Bierschbach F05 CorpBierOutline1

Bierschbach F05 CorpBierOutline1 - www.swapnotes.com...

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www.swapnotes.com Corporations - Outline Fall 2005 Professor Bierschbach Page 1 of 27 – by AG CorpBierOutline1.pdf Corporations Outline Default rules: 1. Formal creation- filing articles of incorporation, specified procedures. 2. Shareholders- part owner of the corp don’t participate in the everyday management of the company. 3. Separation of ownership and control- owners have ltd decisionmaking power. Control is vested in the board. o This separation is strongest in public corp, breaks down in closely held corps. 4. Free transferability of shares- easy to sell shares, don’t need permission like in a partnership. 5. Indefinite duration- the business survives changes in ownership, whereas partnerships don’t. 6. Limited liability- shareholders aren’t personally resp for the debts of the corp. 7. Corps are separate legal entities- they can be sued as a corp and take action in their own name. Agency Law: 1. Liability in Contract: when is a principal bound by a contract entered into by an agent? The legal test to show agency is a manifestation of consent, that comes in various forms or scopes. Existence of agency is a question of fact. Express authority Implied authority : a principal is bound when there is implied authority, which turns on the agent’s reasonable belief of authority based on: o Past conduct or o custom and o The nature of the task or relationship at hand. o Mill Street Church v. Hogan : church was resp for compensating painter’s brother whom he hired on his on account, bc they found painter had implied authority to hire him, and therefore bound them to the k. Apparent authority : turns on the belief of the third party . The belief has to be created by conduct or words or if the agent is acting in a way that is usual or proper to their position. Third party has to know there is a principal and indicia of authority, and therefore an agency relationship to begin with!! o 370 Leasing v. Ampex : Joyce (3 rd party) dealt with Kaye who was an agent for Ampex and reasonably believed that K had the authority to bind the principal in a sale bc Kaye was a saleswoman. Inherent authority : catchall. It binds the principal when it related to actions that the agent is generally authorized to conduct and the third party reasonably believes so, and has no notice to the contrary, and is harmed this is for the plaintiff’s protection. – equitable considerations.
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www.swapnotes.com Corporations - Outline Fall 2005 Professor Bierschbach Page 2 of 27 – by AG CorpBierOutline1.pdf o Watteau v. Fenwick: H operated bar with his name on the door etc. . but secretly owned by D. H wasn’t allowed to buy from P but did and refused to pay. Ct found that D was bound bc H’s actions were within the usual scope of his authority, and it wouldn’t otherwise fall under the other three theories. In analyzing agency question: analyze in order, if none fits and the outcome
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Bierschbach F05 CorpBierOutline1 - www.swapnotes.com...

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