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Unformatted text preview: Principal/agent Relationships and Partnerships Chapter 8 Creation of Agency Relationship Definition of agent / principal
Types of agents General
Special Duties of agent to principal Independent contractor Fiduciary Duties of P to A Liabilities of the Principal for Acts Liabilities of the Principal for Acts of the Agent Torts Liability for torts Basic tort law Two Basic Questions
Two Basic Questions 1. Is employee an independent contractor or an employee? A. If independent contractor – no principle liability. End of analysis.
B. If employee – liability Respondeat Superior 2. Did the accident occur within the course and scope of employment? Lange case
Frolic or detour?
Coming and going to work rule Liabilities of the Principal for Acts Liabilities of the Principal for Acts of the Agent Contracts Liability for contracts made by agent Scope of authority Actual (express or implied)
Disclosed or undisclosed agency
Apparent authority Ratification Other Agency Issues
Other Agency Issues Termination of agency Right to terminate
Power to terminate Partnerships
Partnerships First, a word about sole proprietorships Partnership definition: “An association of two or more persons, As coowners, To carry on a business for profit.” Partnerships
Easy to formbut personal liability Entity is not taxed Articles of partnershipa very good idea, although not legally required Tests for existence Has there been a sharing of profits and losses?
Has there been a sharing of management and control? Relations and Liabilities Among Relations and Liabilities Among Partners Entity and aggregate theories
Fiduciary relationship Right to accounting Partners’ liabilities
Partners’ liabilities Personal liability – for partnership debt
Torts – Basic agency principles Partnership (principal) liable for torts partners (agents) commit while “carrying on in usual way the business of the partnership.” Contracts – Basic agency principles Partners have implied authority to sign contracts which are “carrying on in the usual way the business of the partnership.” Other Issues
Other Issues Partnership “property” Partnership “interest” Owned by partnership
No individual rights Percentage of ownership of entire partnership
Can be inherited or assigned Termination of partnerships Dissolutioncauses of
“Winding up” phase Limited Partnerships and Limited Partnerships and LLPs Limited partnerships Limited liability partnerships (LLPs) How are they different from gen. Partnerships?
All partners can share in management
Liability limited to their investment, except for their own torts LLLPs
Study Aid – p. 280 ...
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- Fall '11