Business Orgs.

policy for tort agency

agency stands on control because Cant vet the agent and take precautions · If we are going to impose liability on someone other than the tortfeasor that person must have the control to impose the cost solutions to make sure these events don't happen

"an employee is an agent whose principal controls or has the right to control the manner and means of the agent's performance of work

" RS3 7.07(3)(a):

three elements of partnership

1. association of two or more persons 2. to carry on as co owner so f a business 3. for profit UPA 6(1)

Rst. 2d Agency, § 14O

"a creditor may become the principal when he gains de facto control over the debtor." A security holder who merely exercises veto power over business acts of his debtor by preventing purchases or sales above specified amounts does not become a principal

factors for determining partnership

(1) Intent of the parties, (2) the right to share profits & Losses (3) ownership of partnership property, (4) control in administration, Most important factor (5) language of the creating document, and (6) holding out as partners to third parties. (7) rights upon termination of partnership

When a partner has opportunities outside of the partnership - three rules that may be adopted in terms of what his obligations are in pursuing the option:

(1) Same Term Option—if the opportunity is in the same field as the venture/partnership goals, then it must be pursued on the same terms (Overinvestment concerns apply here) Most favorable to M (2) Competition/Renegotiation—the other partner should be given an opportunity to compete for, or renegotiate over, any new opportunity (disclosure of the opportunity rule); Favorable term for both parties Prob: benefits 3rd part best, so neither M or S would likely agree to it (3) Salmon's Option He can do whatever (no obligation).

duty to principal after agency ended

(1) solicit his former employers customers (2) who are not openly engaged in business in advertised locations or (3) whose availability as patrons cannot readily be ascertained (4) but whose trade and patronage have been secured by years of business effort and advertising, (5) and the expenditure of time and money, constituting a part of the good-will of a business which enterprise and foresight have built up. towne 7 country house

UPA 409b - partnership duty of loyalty

(1) to account to the partnership and hold as trustee for it any property, profit, or benefit derived by the partner in the conduct and winding up of the partnership business or derived from a use by the partner of partnership property, including the appropriation of a partnership opportunity; (2) to refrain from dealing with the partnership in the conduct or winding up of the partnership business as or on behalf of a party having an interest adverse to the partnership; and (3) to refrain from competing with the partnership in the conduct of the partnership business before the dissolution of the partnership.

9 features of partnership

- All owners— "partners"—are liable as principles; - All partners are also general agents of the partnership; - All general partners are jointly and severally liable for the debts of the business, exactly like single principles; - Formation: informal - UPA - Can't form without knowing - Not limited liability but can bargain for it; use LLP and buy insurance (biggest diff. from Corp.) - No free transferability but can agree to allow - Continuity - at will unless otherwise agreed on; need agreement - No centralized management but can create one by agreement - Tax Single

Generally, profit sharing of net profits is prima facie evidence that a partnership relationship exists.

. UPA 7(4).

four elements of joint venture

1. Contribution by the partners of money, property, time, or skill in some common undertaking, but the contributions need not be equal or of the same nature; 2. A proprietary interest and right of mutual control over the engaged property; 3. An express or implied agreement for the sharing of profits, and usually, but not necessarily, or losses; and 4. An express or implied contract showing a joint venture was formed.

if dissolution wrongful what happesn

1. If the dissolution under the UPA (1914), or the dissociation under the UPA (1997), is wrongful, then the other partners have the right to continue the partnership without the withdrawing partner. 2. The wrongfully dissolving, or dissociating, partner, as applicable, is entitled to have his partnership interest bought out but not until the partnership term is expired.

two types of agency control

1. the authority to direct what is done (i.e., control over the result), and 2. the authority to direct how it is done (i.e., control over "physical conduct" or the means to reach the desired result). · If (1), then agent is at most an independent contractor (there are also non-agent independent contractors) · If (2), then agent is servant (or employee)

provides that in the absence of an agreement to the contrary, "all partners have equal rights in the management and conduct of the partnership business,"

18e

key distinction between servant and independent contractor types of agents is differentiating natures and degrees of control exercised by each party

2nd 250

: a master is subject to liability for the torts of his servants committed while acting in scope of employment - not liable for independent contractor

2nd §219(1) agency

three contexts where p liable for A torts

A. Master/Servant (Employer/Employee): RS3 §7.07; §2.04 (vicarious liability) B. Incompetent agent: RS3 §7.05 (direct liability) C. Inherently dangerous activity: RS3 §7.06 (direct liability)

Restatement (Second) § 1(1) cmt. b.

Agency Does not require Compensation when one ... asks a friend to do a slight service for him, such as to return for credit goods recently purchased from a store," an agency relationship exists even though no compensation or other consideration was contemplated.

Case that held An agency relationship can be formed by a mere conditional statement, which suggests that a person is exerting control over another. When there is a manifestation of consent to act in a specific way, it shows control over the agent by the principle. Intent to control and assent must both be present. a school teacher lends her car to a coach, who gets into an accident. The Court found that teacher was liable because she loaned her car on a condition that the coach drove, exerting control over his conduct. ..

Gordon v. Doty,

· Agency can be estb. By ownership alone regardless of presence/absence of the owner in the car at the time of the accident establishes prima facie case against the owner for the reason that the presumption arises that the driver is the agent of the owner -owner is the low cost risk avoider because of insurance

Gorton v. Doty -

imposter salesperson sold furniture to H in shop. held shop is estopped from claiming no agency and thus no authority—No Apparent authority cuz no agency relationship

Hoddeson v. Koos Bros

o held agent of computer supplier had apparent authority to contract because there was no evidence that the supplier communicated to the buyer that only management or supervisors could sign on contract, and it was reasonable for the buyer to infer the acceptance, so a salesperson's (agent's) signature bound the company.

In 370 Leasing Corp,

· TEST: Duty of loyalty breached in new partnership opp where new partnership opp is closely related to the old one AND the partner fails to notify the other of the opp. - same term option 20-year lease JV w/ Meinhard; agreed to bear losses equally; Salmon to remain in control of management; Salmon executed new lessor's property through Midpoint Realty Company; didn't tell Meinhard The Midpoint Lease was an extension of the subject matter of the Bristol Lease, in which Meinhard had a substantial investment. Bc opportunity arose as a result of his status as the managing co-adventurer,had a duty to tell Meinhard about it (same Term option adopted)

Meinhard v. Salmon:

what case Major circumstantial factor is prior work performed by agent for principal (finding a valid workmans comp claim against a church when the painter was hired by bro who had previously been permitted to hire others to complete jobs & church said it's a big job it will take more than one person - you can hire someone but didn't mention sam - implied authority

Mill Street Church of Christ v. Hogan

(Ratification)"an affirmance of an unauthorized transaction can be inferred from a failure to repudiate it"

RS2(Agency) §94:

JVIC hired Rash to manage division in Ok. reviewed bids on projects; selected TIPS to provide scaffolding services; never disclosed that he was owner of TIPS. JVIC opened own scaffolding division; never employed JVIC's (6) Duty of full disclosure on matters pertinent to the principal's business. an employee independent enterprise cannot compete or contract with employer

Rash v. JV Intermediate LTD:

4 elements of agency

Rest. 2d §1 Agency: fiduciary relation which results from the manifestation of (1) Authority/consent that agent act (2) on principals behalf and (3) under his control (4) And the agent manifests assent or otherwise consents to the act

2 partners in a joint venture attempted to purchase leases for an identical venture that kicks in as soon as the current one expired. purchasing leases 6 months before expiration of current ones, created conflict of interest because no longer in best interest to sell leases before they expired; Effectively extended the original leases; benefit more by waiting to sell the leases until after the original term expired The duty of loyalty required LaCrosse and Haughton to offer Bragg and Sandvick the opportunity to participate in the purchase the Horn top leases as they were in the same line of business - UPA404b

Sandwick v. Lacrosse

o Policy for agency estoppel

The duty of the proprietor encircles the exercise of reasonable care and vigilance to protect the customer from loss occasioned by deception of an apparent salesman Impractical to have the customer do it

if gain profit from agency in breach of duyt of loyalty whats the legal remedy

The legal remedy is not just contract damages; rather, should the court find that an agent violates his/her duty of loyalty, the proper remedy is disparagement of profit. Reading v. Regem (duty of loyalty): sergeant in Egypt Made money escorting cargo in full uniform; violated duty by using soldier status master entitled to proceeds of the unauthorized undertaking: Must be in authorized capacity (ie uniform)

· Any member of an at-will partnership can dissociate at any time, triggering dissolution and liquidation. o The partners who wish to continue the business of a term partnership, though, cannot be forced to liquidate the business by a partner who withdraws prematurely in violation of the partnership agreement.

UPA 801(1)

act of a partner which is not apparently for the carrying on of the business of the partnership in the usual way does not bind partnership unless authorized by other partners extraordinary event not reasonable for 3rd party to rely on depends on the nature of the business

UPA 9(2)

Generally a majority vote of partners can authorize an action. states that "[a]ny difference arising as to ordinary matters connected with the partnership business may be decided by a majority of the partners, BUT no act in contravention of any agreement between the partners may be done rightfully without the consent of all the partners."

UPA § 18(h)

says consent of all partners required to become member of partnership

UPA18g

principal liable for torts of independent contractors if

a. Where the landowner retains control over the manner and means of the doing of the work which is the subject of the contract; b. Where he engages an incompetent contractor, or c. Where the activity contracted for constitutes a nuisance per se. d. Where the activity is inherently dangerous

authority that which a reasonable person in A's position would infer from P's conduct.

actual authority

authority that a reasonable third party would infer from the actions or statements of P.Look at p's actions not a's (Have to have direct interaction w/principal

apparent authority

has apparent authority sufficient to bind P if P's acts would lead a reasonably prudent person to suppose that the A had the authority he purports to exercise.

apparent authority

(Partially disclosed principal) Curran leads A/S to believe he is an agent of BISE (a fake corp); purchases fish from them. actually an agent of MD, which goes bankrupt - argued not liable bc acting on behalf of MDI when purchased & A/S "aware" doing business w/ entity, not Curran; held Curran estopped from claiming MD liable bc he knew that he was an agent but did not disclose the identity of the principal · RULE: It is the duty of the agent if he would avoid personal liability on a contract entered into by him on behalf o principal to disclose not only that he was acting in representative capacity but also identity of principal

atlantic salmon

· Creditors may become principles depending on how much control they exert over the debtor. loaned money to grain supplier, Warren, to operate grain elevator/store grain. lots of authority over day-to-day operations of Warren. benefited from relationship, reviewed books made suggestions not allowed to make improvements or repairs w/o permission not to become liable as guarantor or encumber assets w/o permission can't sell or purchase dividends or stocks; Warren went bankrupt, held as a principal, liable for Warren's contracts.

ay Jenson Farms Co. v. Cargill, Inc. Cargill

held wife did not ratify husband's contract to sell land because didn't know about deal. Simply the existence of a spousal relationship did not establish agency as to bind the wife to the contract.

botticello v. stefanovicz

policy for being liable for independent contractor torts

contractee has power of selection and application of distributive justice could be said for the view that a loss arising out of the tortious conduct of. A financially irresponsible contractor should fall on contractee (issue wasn't raised)

whether parnership property is property of partnership/individual is determined by

determined by intentions of the parties at the time the property was acquired as shown by facts and circumstances surrounding transaction of purchase considered with the conduct of the parties toward the property after the purchase A partner can't claim title in partnership property; Can only claim rights in specific partnership property bestowed upon the partner under law

agent not liable UNLESS special circumstances and/ or the parties agree that the agent will be liable under the contract. Rest. 3rd Agency 6.01 Exceptions:

disclosed principal

partner expresses the will to withdraw non-wrongful dissociation leads to winding up UNLESS it is a partnership for a specified term.

dissociation upa 1997

material change in partner relationship, all non-wrongful dissolutions leads to winding up UNLESS partnership for specified term. (disassociation not recognized)

dissolution 1914 upa

agents have what duty to principals

duty of loyalty

elements of tort agency

employment scope of employment

ay be invoked when there has been detrimental reliance on a representation made by someone (thought to be the agent)—this is most commonly (only) in cases of fraud to estop[ principal from denying liability

estoppel

No partnership (was employee) intent to give salary increase while protecting Fenwick from having to pay it if his business did not improve. Losses & capital taken by Fenwick; Fenwick complete ownership and control over; filed partnership income tax returns, did not hold themselves out as partners to anyone else; No partnership name no "winding up the partnership" or any indication that a partnership had been dissolved. agreement described as "partnership," each as a "partner." continued current duties; paid existing salary +20 percent of profits "if business warrants it.. o One way he could've gotten her in as a partner: add in contract language that he must confer with her on all business decisions (that implies that she had some control)

fenwick v. unemployement comp committee

Hoovers injured in Fire caused by negligence of employee of a service station owned by Sun and operated by Barone; held he was IC not employee

hoover v. sun oil

factors for employment relationship

hours of operation, product sold, title of products, terminable of agrmt, who has risk of

car rolled away from a gas station hurt Martin. issue is Humble liable as employer or Schneider as IC who operated the gas station. held enough control over day-to-day operations

humble oil

implied actual authority circumstantially proven that the principal intended to delegate powers to the agent that are necessary for carrying out agent duties

implied authority

held trailer purchased by Carroll was partnership property during a bankruptcy proceeding because circumstances (including the fact that the seller's invoice listed C&F Trucking as the purchaser and the title for the trailer was signed by the debtor and listed C&F Trucking as the owner) suggested an intent of partnership property.

in re fulton

general A can bind P (even if going against P) (whether disclosed or undisclosed) to an unauthorized contract, if A would ordinarily have the power to enter such a contract and T does not know that matters stand differently can be no apparent authority w/ undisclosed principal because no manifestation

inherent authority (RS2 of Agency, § 161 & § 194).

(negligence Case) Gov. contract W/ drydock owner inebriated Coast Guard turned wheels on drydock wall; ship fell against drydock wall By granting the inebriated seaman access to the drydock so that he could perform his duties, the Gov. assumed foreseeable risk that he might cause damage to the drydock.

ira bushey

duty of loyalty of parntership alsoapplies to what

joint ventures

if dissolution okay what happens

leads to winding up

demolition damages—employer liable).(ie inherently dangerous - an activity that can only be carried out with special skill and care and involves grave risk of danger to persons or property if negligently done Rest torts 835€ 416 -

majestic reality

battery/negligence) fans heckling Grimsley while throwing warm-up pitches; glared faced hecklers, wound up; pretended to throw toward imaginary catcher in the bullpen; but it flew toward hecklers Court applied purpose motive test (vicarious liability extends to intentional torts) what must be shown is that the employee's assault was in response to the plaintiff's conduct which was presently interfering with the employee's ability to perform his duties successfully

manning v. grimsely

no partnership (was lender) 3 men loaned $2.5 mil. in securities so investment firm could get a loan of $2 million to trade—they were to get 50% profits not exceeding $500,000 and not less than $100,000. All partners and employees handed in resignation to CEO who could accept at any time and the lenders had the option to buy into the firm by buying 50% of all members' stock at a stated price. Although some of the provisions weigh in favor of partnership existing (it is really on the fence). Compared to Cargill, where Cargill was heavily involved in the day-to-day decisions, the lenders here although had control, they did not exercise it.

martin v. peyton

Lawyers planning to start own firm—preparing an office not a violation of duty. However, lied when asked directly if they were starting own firm—violation. also stalled after disclosure to the detriment of the existing partnership (they also seemingly mislead the clients into leaving with them). Violation of fiduciary obligations.

meehan v. shaughnessy

(Estoppel)P found sapphire in burger; Agrmt. restaurant identical to McDonald's; same food/service; stated was IC; displayed McDonald's signs; wore McDonald's uniforms. visited bc looked like McDonald's/wanted same food/service for Apparent Agency to have applied, would have to show that she went to the restaurant because it was a McDonalds and the jury would have to find that McDonald's "held out" the business as its agent. RULE - A person who holds out another as an agent and causes a third person to reasonably rely on the care or skill of the apparent agent is liable for injuries to the third person for harm caused by that apparent agent.

miller v. mcdonald

plaintiff slips and falls in Holiday Inn franchise. contract, Holiday Inn only controls maintenance, name, style, furnishings, refrain from competitiveness, submit to inspections, quarterly reports BUT owner holds all of the risks of business and drew the profit from operating the hotel; clause disclaiming agency relationship. No agency

murphey v. holdiary in

notwithstanding the fact that Stroud informed Nabisco he would not be responsible for any bread it sells to partnership. Stroud, & partnership, bound by court's judgment for the purchases made by the defendant Freeman the other partner. **tie breaker rule - 2 partners one disagrees - go with one that did something · Where there are an equal number of partners - favor action over inaction....SO when there is gridlock - he brought bread so that is action In case of even division of partners - no restriction can be place on the power to act

nabisco v. stroud

In a stalemate concerning ordinary business, action is protected and assigned as the action of the partnership as a whole.

nabisco v. stround

three ways to dissovle term partnership

o (1) If a partner dissociated by death, declaring bankruptcy, becoming incapacitated, or wrongfully dissociates, the partnership will dissolve if within ninety days of that triggering dissociation at least half the remaining partners express their will to wind it up. o (2) It may be dissolved if all the partners expressly agree to dissolve. o (3) The partnership is dissolved if the term expires. UPA 8012

three requirements of estoppel

o (1) Intentional, negligent or otherwise culpable acts or omissions by the principal, which create an appearance of authority in the purported agent; o (2) 3rd party reasonably, and in good faith, acts in reliance on that appearance of authority; and o (3) 3rd party changes her position in reliance upon that appearance of authority.

three parts to foreseeability test

o (1) harm from the employee must be foreseeable (the particular harm doesn't have to be) o (2) Servant's conduct must not create risks different from those attendant on the activities of the community in general; (Ie - setting fire to bar not good; but in the employer context yep) and o (3) Servant's conduct must relate to the employment

4 parts to expulsion by unanimous vote of partners

o (i) it is unlawful to carry on the partnership business with that partner; o (ii) there has been a transfer of all or substantially all of that partner's transferable interest in the partnership o (iii) corporate partner has been dissolved o (iv) a partnership that is a partner has been dissolved

policy for opportunity rules for partnerhsip

o Benefit of Giving Salmon the Opportunity (Option #3): Encourages him to work hard ("Good Incentives") o Cost of Giving Salmon the Opportunity (Option #3): Encourages him to under- or over-invest today in order to share costs but not benefits. ("Bad Incentives") o Proposition: Bad incentives will be relatively higher the more closely related the old and new opportunity are. Good incentives are the same regardless. Doesn't work the same if the same type of business-

4 things that don't cause dissacosiation

o Partner's transfer of transferable partnership interest o Creditor obtaining a charging order o Adding a partner o Disagreements between partner

· exists when an agent tells the third party that the agent is acting on behalf of a principal, but the identity of the principal is not disclosed. bc an unidentified party may not enter into a contract, the agent is usually treated as a party to the agreement and is bound by the agreement.

partially disclosed principal

duty of care for partnership

partnership and the other partners in the conducting and winding up of the partnership business is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of the law.

two tests for scope of employment

purpose motive test Ira bushy rule foreseeability test

when a principal · (1) accepts the results of the act of an agent · (2) fully intends to ratify and, · (3) knows all material circumstances.

ratificaiton

when can a non contracting party be liable in absence of agency

ratificaiton & estoppel

if the other party to transaction has notice that the agent is or may be acting for a principal but has no notice of the principal identity the principal for whom the agent is acting is a partially disclosed principal Unless otherwise agreed a person purporting to make a contract with another for a partially disclose principal is a party to the contract Requires actual knowledge

rest 4(2)

The agent has a duty to act loyally for the principal's benefit in all matters connected with the agency.

rest. 3 8.01

Actions designated (i.e., express) or implied in P's manifestations & acts necessary or incidental to achieving P's objectives, according to A's reasonable understanding of P's manifestations and objectives

scoe of actual authority

receiving does not indicate partnership Doesn't take into account expenses

share of gross returns (revenues) - UPA 7(3)

No partnership (Was IC) agrmt. term 5yrs; renewable upon mutual agreement; SEM all capital/indemnified RIBA for losses; SEM's president told RIBA if not happy after first year would give back the shows; 3rd party contracts in own name; never filed partnership tax returns. RIBA's contributions were also intangible (some management decisions, goodwill, no expertise in the operations of these events). Shared profits but no intent prima facie evidence rebutted

southex exhibitions v. rhode island

If explicit agreement not to act, will favor the inaction.

summers v. dooley

o (1) Apparent authority for disclosed principal (2) Special Rule for Undisclosed Principal: A can bind § (1) undisclosed P to an unauthorized contract if § (2) A has justifiably induced T to make detrimental change § (3) AND P has notice of A's conduct (and its potential to induce a change of position) § (4) AND fails to take reasonable steps to notify T (RS3 of Agency §2.06)

thrid restatement inherent authority

partnership determined by

totality of circumstances

house cleaning business; customer base by randomly calling residents in a certain section of town that she determined might contain likely prospects. Difficult to do; Newbery fired formed own house cleaning company; competed w/ former employer by soliciting T&C's customers did not solicit T&C's customers until after termination but built customer base by soliciting T&C's customers exclusively (could be in same business just can't use same list)

town & country house

exists when an agent is acting on behalf of a principal, but the agent does not tell the third party (and the third party does not know) that the agent is acting on behalf of a principal. bc the 3rd thinks it is entering into an agreement with the agent and no other person is disclosed, the agent is presumed to be a party to the agreement and is bound by the agreement. (both principal and agent are parties to contract)

undisclosed P

says Absent an agreement to the contrary, each partner shares equally in control and profits and losses of the partnership

upa 18ae

· : For there to be vicarious liability, P's control must be over not simply the instrumentalities of the A's activity but over the alleged instrumentality that caused the harm. (not the universal rule - maybe not even the majority rule = 50/50 split of who adopt it)

vandemark rule

o Undisclosed principal case) Not actual/implied/apparent authority bc no manifestation by the principal *agent would have been liable here if they had sued the agent and not the principal (Atlantic Salmon would have applied) Humble transferred beerhouse to firm of brewers, stayed to manage, no authority to buy any goods except bottled ales and mineral waters, Action to recover payment for goods the plaintiff gave credit to Humble, consisting of cigars - found agency) Policy - in every case of the undisclosed principal the secret limitation of authority would prevail and defeat action of person dealing with agent

watteau v. fenwick

No partnership by estoppel no reliance investors deposited money and entire amt disappeared; claimed relied on audit letter from (PW-Bahamas) confirming financial statement that was false; printed on letterhead w/ trademark signed "Price Waterhouse." argue PW held itself out as partnership with offices around world, and PW-US made no distinction between itself and other PW entities; used brochure didn't show reliance on brochure

young v. jones

Implied authority factors

§ Agents understanding of authority § Whether agent reasonably believes because of present or past conduct of principal that the principal wishes him to act in a certain way or have certain authority § Nature of task or job § Prior similar practices - one of most important § Specific conduct by principal in past permitting agent toe exercise similar powers § Person alleging has burden to prove

factors on whether the creditor is becoming a principal

§ Recommendations (consulting unusual) § Right of first refusal § Inability to enter into mortgages to purchase stock or pay dividends § Right of entry into warren premises to carry on periodic checks and audits § Correspondence and criticism regarding finances officers salaries and inventory § Determination that warren needed strong paternal guidance § Provision of drafts and forms to wren up which Cargill name was printed § Financing all purchases and operating expense § Power to discontinue financing

6 duties of agent under duty of loyalty

· (1) duty not to acquire material benefit arising out of the agency: from T in connection w/ transactions conducted on behalf of P or otherwise through A's agency position RS3 §8.02: · (2) duty not to deal with P on behalf of adverse party in transaction connected to agency RS3 §8.03: · (3) Duty not to compete with P or help P's competitors during the agency relationship RS3 §8.04: (must fully disclose everything) · (4) Duty not to use property of the P for purposes of A or T §8.05(1) · (5) Duty not to use or communicate P's confidential information for purposes of A or T RS3 §8.05(2): (Towne v. country house and home services) · (6) Duty of full disclosure on matters pertinent to the principal's business. an employee independent enterprise cannot compete or contract with employer without employer knowledge Rash v. JV Intermediate LTD: JVIC hired Rash to manage division in Ok. reviewed bids on projects; selected TIPS to provide scaffolding services; never disclosed that he was owner of TIPS. JVIC opened own scaffolding division; never employed JVIC's

7 causes of dissolution

· 1. Notice of the partner's express will to withdraw · 2. Occurrence of agreed upon event · 3. Expulsion pursuant to the partnership agreement · 4. Expulsion by the unanimous vote of the other partners if: o (i) it is unlawful to carry on the partnership business with that partner; o (ii) there has been a transfer of all or substantially all of that partner's transferable interest in the partnership o (iii) corporate partner has been dissolved o (iv) a partnership that is a partner has been dissolved · 5. Partner disassociated by court order because of wrongful conduct, material breach of the partnership agreement, conduct which makes it not reasonably practicable to carry on the business in partnership with the partner · 6. The partner's, becoming a debtor in bankruptcy; executing an assignment for the benefit of creditors; appointment of a trustee, receiver, or liquidator · 7. The partner's death; the appointment of a guardian or general conservator for the partner; or a judicial determination that the partner has otherwise become incapable of performing the partner's duties

4 advantages of partnership

· Help raise capital for a business, rather than through a loan. · Partners also bring specialized skills sets into a business. · Shared incentive to succeed (Both parties have "skin in the game.") · Lower individual risk potentially

three elements to partnership by estoppel

· IF: a person represents itself as being a partner in an enterprise (or consents to others making the representation) · AND: a third party reasonably relies on the representation (actual reliance required) and does business with the enterprise,* · THEN: the person who was represented as a partner is personally liable on the transaction, even though that person is not in fact a partner. => analogous to apparent agency

what are you allowed not/allowed to do whenelaving firm

· Lawyers leaving firm are not allowed to: communicate with clients before giving notice to the firm, taking client files, lying, and not letting clients know they have a choice to stay with the firm or move with you · Are allowed to: negotiate with partners, remind clients they have a right to choose their lawyer, look for office space, set up merger with another firm · Gray zone: contact clients after notice to firm, talk to associates about accompanying them

policy implications for agency

· it would be right to hold a party as a principal because they were the least cost avoider. In Doty, maybe teacher shouldn't have loaned her car. On the other hand, maybe that is such a broad reading of agency law that makes parties who are seemingly performing benevolent and positive conduct, gratuitously loaning an automobile, liable for acts of another. · A broad application of agency relationships can be difficult to contract out of. Bc it is irrelevant what the parties understood their relationship to mean, a contract that explicitly states there is no agency relationship does not excuse a constructive principal from liability. · some things should not way in favor of agency because they are things of typical lenders ie Usually not an agency with a bank but bank as some control and some covenants against the borrower. Now small business wont' get loans cuz lenders won't loan cuz of liability · One way to avoid liability is simply not exerting control over a debtor. However, especially later on, it may be in a creditor's individual goals to exert power and take on risk.