Agency and Partnership

Agency and Partnership

Agency

1. Principal's Liability for Agent's Torts
a. assent, benefit, control, plus scope of agency
b. no vicarious liability for independent contractor's torts unless ultra-hazardous activity or estopped from denying liability
c. intentional torts generally outside scope of agency (but not for bouncers)

2. Principal's Liability for Agent's Contracts
a. actual express authority - oral, except land, revocable unless durable (explicit survival language).
b. implied authority - necessity, custom, or prior dealings.
c. apparent authority - P cloaks A, plus 3rd party relies.
d. ratification - P has knowledge of A's dealing, and accepts benefits.
e. authorized agents are not liable unless there is an undisclosed principal.

3. Duties Agent owes Principal
a. reasonable care
b. reasonable obedience
c. loyalty

Partnership

1. Formation
a. no formalities for general pship
b. association of 2 or more people, to carry on as co-owners of a business for profit.

2. Liabilities to 3rd Parties
a. general partners liable personally for pship obligations/debts.
b. estoppel - if you represent as partners, liable as if general partners
c. limited partners plus registered limited liability partners have limited liability.

3. Relationships Between Partners
a. Fiduciaries - file an action for accounting
b. Only a share of the profits (not control or pship assets) is liquid personal property of the partner
c. Absent an agreement, partners share equal control, receive no salary, receive equal profits, and share losses in the same way they share profits.

4. Dissolution
a. Dissolution: absent an agreement, the death or express will of a partner dissolves a pship
b. Priorities in payment:
Outside and inside creditors (must pay, even require partners to pay money into pship)
Capital contributions (must pay, even require partners to pay money into pship)
Profits (shared equally absent an agreement)
c. Distribution rule: Each partner must be repaid their loans and capital contributions, plus their share of the profits, but also minus their share of the losses.