Term
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Definition
| Based on vicarious liability, means the principal is liable because of his contract with the negligent agent |
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Term
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Definition
When an agent runs personal errands while on the business of the principal
Agents are liable for tortious conduct while on substantial frolic and detour, principal if minor |
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Term
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Definition
| Principals are not liable for injuries caused by agents and employees while on their way to or from work |
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Term
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Definition
when the agent performs for the principal while on her own personal business
both agent and principal are liable |
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Term
Motivation Test
(intentional torts) |
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Definition
The agent is liable for intentional torts committed within her scope of employment IF her motivation is personal
If her motivation is to promote the principal's business, the principal is liable |
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Term
Work-related test
(intentional torts) |
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Definition
| If the agent commits an intentional tort within a work-related time or space, the principal is liable regardless of the agent's motivation |
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Term
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Definition
Was the act requested or authorized by the principal?
Was it the kind of act the agent was employed to do?
Did act occur within time period of employment?
Did act occur at place of employment?
Was agent advancing the principal's purpose?
Did act occur at place of employment? |
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Term
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Definition
| Principal is liable for both intentional and innocent misrepresentation on the part of the agent |
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Term
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Definition
Principal is liable for contracts formed with a third party by the agent, if the principal authorized the contract
3rd party may rescind or affirm and recover damages |
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Term
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Definition
Easy
Cheap
One person (owner) makes all decisions
Owner gets profits
Ownership easily sold
Capital: personal funds and loans
Owner legally responsible |
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Term
| Personal Liability of Sole Proprietors |
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Definition
Owner loses all personal capital invested in the business
Unlimited personal liability: creditors may recover claims against the business |
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Term
| Taxation of Sole Proprietorship |
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Definition
No taxes at business level
Profits(losses) reported on personal income of owner |
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Term
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Definition
| Partners are liable for the debts and obligations of the partnership |
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Term
| Requirements of a general partnership |
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Definition
2+ people
carrying on a business
as co-owners (determined by sharing management responsibility and profits, losses)
for profit |
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Term
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Definition
| Written agreement, required if partnership longer than 1 year, or authorized to deal in real estate |
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Term
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Definition
Through individual partner's personal income tax returns
this is called "flow-through" taxation |
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Term
| Rights of General Partners |
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Definition
Right to participate in management
share in profits
do not receive salary unless agreed to
entitled to indemnification for travel, etc expenses if incurred in the ordinary and proper conduct of the business
if making a loan to the partnership, partners may receive interest payments and repayment/recover capital, subordinate to non-partner creditors |
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Term
Right to Information
(partnerships) |
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Definition
Partners have a right to demand and receive info about all things affecting the partnership
Books must be kept at principal place of business |
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Term
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Definition
| general partners invest capital, manage the business, and are liable for partnership debts |
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Term
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Definition
| DEGREE OF CONTROL: if the principal asserts little control, the person is an independent contractor. |
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Term
| Factors determining Independent Contractors |
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Definition
who controls the manner and means of accomplishing the desired results
distinct occupation vs independently established business
length of time and amount of time agent works for principal
paid by the hour or by the job
degree of skill necessary |
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Term
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Definition
| Agent's authority to act on the principal's behalf is expressly stated in the agency agreement. May be oral or written unless required to be written by Statute of Frauds |
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Term
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Definition
| The agency is implied from the conduct of the parties |
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Term
Incidental Authority
(types of agency) |
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Definition
| Express agents have incidental authority in emergency situations to take reasonably necessary actions to protect the principal's property and rights |
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Term
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Definition
agency that arises when the principal creates the appearance of an agency that does not actually exist
principal is then estopped from denying the agency relationship |
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Term
| How to terminate an agency |
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Definition
Mutual agreement
Lapse of time
Purpose achieved
Occurrence of a specified event
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by law:
-death
-insanity
-bankruptcy
-changed circumstances (an unusual change that would lead the agent to believe the original instructions should not longer be valid)
-war
+termination by impossibility |
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Term
| revocation vs renunciation of authority |
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Definition
revocation of authority is when a principal terminates an agency contract
renunciation of authority is when an agent terminates an agency |
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Term
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Definition
Duty to compensate agreed upon or reasonable/customary amount
Duty to reimburse and indemnify for any expenses and losses the agent incurs while within the scope of the agency
Duty to cooperate |
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Term
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Definition
duty to perform in the contracted duties and meet the standards of reasonable care, skill and diligence
Duty to notify of info found that is important to the principal
Duty to account - keep records of all money and property received and expended in the course of the agency |
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Term
| Fully disclosed principals |
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Definition
when the third party knows the agent is acting on behalf of and principal and knows the identity of the principal
Principal is liable, agent is not |
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Term
| Partially disclosed agency |
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Definition
If the third party knows the agent represents the principal but does not know who the principal is
Agent and principal are liable
but agent may sue the principal for indemnification |
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Term
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Definition
| Third party does not know the agent is not acting on his behalf but on the behalf of the principal |
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Term
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Definition
Requires a limited partnership to have at least one general partner and one limited partner. A person can be both a general and limited partner
A corporation may be the sole general partner |
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Term
| Limited Partnership Requirements |
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Definition
Certificate of limited partnership must include:
-name
-general character
-address of the principal place of business
-name+address of every partner
-latest date on which the partnership is to dissolve
-amount of capital contributed by each partner |
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