busorg outline

busorg outline - Business Organizations I Outline There are...

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Business Organizations I Outline There are 4 Types of Business Organizations Structures: 1) Agency—What rules govern when the business hires another to act on his behalf? 2) Partnerships—What happens when people go into business together? 3) Corporations—Differences between corporations and partnerships 4) LLCs—Hybrid of Partnerships and Corporations I. Agency A. Agency- a fiduciary relationship that results from these elements: a. Manifestation of consent by one person P (principal) to another person A (agent) that the other acts on the P’s behalf and subject to the P’s control. b. The other’s (A) consent to so act Gorton v. Doty Here there was a manifestation of consent by Doty. By directing how the car will be used she was exercising control as a P. The Court emphasizes the exclusion of the loan— no compensation for the loan. If she didn’t want to be liable then receive some compensation and make clear that it is a loan. A. Gay Jenson Farms v. Cargill, Inc. -->Court focused on the control factor here: (1) Cargill’s constant recommendations to Warren by the telephone, (2) right of first refusal on grain is a creditor relationship, (3) Warren’s inability to enter into mortgages, to purchase stock or to pay dividends (micro- managing Warren), (4) Cargill’s right of entry onto Warren’s premises to carry on periodic, (5) correspondence and criticism about salaries (controlling and getting into how they operate business), (6) Cargill’s determination about “strong paternal guidance” B. Liability of Principal in Contracts There are 5 different types of authority an A can have : 1) Express Authority - P tells A to do X. A does X. P is bound. a. P communicates to A. Wheaties is bound to Beckham because told A to get Beckham. As long as P gives A express authority then P is bound even is TP doesn’t know 2) Implied Authority - P tells A to do X. A does Y in the course of doing X. P is bound by Y still. a. P communicates to A (attendant power). P can’t always think of everything A may be able to do to accomplish X. ex: costs incurred with the meeting of Beckham. b. Can Wheaties restrict the actions of his A? Yes, but if trying to restrict A’s ordinary actions then P has to be very clear about it ( expressly restrict what the A is allowed to do. )
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c. Mill Street Church of Christ v. Hogan FACTS: Employee’s brother falls off ladder on church business. Issue is whether brother had authority to hire him and if so then he is the employee of the church as well and entitled to workers’ comp. Sam was an employee of the Church and Hogan possessed implied authority to hire Sam. Implied authority is actual authority circumstantially proven which the principal actually intended or would have intended if P thought ahead of time the agent to possess and includes such powers as are practically necessary to carry out the duties actually delegated. 3) Apparent Authority
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busorg outline - Business Organizations I Outline There are...

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