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Liability of principal for torts committed by agent
- 1. There is a principal-agent relationship
- 2. The tort was committed within the scope of that relationship
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Principal-Agent Relationship requires:
- ABCs of agency
- "Assent (informal, must have capacity)"
- Benefit (conduct for principal's benefit)
- Control (power to supervise manner of A's perf)
- Sub-agents and borrowed agents almost never meet this test
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Liability for Independent Contractors
- "Generally, do not satisfy ABC b/c lack of control"
- Exceptions:
- "1. Ultra-hazardous activity, considered non-delegable"
- "2. Estoppel, you held out contractor with appearance of agency"
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Within the scope of control or independent contractors in tort liability?
- "1. If within job description, likely within scope"
- "2. Frolics are outside scope, detours are within scope"
- 3. Agent intended to benefit principal -> likely within
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Liability for intentional torts of agents
- "Generally outside the scope, so no liability"
- Except:
- 1. Authorized by P
- 2. Natural from type of job
- 3. Motivated by desire to serve P
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Liability for contracts entered by agent?
- P is liable if authorized A to enter contract
- 1. Actual express (oral OK except for land and SoF. revocable unless durable power of attorney)
- "2. Actual implied (necessity, custom, prior dealing)"
- 3. Apparent (P cloaks + 3rd party relies)
- "4. Ratification (P knowledge + benefits, no alteration)"
- Authorized agents not liable unless undisclosed principal
- Duties owed to A by P
- Compensation for its efforts and reimbursement for expenses
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Duties owed to P by A
- 1. Duty of care
- 2. Duty to obey
- "3. Duty of loyalty (self dealing, usurping, secret profit) (recover losses and disgorge profits)"
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Formation of general partnership
- No general partnership formalities
- "Association, 2+ persons, carrying on, co-owners, business, for share of profit"
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Formation of limited partnership and RLLP
- Filing certificate of limited partnership with state incl. names of GPs (All partners may now manage business w/o giving up limited status)
- RLLP: Register statement of qualification with state plus annual reports (makes NO partner liable for business)
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Liability to third parties
- General partners liable for all partnership obligations and each other's torts
- Estoppel -> representers are liable as if partners
- Limited partners + registered limited liability partners have limited liability
- Dissociating partners retain liability until notice given to creditors or 90 days after filing notice of dissociation with state
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Relationship between partners
- "1. Fiduciaries (Self-dealing, usurp, secret profit) -> accounting (losses + disgorge)"
- "2. Only share of profits is liquid, transferable"
- "3. Absent agreement: equal control, no salary, equal profits, losses like profits"
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"Dissolution, Termination, Winding up"
- "Dissolution: absent agreement specifying event, one GP's express intent to dissociate"
- Termination: Actual end of partnership
- "Winding up: Period between dissolution and termination, partners liquidate partnership assets"
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Priority of distribution in partnership winding up
- 1. Creditors (outside AND partner-creditors at same level)
- 2. Capital contributions by partners
- 3. Profits and surplus (shared equally absent agreement)
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