Activity 2. Estoppel (holding out IC as A) |
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Scope of Relationship Factors
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1. "Of the kind" of job (no IT);
2. "on the job" (detour v. frolic); 3. A intended to benefit P (even in part). |
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Scope, Frolic v. Detour
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Frolic = new & ind. journey;
Detour = mere departure from assigned task |
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Agency and Intentional Torts
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IT are usu w/o scope.
EXCEPTIONS, (EG, bouncer) where conduct was: 1. authorized; 2. natural (to job); 3. motivated by desire to serve P. |
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Liability of P to 3P for Ks entered into by A, test
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P is liable for Ks entered into by it’s A if P authorized A to enter into the K
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Liability of P to 3P for Ks entered into by A, starting an essay
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"P will be liably only on its authorized Ks. In this case…" "Therefore, there will be [no] liability on this authorized K."
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Liability of P to 3P for Ks entered into by A, general rules
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If no authority → P not liable on K; A is.
If authority → P is liable on K; not A. EXCEPTION: if P is partially disclosed (only P’s ID is concealed) or undisclosed (fact o P concealed), Authorized A may be liable at the election of 3P. |
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Kinds of Authority (4)
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- Actual Express;
- Actual Implied; - Apparent; - Ratification |
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Actual Express
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Oral (except land > 1yr), private, narrowly construed.
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How can Actual Express authority be revoked?
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1. Unilateral act of either party, or;
2. Death or of P; 3. Incapacity of P, UNLESS P gives A a “durable power of attorney” (written expression of authority to enter into transaction) |
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Actual Implied
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= no words; A reasonably believes P has given authority b/c of necessity, custom or prior dealings
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Actual Implied, Necessity
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There is an implied authority to do all tasks which are necessary to accomplish an expressly authorized task.
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Actual Implied, Custom
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There is an implied authority to do all tasks which are customarily performed by a person w/ A's title or position.
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Actual Implied, Prior Dealings
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There is an implied authority to do all tasks which A believes to be authorized to do from prior acquiesance from P (during prior dealings)
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Apparent
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1. P cloaked A in appearance of authority; and
2. 3P relied on that appearance of authority. |
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Apparent, Secret Limiting Instruction
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where A has actual authority but P has limited it, if 3P unknowingly relies on A, P is liable though A's actions were outside the scope.
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Apparent, Lingering Authority
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where actual authority has been terminated but A continues to act on P’s behalf. P is liable until/unless P notifies 3Ps
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Ratification
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Authority can be granted after the K has been entered if:
1. P has knowledge of all material fact regarding the K, AND 2. P accepts it's benefits. NY DISTINCTION: ratification cannot alter terms of K; must be complete. |
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Duties which Agents owe to Principals (3)
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Duty to:
1. exercise reasonable care; 2. obey reasonable instructions (∉ lie or break law); 3. loyalty. |
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How can an Agent breach his duty of loyalty? (3)
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1. Self-Dealing: A cannot receive a benefit to the detriment of P;
2. Usurping P’s opportunity; OR 3. Secret profits. |
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What are the issue areas of partnerships?
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1. Partnership Formation;
2. Liabilities (of partners to 3P; b/w partners); 3. Partnership dissolution |
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General Partnership, definition.
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= association of 2+ persons who are carrying-on as co-owners of a biz for profit.
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General Partnership, prima facie evidence of
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the contribution of money or services in return for a share of profits is prima facie evidence of a general partnership in NY.
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General Partnership, formation
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none
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General Partnership, starting an essay
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"As a rule, general partners are liable for all partnership obligations including co-partner torts. In this case…"
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General Partners, liability
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Partners are agents of the partnership for carrying on usual partnership business; thus each individual general partner is personally liable for all obligations of the partnership.
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Incoming Gen Partners, liability
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NOT liable for prior debt (usu),
BUT any money paid into the partnership by the new partners can be used to satisfy those prior debts. |
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Outgoing Gen Partners, liability
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YES, retain liability on future debts until the die,
UNLESS, notice of their withdrawal has been given to all known and even potential creditors. |
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General Partners, liability by estoppel
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one who represents to a 3P that a partnership exists will be liable as if a partnership does exist.
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A partnership is bound by the following done by partners
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- Ks , w/ authority;
- Torts, w/in scope of job |
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Limited Partnership, definition.
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= 1 general partner + 1 limited partner
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Limited Partnership, formation
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File limited partnership that includes names of all general partners
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Limited Partnership, general partner
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Liability + control; liable for all limited partnership obligations but also have right to manage a business
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Limited Partnership, limited partner
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Limited liability; only liable for their own contributions. NY: may not manage the business or forfeit LP status
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Registered Limited Liability Partnership, Formation
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Register w/ state as RLLP and indicate which profession you will be practicing
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Registered Limited Liability Partnership, Liability
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No partner is liable for the partnership’s debts and obligations
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Limited Liability Company, Formation
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File articles of organization w/ State. NY: publish summary of articles once/week for 6 weeks in a row in 2 newspapers
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Limited Liability Company, Liability
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Members who are owners are not liable for debts and obligations of the company;
Limited Liability, Tax, Liquidity, Life (events of dissolution) |
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Partner Inter-relationship?
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Partners are fiduciaries of each other and the partnership (duty of loyalty w/ pertinent remedies)
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Partner's Share in Profits
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Share of profits and surpus is transferrable. No salary, but are compensated for winding up biz.
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Partner's Share in Profits, absent a contract
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Profits shared equally; AND Losses shared like profits
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Partner's Share in Specific Partnership Assets
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Equipment, land, leases owned (bought) by partnership are not transferrable via partner to 3P w/o partnership authority.
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Partner's Share in Management
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Right to vote is not transferable via partner to 3P;
1 partner = 1 vote (no matter the contribution) |
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Priority of distribution
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All debts must be repaid, but in this order:
1. Outside Trade Creditors; 2. Inside Partner loans; 3. Capital Contributions. NOTE: Losses and profits shared equally by partners |