Authority

Actual

Express

ApparentInherentRatificationEstoppel

ImpliedRTA s.2.01RTA s.2.03RSA 8A(RTA Strikes)RTA 4.01RTA s2.05P to AP to TPP ratifies ANO AGENT

Agent actsreasonably onPsmanifestationsthat P wants Aso to act.Conduct,words, orimplied byconduct

Based on A’s

reasonableperceptionPower held byA to affect Pwhen TP rblybelieves A hasauthority to actbased on Psmanifestationto TP

Sub AgentRTA 1.04(8)

A of A to

conduct P’s

business inscope of AauthorityLook to pastconduct

“Such powers

are asreasonablynecessary tocarry out the

duties”

UndisclosedPrincipalOr

“Rogue” A

DisclosedPrincipal

Agent & TP areparties toagree.

Liability ofAgent on K

R3rd s.6.03

Duty is on A to disclose P

Look to K to

clarify A’s

authorityApp ImpAuthority: putagent in placefor TP to rblybelieve A hasauth.

P liable for A if A’s

acts are within authusually confided inan agent whonormally has thatauth (can K out)Look forundisclosed P

P gen. Undiscl.RSA 161

RTA expands RSA

capture “Rogues”

No act or app

–

Pmay be liable to TPbased on A if:P isintentionorcarelessof TPbeliefP is onnotice ofTP beliefand doesnot try tostopAffirmance of prioract done by AManifestassentthat actwill affectlegalrelationsP acts to justify rnblassumptnof consentA must be

acting ON P’s

BEHALF!IMPLIEDaffirmance = Pconduct, Pmust havereason toknowP must havechoice, cannotbe AFTER act

UndisclosedPrincipalUnidentifiedPrincipal

A is

NOT

partyUNLESSagreeotherwiseA

partyUNLESSagreeotherwiseA & TP

ARE

party UNLESSagreeotherwise

Nonagent Ind.Contractor

Liability of P onTP on Tort

EmployeeNonempleeAgent

NOT Liable

NO CONTROL

UNLESS:P

NOT

liableunless:P liable ifwithin scope ofemployment

CONTROL

Not on Agency, on KIND of Ag

RTA 7.03(1)

Direct

RTA 7.07

Employee

RTA 7.08

Apparent A

Day-to-day control, distinct operation, custom, skill, tools, time,compensation, party belief, business or not (7.07)POLICY

–

Control, esp ownershipand profits tends to infer agency

Labels don’t matter

RSA 1.01

–

P must have controlControl over actual instrumentRespondeat superior as limit

7.07

–

SCOPE

:Engaging in conduct subject

to P’s control

Liability = if harm isforeseeable from conduct ofEEs

7.07

–

Intentional

Look at type of tort

P assert controlP negligentNon-delegableP volunteers totake dutyApparentAuthority

“Nuisance per se”

IncomptContractor ORFinanc. Incom.Nondelegableduty

OFFICERS areAGENTS OFCORPORATIONSPRES has inh auth tobind C for K

Agent’s Duties

Duty of CareRTA 8.08, .09Loyalty

W/in Scope &Comply w/Instructions8.09ReasonableCare 8.08AdverseDealings8.03PersonalBenefit8.02ProprietaryInform8.05Competing8.04PersonalProfits fromPosition

Reading

Grabbing &Leaving

Town &Contry

UsurpingBusiness

Singer

FiduciaryDuties

Waiver Waiver Waiver Waiver Waiver

May take stepsin preparationto competeWhen inconnection toagencyrelationshipNot useproperty of Pfor own or TPCannot communicate confidential information for Aor TPs benefit

P MAY consent toConflict of Interest8.01

A must act ingood faithDiscloseMATERIALinformationDeal fairly

P’s consent

must bespecific to actor transaction

If Breach:

Disgorgeprofits to PWorse than Kcase b/c notdamages,disgorgeTrade securedthrough yearsof bus. andadvertise, $$

Partnership

Unlimited liability, limittransferability, single taxation,limited access to capital,informal, less regulation w/inPS agreement, life limited topartner

101(6); assc of2 or more asco-owners, forprofit101(10):almost anyentity can bepartner201(a): PS isdistinct frompartnersRUPA is basisdefault rules

Non-Waivable

Duty of Loyalty,Care, Good Faith,Inspection

(1) Agreementb/t parties(2) Written, notneeded(3) Co-property notdeterminative(4) Share inprofits,presumed,UNLESSdebtwagesrentAnnuity/retireDebt serviceSale goodwillor property(5) Share inmanagement401(f)(6) Partnersmay becreditors

Partnership Windup

306(a): AllPs j/sliable forallliabilities308(e): ifnot PSs w/ eachother, notPSs to 3

parties807(a):aftercreditors,surplus toPS byrights todistribution(7) Look at

who’s at risk at

dissolution301(1): Each partner is agentof allUNLESS (1) P does nothave authority,

AND

(2) TPknows or should know P

doesn’t have author

Allows APPARENT AGENCY(ordinary)305(a): PS isliable for act ofPs if act inordinarycourse ofbusiness306(a): all Ps j/ s/l for allLate-ComingPartners NOTliable forpreviousincurred oblg

Partnership By Estoppel

P must showexpress orimpliedholding out ofPS by DRepresentwas made byD or personalleged PSReason.Reliance byTP in goodfaithTP is harmed

Effect of PS by Estoppel

If D purportsto be PS andTP relies, D isliable to TPIF MADE INPUBLICMANNER, Das PSbE isliable even if

doesn’t know

If PS liability,then thatPSbE is liableas if P werepartner

Good Conduct

“catch

all”

8.10

PartnershipDuty

RUPA 404(b):duty of loyalty,

inc “approp of

partnershipopportunity

”“Punctilio of an

honor most

sensative”

Meinhard

Notice+Opportunity

RUPA 103b3

:Cannot elim loyalty,but can id certaincategories,

if not manifestly unreasonable

Elim duty of loyaltywhen poss, limit notice,time period limit,

change “PSopportunity” meaning

Interested partycannot vote inratification of self-interestedopportunity

Perreta v.Prometh

RUPA404(d):

PS mustdischarge w/ obligation ofgood faith &fair dealing

PartnershipDisassociation

RUPA 601(3)P may beexpelled asterms of PSAgrRUPA 602b1:Wrongfulexpel ONLYIF breachexpress termof PS Ag

Partnership Transfer

401(i):All Ps mustconsent to sellPS interest502 & 503:PS haspersonalinterest in prof& losses &distributions501:P is not co-owner of PSproperty,cannottransfer504(a)-(b): Creditor MAY get judgment against P interest(8) Mgmt equalrights for all Psunless PS Agsays otherwise401(j): Diff in mgmt, majority wins, if notordinary, must have consent of all Ps

PS FREEZEOUTS!

–

P v. TP305(c) & 401(c): PS is liable forordinary bus of P tort, mustindemnify P if in ordinary course

103(a)

–

PS Ag may alter relations B/T Ps &103(b) lists non-alter in PS Ag

PartnershipDisassociation603(a)

FOR TERM602(b)(2): if interm:

Owen v Cohen

: if P provides loan to PS,

presumed “for term” if pay of loan is out of

profits

Dissolution & Wind UpArticle 8Continuation of BusinessArticle 7

602(a)

P may disassany time, rightor wrong, byexpress will

602(c)

Wrongfuldisass = Pliable fordamages toPS for disass

RUPA 801(5)

(i) economicpurposefrustrated(ii) one Pengag inconduct thatmakes PS notreasonablyconduct(iii) no longerreasonablypracticable tocontin PSunder PS Ag

(i) P withdraws byexpress will(ii) P expelled by judicial determ.(iii) P becomesdebtor in bankrupt.(iv) P expelled ordisass b/c dissolvor termination

AT WILL601(1): noticeby P to withdrP may be creditor and P,and may pursue owninterests - 404(d)

RUPA 701

Value atwindup isgreater of:Liquidationvalue, ORValue basedon sale of busas

going concern w/o disass P

(1) Voluntary Association(2) Primacy of K PS Ag

EXPULSION

: if notpermitted in PS Ag, cannotexpel, can seek dissolve but404d

BUYOUT:

“Some objectivedetermination of value”

needed

Fair Market Value

Wind UpProcess

807a-b:

Creditors paid, then Ps

807b

: profits & losses from liquidation chargedto Ps accounts

803c

: person WU may dispose of and transferthe assets

Kovacik Rule:

Ps share in profits and lossesUNLESS one P is only skill & laborConflict w/ 401(b)

–

proportionate sharesAmount = Capital Account (book) + avg prior 3years profits/gains paid to GP802(a)

–

PS continues after dissol andterminates when WU done

–

fees split as in PS

Shareholder SuitsDirectDerivative(recovery goes to Corp)

(1) personal action by SH for injuryof SH(2) SH as individual(3) recovery to P-SH(1) SH files on behalf of injury tocorporation(2) COA belongs to corp(3) recovery to corp(4) special pleading required 23.1Evaluate the HARM, who isharmed?Who would recover?P was SH at time of act orbecame through transfer ofSH who was at time

MBCA 7.41

SH fairly & adequatelyrepresents interests of corpin enforcing corp

MBCA 7.42Demand Requirement

Written, specific demandmade upon C to takesuitable action (wrongdoers)90 days have expired fromdemand, OR demandrefused, OR 90 too longFRCP 23.1

–

Muststate desired resultin demand

Demand Futility -(1 of 3)

Majority BoD conflicted intDel: Majority BoD not indp bydomination or control (NY: notinformed themselves)Charged transaction not subjectto BJR

–

BD no BJR

Show by reason. Doubtthat BD cannot decidedemand w/ part. facts

BD AcceptsBD Denies

BD takes over the lawsuitDenial issubject toBJRP-SH mustoverturnBJR topass denialIf demandmade,cannotclaim futility

BUSINESS JUDGMENTRULE

Presume BD acts with goodfaith and promoting best intof corpOverturned w/ part. factsshowing bad faith, conf int,AND breach of fid dutyNY Rule: part facts

–

(2) fail to inform(3) trans = BJR notpossibleDel Rule: reas doubt -(2) bd lacks indp(3) trans not validexercise of BJR

Special Litigation Committee(SLC)

–

small comm of non-interestBD members to review demand(1) SLCmember selcprocessreview(2) procedused by SLCto reach subreview(3) SubstanoutcomeNOTreviewedBd member experience with contested trans,prior affilitations, completeness of inquiry, goodfaith, no pro-forma/shallow investig,

“eminentspecial counsel”

- but TAINTED BD can appointSLC members

Auerbach

standard

Zapata

standard

(1) Bd Indp &good faith(2) Basessupp decision(2) Ct applies

own “indp BJ”

whether todismissMore substantive review intodecision & eliminates potentialstructural bias

–

subject to SummJudgment Standard Rule 56

–