Business Law II Notes

1/23/23
● I.R.A.C is how to brief a case
● Issue, rule, analysis & counter analysis and conclusion
● Issue is always stated as a question
● If you don't know the addition facts within the analysis then state that you dont know the facts to
back that rule
● Rules are factors or elements and simply are the laws which apply to the issue
● Elements are required to establish the issue and factors are things that you weigh to show that in
totality, it supports the issue
● You can miss a factor and still have the issue but if any one element is missing then the evidence
isn't fully there to conclude the issue is there
● Analysis is two parts, one part that supports the person who wants to win and one counter for
those who are on the other side
● Counter only needs to counter one element to be valid but non counter will need to explain all 5
elements
● Conclusion will clearly state who won and why
● If conclusion is wrong but you have strong evidence then you won't lose points
● Intro vignettes are very good practice for the exams because its very similar
Chapter 35 Agency Law
● Agency- is the fiduciary relationship when one person (a principle) manifests assent to another
person (an agent) that the agent will act on the principal's behalf and be subject to the principal's
control
● Agent must consent to the act for the principal or under the principal’s control
● Agent agrees to do what the other person asks of them
● Non Delegable Obligations-
1. Entertainers where personal service is critical
2. Voting in public elections
3. Making statements under oath
4. Signing a will
● Krakauer v. Dish Network, LLC circa 2019
- Issue is Whether Satellite Systems Network (SSN) was an agent of Dish Network, LLC at
the time it made the calls to Krakauer?
- Rule(s) Elements to establish an agency include:
1. One person (the principal) manifests assent to another person (the agent) that:
a. The agent will act on the principal's behalf and
b. Be subject to the principal’s control
2. The other person (the agent) manifests assent to the relationship or
3. The other person (the agent) otherwise consent to act for the principal and under
the principal’s control
- Analysis and Counter Analysis (Facts that support elements)
1. Dish said SSN could use their logo
2. Contract mentioned that SSN is not an agent of Dish (diss to rule 1)
 3. Unknown
-Conclusion is that they found that there is an agency relationship between Dish and SSN
● Capacity is the idea that if you have the capacity to understand the agency then you can legally
bind yourself to that agency
● Actual Authority (express or implied) What is it that the principal wants the agent to do?
- determined between the principal and the agent
- Express is created by actual words (Actual Authority)
- Implied is created when an agent is authorized to do whatever is reasonable to assume
the principal wanted the agent to give the principal’s statements and surrounding circum.
● Apparent Authority-
-determined between the principal and third party
● Factors for Authority (Rules)
1. Principal’s statements/actions
2. Nature of the agency
3. Acts reasonably necessary to carry on the agency business
4. Acts customarily done when conducting that business
● General and special agents section on chp 35 should be crossed out doesn't matter
● Sub-Agency is when an agent has an agent (Example: employee to a manager)
1/30/23 Chapter 35 Continued
● Employees & Nonemployee Agents:
- 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
- Employee is always an agent but an agent isnt always an employee

● CBS v FCC circa 2004

- Issue is whether Jackson and Timberlake were employees of CBS such that they would
be liable for their actions during the halftime show?
- Rule(s) There are 11 Reid factors to be considered in determining whether someone is an
employee of a principal
1. Skill required for the job (the more skill required the less of an employee you are)
2. Source of the instrumentalities and tools (what is supplied to you)
3. Location of the work (where you are instructed to work)
4. Duration of the relationship between the parties (if they come back often they are more likely to
be an employee)
6. Payment method (W2 or 1099, withhold taxes)
7. The extent of the hired party’s discretion over when and how long to work (you can't choose your
hours and what days you want to work usually)
8. Hiring party’s role in hiring and paying assistants
9. Whether the work is part of the regular business of the hiring party
10.Whether the hiring party is a business
11. Tax treatment if hired parties
-OR- you can use Restatement Third Factors (court will apply either)
- Conclusion found that Jackson and Timberlake were not employees of CBS. CBS could not
be liable for Timberlake and Jackson
● Problem #3 (Eisenberg case) use Reid factors or Restatement Third
● Duties of Agent to Principal:
- Duty of Loyalty (2 main things that the agent must do)
- 1 is avoid the conflict of interest with the principal
- 2 is maintain confidentiality of information received from the principal

● North Atlantic Instruments, Inc v Haber circa 1999

- Issue is Whether Haber breached his duty of confidentiality?
- Rule(s)
1. Unless otherwise agreed, an agent may not use or communicate confidential
information for his own purposes or for the benefit of the 3rd party
2. The duty that is assumed during employment continues after termination
- Argument (North Atlantic): Haber disclosed information to a 3rd party; contract required him to
keep all things secret
- Counter Argument (Haber): Client contacts are private to the individual, not the same as customer
lists
- Conclusion: Haber was in the wrong he breached duty of confidentiality

● Other Duties (Conflict of interest) Agent to Principal

- Obey instructions
- Act with care and skill
- Provide information
- Segregation, record keeping, and accounting
- Not to receive a material benefit
- Good conduct

● Problem #5 Creteau family went to Jamaica and they were robbed at gunpoint and Creteau sued
the travel agency and lost because of the “other duties”
● Other Duties Principal to Agent
- To compensate agent
- To reimburse agent for money spent in principal’s service
- To indemnify (found responsible for charge) agent for losses suffered in conducting
principal’s business

● Termination of the Agency

- At a certain time or upon the happening of an event stated in the agreement (90 days)
- Or when a specific result has been accomplished
- By mutual agreement (this is working lets end it no damages)
- At the option of either party
a. Principal initiates it it's a revocation
b. Agent initiates it is a renunciation
 - Termination by law
a. Death of an individual
b. Principals permanent loss of capacity (medical doing or can't function)
c. Cessation of existence or suspension of power of an agent or principal (such as a
corporate dissolution) (if the business shuts down while working with agent or principal)
d. Circumstances from which it could reasonably be concluded the agency terminated
(serious breach of fiduciary duty, bankruptcy) (principal gets arrested, now in jail)
e. Change in value of agency property or subject matter (real estate but now property has no
value now like maybe it burned down)
f. Change in law that makes the agency illegal
g. Changed business conditions or outbreak of war
h. Impossibility of performance
● Gniadek v. Camp Sunshine at Sebago Lake, Inc. (circa 2011)
- Issue: Whether Micheal had apparent authority of the camp at the time of the assault?
- Rules: Apparent Authority
a. is authority which, though not actually granted, the principal knowingly
permits the agent to exercise or which he holds out as possessing
b. Apparent authority exists only when the conduct of the principal leads a
third party to believe that a given party is its agent
c. Apparent authority ceases when it becomes unreasonable for a third party
to believe that the agent continues to act with actual authority
- Application: This didn't take place at the camp and Micheal the counselor wasn't working in the
off season when this happened.
- Counter analysis: camp gave Micheal the full roster with phone numbers to the girl and her
mother
- Conclusion: camp is not responsible for the assault

● Introductory Vignette- Revisited

- Rita violated 7 duties of principal (duty of loyalty)
- Rita violate duty of loyalty, duty of confidentiality
- The company will get damages from Rita for each client and stop her from calling more
IPQ clients (injunction) and she will be terminated
- Rita could have rebalanced her budget or asked for a raise to make her income meet her
expenses instead of starting a company to steal their business

● TO KNOW FROM CHAPTER 35 FOR TEST

- Know when an agency relationship is created
- Understand the distinction between employees and non employee agents
- Recognize when an agent risks breaching a fiduciary duty
- Describe the way agency relationship are terminated
a. Can't terminate remication, death, cessation

● TRUE OR FALSE TEST REVIEW 1T 2F 3F 4T 5F 6T 7F 8T

2/6/23 Chapter 36 Agency Law: Third Party Relations of the Principal and the Agentcontract liab
● Contract Liability of the Principal
- Principal bears tort and contract liability for their own acts or omissions
- Principal controls an agent, this principal is liable for the agent's acts or omissions.
a. If the contract was made by an agent having express, implied, or apparent
authority to act
● Agency Authority
- Actual Authority
a. Express: oral or written or written agreement (need words!)
b. Implied: Do whatever is reasonable to assume the principal wanted in light of the
express authority (reasonably assume)
4 factors for implied authority
- Express statement by principal
- Nature of the agency
-Acts reasonably necessary
-Acts customarily done
-Apparent Authority
a. Principal’s manifestation that cause a 3rd party to form a reasonable belief in authority

● Agent’s Notification and Knowledge

- If the third party gives agent proper notification, the principal is bound as if notification
had been given directly to the principal
- Notification to a third party by an agent is considered notification by the principal
- Sometimes, an agent’s knowledge of facts is imputed to the principal

● Ratification (contract of agent to third party can be ratified by the principal)

- Ratification means to accept the contract
- In ratification, a principal becomes obligated for an unauthorized act done by an agent or
person posing as an agent
- Relates back to contract creation and binds the principal as if the agent has authority
- Ratification may be express or implied (FIRST RULE)
- 7 RULES TO RATIFICATION:
a. The act ratified must be one that was valid at the time it was performed
b. The principal must have been in existence at the time the agent acted
c. Agent must have indicated it was acting for a principal
d. Principal must have legal capacity at time of ratification
e. Principal must have knowledge of all the material facts pertaining to that
contract
f. Principal must ratify the entire act or contract
g. Principal must use same formalities required for the original contract

● Intervening Events for Ratification (cancelation of ratification)

- 3rd party withdrawal from the contract
 - 3rd party death or loss of capacity
- Principal’s failure to ratify within a reasonable time
- Where it would be inequitable (unfair) to bind the 3rd party

● Frontier Leasing Corp. v Links Engineering LLC

- Issue: Did Flemming have actual or apparent authority to enter into the contract on behalf
of Bluff Creek?
- Rules: Estoppel- The principal is liable if he (1) causes a third party to believe an
agent has the authority to act; or (2) has notice that a third party believes an agent
has the authority and does not take steps to notify the third party of the lack of
authority
- Issue: Can Bluff Creek claim it is not liable for the contract?

● Contract Liability of the Agent

- Is the principal known to the 3rd party? 4 RULES OF CONTRACT LIABILITY
a. Agent who represents a disclosed principal is not liable on contract made for
the principal
b. Agents are liable on contracts made for a partially disclosed principal unless
the parties agree otherwise
c. Agent is liable to 3rd parties on contracts made for an undisclosed principal
d. Agent is liable to 3rd parties on a contract made for a nonexistent principal
if the agent knew or had reason to know the principal does not exist
● Problem #5
- Lee Cain was liable under contract liability of the agent

2/13/23 Chapter 36 Continued

● Treadwell v. J.D Construction Co.
- Issue:Whether Jesse Derr can be held liable under the contract between Treadwell and JD
Construction?
- Rules: If the 3rd party knows or has reason to know the agent is acting for a principal, but
does not know or have reason to know the principal’s identity, the agent may be
responsible under the contract

● Liability of Agent by Agreement

-Agent may bind themselves to contracts they make for principal by expressly agreeing to be
liable
-An agent may expressly bind themselves by:
1. Making the contract in their own name
2. Joins in the contract as an obligor (obligated to perform and held liable for that part)
3. Acting as a surety or guarantor (like a cosigner)

● Implied Warranty of Authority

- Agent contracts for a competent and existing principal, but lacked authority and the
principal is not bound
 - Unfair to the 3rd party, so the agent is bound on a theory of implied warranty of authority
to contract
- UNLESS:
A. The 3rd party actually knows agent lack authority; or
B. Principal subsequently ratifies contract; or
C. Agent adequately notifies third party that agent does not warrant authority to
contract
● DePetris & Bachrach, LLP v Srour
- Really look at parties to understand what rules apply for exam

● Tort Liability of Principal

- Principal may be liable for a tort of its agent in four circumstances
1. Vicarious Liability (Respondeat Superior)
2. Direct Liability
3. Nonemployees
4. Misrepresentations
● Respondeat Superior
- An employer is liable for the torts committed by an agent:
a. Who are employees; and
b. Committed the tort while acting within the scope of the employment
- Scope of Employment 4 FACTORS (instead of 11 reid)
1. Of the kind of employee was employed to perform
2. Whether or not the act occurred substantially with in the authorized time
period that they work (9-5pm)
3. Occurred substantially within the location authorized to work
4. Motivated, at least in part, to serve the principal
- Would list Respondeat Superior, 11 Reid and Scope of Employment as 3 separate rules for the
exam

● Synergies3 Tec Services, LLC v Corvo

- Issue: Whether Synergies and/or DirecTV are vicariously liable for the actions of the
installers Mclaughlin and Castro?
- Rule: An employer may be held vicariously liable for the intentional tort of its employee
if the plaintiff shows evidence that:
1. The agents wrongful acs were within the scope of his employment
2. That the acts were in furtherance of the employer
3. The employer participated in, authorized, or ratified the acts

● Problem 9 is the principal is liable for an agent's torts IF IT SAYS HES AN EMPLOYEE THEN
DONT WORRY ABOUT IT

● Direct Liability
 - A principal is directly liable for an agent’s tortious conduct if the agent acts within her
actual authority or the principal ratifies the agents conduct

● Other Impositions of Liability

- Liability for Torts of Nonemployee agents not liable, unless
a. Retention of a nonemployee agent who is incompetent
b. Failure by the agent to perform duty of care
c. Agents negligence where there is inherently dangerous activity
- Liability for Agent’s Misrepresentations
a. A principal is directly liable for the misrepresentations of an agent if the principal
intended the misrepresentations OR the agent had authority to speak on the subject matter

● Tort Liability of the Agent

- Agents are liable for their own torts except when:
1. Exercising the privilege of the principal
2. Privileged to take certain action in defense or property
3. Making false misrepresentations without knowing falsity
4. Defective tools or instrumentalities

1F 2T 3T 4F 5T 6T

Chapter 51 Employment Law

● Worker’s Compensation
- Worker’s compensation protects only employees (not independent contractors)
- When applicable, worker’s compensation laws allow injured employees to recover under
strict liability
- Exclusive Remedy: Workers’ compensation is an employee’s exclusive remedy against an
employer for covered injuries (unless the employer acted intentionally)
- Types of Recovery:
1. Hospital and medical expenses
2. Disability benefits
3. Specified recoveries for loss of certain body parts
4. Death benefits to survivors or dependents
- Employees recover only for work related injuries; those injuries that:
1. Arise out of employment
2. Happen in course of employment

● American Greetings Corp v. Bunch

- Issue: Whether Sheila Bunch was acting within the scope of employment when she was
injured?
- Rule: An injury occurring during a recreational activity may be viewed as work related if:
 1. It occurs on the premises, during lunch or recreational period, as a regular
incident of employment; OR
2. The employer brings the activity within the orbit of the employment by
expressly or impliedly requiring participation OR
3. The employer derives substantial direct benefit by the activity beyond the
intangible(boosting the company’s reputation) benefit of health, morale, etc.
OR
4. The employer exerts sufficient control over the activity to bring it within the
orbit of employment

● Problem # 1
- Boston’s Gourmet pizza has to pay for a pre surgery that was needed due to employee
being overweight before they can pay workers comp to have his back fusion surgery

● OSHA
- Federal Occupational Safety and Health Act (1970)
- General Duty: Employers must provide their employees with a workplace and jobs free
from recognized hazards that may cause death or serious physical harm
- Enforcing Agency: Occupational Safety and Health Administration

2/20/2023 Chapter 51 Continued

● Family & Medical Leave Act/Families First Coronavirus Response

Act (FMLA)
- Family and Medical Leave Act (1993) covers those employed for over 12 months over
1250 hours by an employer employing 50 or more employees
- An employee may take a total of 12 workweeks of leave during any 12 month period for
one of several reasons
1. Birth of a child
2. Adoption of a child
3. Need to care for a spouse, child, or parent with a serious health condition
4. Employees own serious health condition
- Problem #8 Jill Beaver got acute sinusitis and bronchitis on vaca and she did not get hospitalized
or receive continued care from a physician means she lost the FMLA case against her employer,
so we need a more serious case of sickness. Her company did not violate the FMLA

● Wage Supplements
- Social Security (1935)
a. Funded by the Federal Insurance Contributions Act (FICA) which imposes a flat
percentage tax on employee income below a base figure and requires matching
amounts by employers to support programs
 - Social security
- Disability
- Medicare
b. Unemployment Compensation
- Funded by federal and state unemployment compensation taxes paid by
employers
- Each state administers under federal guidelines

● Wage Protections
a. Employee Retirement Income Security Act of 1974 (ERISA)
- Guarantee employee participation
- Record keeping, reporting, and disclosure requirements
- Pension fund managers have fiduciary responsibility
b. Fair Labor Standards Act (1935)
- Regulates wages & hours by entitling covered employees to
1. Specified minimum wage
2. Time and a half for work exceeding 40 hours per week
- Exemptions: executive, administrative, agricultural, fishing and professional personnel
- Prohibits oppressive child labor by any employer engaged in interstate commerce or
producing goods for such commerce

● Collective Bargaining & Union Activity (see slides)

● Employee Equality
- Equal Employment Opportunity Commission (EEOC)
a. Independent federal agency to enforce employment discrimination laws,
investigate allegations of discrimination, and interpret statutes by issues rules,
regulations, and guidelines
- Equal Pay of 1963
a. Amended FLSA forbids pay discrimination based on gender
b. Employee may not be paid a lesser rate than employees of opposite sex for equal
work
- Defenses the employer may raise if there is a disparity 4 RULES FOR EMPLOYEE EQUALITY
1. Seniority
2. Merit (can be paid differently for have extra certs or bringing more value to the
company)
3. Quality or quantity of production
4. Any other factor other sex (any other reason why they might be paid differently)

● Civil Rights Act of 1964: Title VII

- Prohibits employers from discriminating on the basis of race, sex, religion, or national
origin
 - Prohibits sexual harassment and discrimination because of pregnancy
- Covers all employers employing more than 15 people or employees engaging in an
industry that affecting interstate commerce
- If employer’s act violate Title 7 then person must file charge with EEOC within 180 days
- If private plaintiff or EEOC wins a Title 7 suit, the REMEDIES are:
1. Compensatory damages
2. Reasonable attorneys fees
3. Equitable relief

- Theories of Discrimination
a. Discrimination is refusing to hire, failing to promote, firing, or otherwise reducing a
person's employment opportunities for a person in a protected class (Race, color,
religion, sex, national origin)
b. Two Different Ways to Prove Discrimination:
- Disparate treatment
- Disparate impact

- Gaskell v. University of Kentucky (2010)

a. Issue: Whether Gaskell was discriminated against based on his religion?
b. Rules: For Disparate Treatment, it requires that unlawful discrimination was at least a
motivating factor in the employer’s actions; then the burden shifts to the defendant to
articulate some legitimate, non discriminatory reason for the rejection; then the burden
shifts to show the legitimate reasons were not true reasons, but were a pretext for
discrimination

- Title VII: Employer Defenses

a. Employer may prevail in a Title VII claim if it can prove a legitimate reason for
discriminatory act or practice based on:
1. Same decision defense
2. Seniority
3. Merit
4. BFOQ or bona fide occupational qualification (something necessary to perform
the job and to the business) AND cannot be a defense to race or religion

- Title VII: Categories of Discrimination

1. Race or Color
2. National Origin
3. Religion
4. Sex

- Bostock v. Clayton County, Georgia (2020)

a. Issue: Whether sex covers homosexuality and being transgender?
 b. Rules: The statute prohibits employers from taking certain actions because of sex;
because of is “by reason of”, it is established whenever a particular outcome would
not have happened “but for” the purported cause. USE BUT FOR ( if it had not been
for)
c. Issue: Is treating everyone the same discrimination?
d. Rules: An employer who intentionally treats a person worse because of their sex
discriminates against that person
IRAC but for
IRAC 4 defenses
IRAC all defenses are motivating factor

- Title VII: Sexual Harassment

a. Two major categories of sexual harassment are prohibited by Title VII:
1. Quid Pro Quo
2. Hostile work environment
b. If a plaintiff makes a prima facie claim for harassment, employer may avoid liability under
Ellerth/Faragher by showing:
1. Employer exercised reasonable care to prevent the alleged behavior
2. Plaintiff unreasonably failed to take advantage of preventative/ corrective opportunity

Johnson v. J. Walter Thompson USA (2016) (check book)

- Age Discrimination in Employment ADEA (1967)

a. Prohibits age-based discrimination against employees or job applicants at least 40 years
or older

3/6/2023 Chapter 37 Intro to Forms of Business & Formation of Partnerships

● Choosing a Form of Business

- Sole proprietorship
- Partnership
a. General, limited liability, or limited liability limited partnership
b. Only lawyers, accountants and architects must have an LLP as a partnership in
California
c. California does not allow LLLPs

- Corporation
a. Regular “C”, Subchapter “S”, nonprofit, benefit, professional
b. Shareholders own the interest of the company, and board of directors run the
business
 c. Own EIN and gets taxed at the corporate level
d. Professional corporation is licensed by the state

- Limited Liability Company

a. Professional
b. Combines corporation & partnership
c. members contribute capital to the business and is owned by them
d. Tax treatment same as partnership

- Problem #2 Which form of business?

a. The baseball team is clearly an LLC because 10 people invested all the capital to
purchase the business

● Partnerships
- RUPA definition (4 Elements):
not for use in every state but for this class its all we will use
1. Association of two or more persons
2. to carry on (actively engaged in something i.e. forming a business)
3. as co-owners (both owners, both making decisions and/or share profits)
4. a business for profit (making a profit or intend to)

- Key characteristics of RUPA: create with no formality, partners have unlimited liability, and the
partners share profits and losses

- Problem #4 Partnership?
a. Rick Yurko and the three women are a joint venture not a partnership so Yurko did not
need to split the money with them

- Rasmussen v. Jackson circa 2013

a. Issue: Whether there was a partnership formed between Jackson & Rasmussen?
b. Rule: A partnership is an association of two or more persons to carry on as co-owners a
business for profit
c. Must look at transactions separate to the relationship
d. Conclusion is that there is no partnership

- Problem #6 Partnership?
a. Don King & Scott Willson are partners, they agreed to share profits and made joint
decisions and both made contributions to the business either money or labor

● Purported Partners
a. Protects third parties
b. Is when you didn't know you formed a partnership
c. The Doctrine of Purported Partners is
 - If a third party proves one apparent partner misled them to believe the two or
more people were partners, the third party may sue the partner causing the
deception for damages suffered when the apparent partnership failed to perform
as agreed
- Not an actual partnership

- MP Nexlevel of Cal., Inc. v. CVIN circa 2014

a. Issue: Whether CENIC was a purported partner of CVIN such that it would be liable for
CVIN’s breach?
b. Rule: A purported partner is liable to the person whom the representation is made if
that person, relying on the representation, enters into a transaction with the alleged
partnership.
The conduct of the ostensible partner must be sufficient to induce a reasonable and
prudent person to believe that a partnership exists and for that person to enter into
a transaction in reliance on that belief

- Problem #8 Purported Partners?

a. George Lawler & John Claydon are purported partners because objectively they seemed
to be partners

● Partnership Capital and Property

- Capital=Equity
a. Cash
b. Property
- Loans does not equal Capital
- Distinguishing Partnership Property from Partner’s Property
1. Intent of the partner
2. Who paid for the property
3. How is title taken
4. Was title transferred
5. Who pays taxes
6. Who pays insurance
7. Who maintains and repair the property

- Finch v. Raymer circa 2013

a. Issue 1: Was there a partnership between Finch and Raymer?
b. Rule: Rupa
c. Issue 2: Whether the property purchased during the partnership is partnership property of
the individual property of the partner?
d. Rule: Property is presumed to be partnership property if acquired in the name of
the partnership or in the name of one or more partners with an indication in the
instrument transferring title to the property of the persons capacity as partner.
Property is presumed to be partnership property if purchased with partnership
assets and property not purchased with partnership assets and not taken in the
 name of the partnership is presumed to be separate property even if used for
partnership purposes.
e. Conclusion was that it was partner property

● Partner’s Partnership Interest

- Partnership interest includes partner’s rights
a. Transferable interest: partners share of profits and losses and right to receive
partnership distributions
b. Management and other rights

- Look at Transfers versus Charging Orders slide

a. Transfer of an Interest is voluntary
b. Charging Order is involuntary

3/13/23 Chapter 38 Operations of Partnerships and Related Forms

● General Duties of Partners to the Partnership and to Eachother

- RUPA- Fiduciary Relationship (7 Partner’s Duties to Partnership)
1. Duty to Serve (do what you are tasked to do to keep the partnership
running)
2. Duty of Care (do what you tasked to do well)
3. Duty to Act Within Actual Authority (only act within the bounds of the
partnership)
4. Duty to Account (spending money where it counts, do not spend it elsewhere
and keep accounting and records at the principal office of the partnership
and you must keep them at all times)
5. Duty to Maintain Confidentiality of Partnership Information (must keep
private records within the partnership)
6. Duty to Disclose Material Information (must tell partners all material facts
which are facts that are material to the partnership)
7. Duty to Avoid Interests Adverse to the Partnership (Example would opening
a side gig that directly competes with your partnership) but if you give them
full disclosure and they say it's okay for you to do this then your okay

- All of these except Duty to Care can be changed if given permission. Duty to Care cannot be
modified by the partnership
- Ann is in a partnership with Elkie so can she invest in her bfs auto shop? Yes it is okay, does not
violate any duties. Can she invest in her neighbors bar n grill? No because of Duty 7 because a
tavern and bar n grill are very similar

- Problem #4 Breach of fiduciary duty?

 a. Brosseau was taking money from the partnership for himself which is a breach of duty to
serve, duty to account, duty of actual authority

- What type of financial evidence is appropriate/ relevant when there is a breach?

a. Rule for the remedy available for breach of the duty to not have an interest adverse to a
partnership is When a partner wrongfully appropriates a prospective business
opportunity of his partnership to his own use, or that of another, the remaining
partners who are deprived of an opportunity to profit of the misappropriated
business opportunity may recover their share of the profits that the partnership
would have earned from the business opportunity.

● Compensation of Partners
- Unless there is an agreement to the contrary, partners share profits equally,
according to the number of partners, and not according to their capital
contributions or the amount that each devotes to the partnership
- Losses are shared in the same proportion as profits are shared

- Fish v. Tex. Legislative Serv., Partnership

a. Issue: Whether unanimous consent was required under Section 2.5 to pay compensation
to the working partners?
b. Rules:
1. Partners are not entitled to compensation for services performed on behalf
of the partnership.
2. Terms of the agreement govern any dispute concerning compensation
c. “partners mutually agree”

● Management Powers of Partners

- Actual Authority
c. Express: oral or written or written agreement (need words!)
d. Implied: Do whatever is reasonable to assume the principal wanted in light of the
express authority (reasonably assume)
4 factors for implied authority
- Express statement by principal
- Nature of the agency
-Acts reasonably necessary
-Acts customarily done
-Apparent Authority
b. Principal’s manifestation that cause a 3rd party to form a reasonable belief in authority

-Ratification is when a partner accepts an act as if there was authority after finds out that a partner did
an act without authority
 - Special Transactions (real property or credit)
a. An individual partner’s transfer of real property owned by the partnership will bind the
partnership if expressly, impliedly, or apparently authorized, or ratified by the ownership
b. An individual partner may not borrow money in a partnership’s name without express,
implied, or apparent authority

● Disagreements Among Partners

- Default Rule: In general, management decisions in the ordinary course of business
are by majority rule, one vote per partner, unless otherwise agreed by express
agreement
- If not in the ordinary course of business, need unanimous consent or 100% of votes, for
example:
a. A decision to expand (not ordinary course of business)
b. Bringing in another partner (not ordinary course of business)
c. Modifying a management agreement, such as limiting or expanding authority or
creating classes of partners with special or weighted voting rights (not ordinary
course of business)

● Liability for Torts and Crimes

- Respondeat Superior is the rules but partners not principal and agent
- Who is suing or being sued
a. Joint is all the partners are suing
b. Severally

3/27/2023 Chapter 39 Partner’s Dissociation and Partnership Dissolution and Winding Up

● Dissociation (One Partner Leaves Partnership)

- RUPA is a change in relation of the partners caused by any partner ceasing to be
associated in the carrying on of the business
- A partner has the power but not necessarily the right to dissociate from the partnership at
any time
- Transferring a partnership to someone else is not a dissociation
- Withdrawal Rules
a. Nonwrongful Dissociation
1. Death
2. Withdrawal at any time from a at-will partnership
3. Withdrawal w/ in 90 days after another partners death, incapacity,
wrongful dissociation
4. Withdrawal in accordance with the terms of the partnership agreement
(completion of the term or undertaking)
5. Occurrence of an event agreed to in the partnership agreement
6. Expulsion of a partner
7. Assignment for the benefit of creditors
 8. Appointment of a guardian/conservator

b. Wrongful Dissociation-violates the partnership agreement

1. Withdrawal that breaches an express provision in the partnership agreement
2. Withdrawal before end of the term or completion of its undertaking
3. Filing a bankruptcy or being debtor in bankruptcy
4. Judicial expulsion which includes the next 3:
5. Wrongful conduct that adversely affects the partnership
6. Willful and persistent breach of fiduciary duties
7. Conduct which makes it unreasonable to conduct business with the partner

- Dissociation of an at-will partnership is wrongful when it was a particular undertaking or the

partner leaves when there is a definite term

● Dissolution (Dissolving the Partnership)

- Dissociation may lead to dissolution, not a foregone conclusion
- RUPA allows a business to continue after a partner’s dissociation
- Important to determine whether the partnership is “at will”
a. Partnership is at-will unless it has a particular undertaking or the partner leaves
when there is a definite term

- At-will is when there is no real definitive plan in motion or written agreement between partners
- No particular undertaking or leaves when there is a definite term

● Winding Up (Dissolution Begins the Winding Up Process)

- Implied Authority (anything reasonably necessary to finish the business)
a. winding up partner has implied authority to do those acts appropriate for winding
up the partnership business and apparent authority to conduct business as the
partner did prior to dissolution
- Apparent Authority
a. To eliminate apparent authority of a winding up partner, the partnership must:
1. Make sure the third party knows or has reason to know the partnership
has been dissolved
2. Third party received dissolution notification by delivery to its place of
business
3. Dissolution has come to the attention of the third party
4. Partner filed a “statement of dissolution” with the secretary of state's
office and 90 days later the company is fully known to be dissolved

- All events on page 81 for events causing dissolution and winding up except 7,8,9 and can be
changed in a partnership agreement to not cause dissolution or winding up
- 7,8,9 MUST result in dissolution and winding up
- During winding up, you must fulfill your obligations to your existing contracts but you cannot
make any new contracts (Implied Authority) Power to do acts that appropriate for winding up the
partnership business

● Distribution of Assets
- After the partnership assets have been sold during the winding up, proceeds are
distributed to those who have claims against the partnership
a. Creditor claims are satisfied first (including those from partners)
b. Credited (increased) to a partner’s capital account for partner’s share of profits
c. Charged (decreased) to a partner’s capital account for partner’s share of losses

- After partnership assets have been distributed, termination of partnership occurs automatically
- Creditors can be those who have loaned money to the partnership and they can be paid when
other creditors of the partnership are paid
- After the claims of the creditors have been paid, the remaining proceeds from the sale of the
partnership assets will be distributed to the partners according to the net amounts in their capital
accounts for their shares of profits
- Partnership isn't terminated until there is no more money in the business meaning its been
completely distributed
- Balance out capital accounts before splitting profits to partners

● Continuing the Business (Continuing After One Partner Leaves)

- Partners may choose not to seek dissolution and winding up after dissociation of a partner
- If the partnership continues, the partnership is required to purchase the dissociated
partner’s partnership interest (pay them out and within 120 days unless otherwise stated
in agreement ) unless it's wrongful
- If wrongful then you don't have to pay them out until the partnership is terminated
- Dissociated partners have liability for obligations incurred while a partner unless they
have novation
a. You can get novation if both partners and creditors release the dissociated partner
from liability on partnership debt and obligations

● Partners Joining an Existing Partnership

- The partnership agreement generally states terms under which a new partner is admitted
to a partnership
- In the absence of an agreement, RUPA sets rules for partner’s admission, rights, and
duties upon admission
a. A new partner is fully liable for all partnership obligations incurred after
admission as partner, but no liability for obligations incurred before
admission as partner
b. (LLP specific) A new partner in an LLP incurs no liability for any LLP
obligations, whether incurred before or after admission, beyond new
 partner’s capital contribution unless new partner committed malpractice or
other wrong (and incurs personal liability)

Test knowledge 1. F its winding up 2. F not required 3. F its dissociation 4. F must pay creditors
first 5. T 6. F

4/3/2023 Chapter 40 Limited Liability Companies, Limited Partnerships, and Limited Liability
Limited Partnerships

● Limited Liability Companies (LLC)

- Organizer filed Articles of Organization with the states Secretary of State
- Articles must include:
a. LLC name (with the designation Limited Liability Company or Limited
Company or LLC)
b. Duration
c. Name and address of its registered agent
d. Indicate whether member-managed or manager-managed

- Tax Treatment of an LLC

a. Options for Federal Taxation
1. Partnership
2. S Corp
3. C Corp

- Management and Member Liability

1. The members determine who the managers will be
a. Member-managed: The members designate themselves as the managers, all
members are managers
b. Manager-managed: The members designate someone else as the managers

- Members have limited liability, unless:

1. Signed in a personal capacity
2. Members are only liable for their capital contributions
3. Committed a tort while acting for the LLC

- Hecht v. Andover Assoc. Mgmt Co. (Circa 2010)

a. I: Whether the business judgment rule relieved Andover Management from liability?
b. R: Business Judgment Rule: protects managers who made a good faith decisions in
corporate processes (Duty to care)

- Ownership and Distributions

a. LLC member interests are transferable but
1. Limited to distributional interests (not management authority)
 2. Transferee is not automatically a member until all other members agree
3. Operating Agreement may limit the right to transfer

- Dissociation & Dissolution

a. A member has the power to dissociate by withdrawing from the LLC at any time
b. When an LLC dissolves, any member who has not wrongfully dissociated may wind up
the business

- Problem #6
a. Was it a wrongful or nonwrongful dissociation (it was because of bankruptcy)
b. Chapman is wrongfully dissociated because he filed for bankruptcy
c. Comer is the sole remaining member and he's a manager has the right to sell the land

- McDonough v. McDonough

● Limited Partnership (LPs)

- ULPA of 2001 is the comprehensive statement of limited partnership law
- Two distinct classes of partners:
a. General Partners is liable for unlimited liability
b. Limited Partners is liable for limited liability up to capital contribution

- Moser v Moser
a. I1: Whether the LP gifts to the children were completed?
b. I2: Whether the LP assets were marital property?
c. R1:

- Rights and Liabilities of LP Partners

a. Capital contributions
b. Profits and losses split by capital accounts unlike general partnerships where its 50/50
c. Voting rights changing the power of general partners, allowing the general partners to
receive compensation, adjusting fiduciary duties
d. Admission
e. Transferable Interests

- Problem #8 Virginia Partners Ltd.

a. If you fail to register as an LP in a different state it doesn't mean you can't be an LP in a
different state
b. If you are validly registered as an LP in any one state then you can be recognized as an
LP in any other state

- Dissociations and Dissolution

a. A partner dissociates upon: Death, Withdrawal, Expulsion
b. Dissociated general partner remains liable on a limited partnership obligation incurred
while a partner unless the creditor agreed to release liability
 c. Dissociation does not automatically trigger dissolution just like in general partnership
d. Dissolution automatically triggers winding up

- Lach v. Man O’ War, LLC

a. I1: Whether the restructuring of the LP to the LLC was a conversion?
b. I2: Whether the GP’s breached their fiduciary duties?

- Test Knowledge 1. T 2. T 3. F 4. F 5. F 6. T

Chapter 41 History and Nature of Corporations (MAY 8TH IS FINAL REVIEW SESSION)

● Classifications of Corporations
- By purpose
1. For-profit corporations
2. Not-for-profit corporations (only has members)
3. Government corporations
4. Benefit corporations aka social purpose corporations (do good for society)

- By Ownership
1. Publicly held (shareholders)
2. Close (few shareholders under 100 shareholders)
- Subchapter S
3. Government- owned

- By Origin
1. Domestic-the state of incorporation
2. Foreign- all other states in which the company operates
3. Alien- all countries other than where incorporated

- Most will be close subchapter S for-profit corporations

Characteristics of Corporation:
- Free transferability
- Ability of corporation to raise large amounts of capital
- Limited liability of owners
- Corporation has life outside of owners
- Separations of owners from management

● Regulations of For-Profit and Not-For-Profit Corporations

- State laws that regulate business activities are constitutional (provided they do not unduly
burden or obstruct interstate commerce)
1. It serves a legitimate state interest
2. It is the least burdensome means of promoting that interest; and
 3. That legitimate state interest outweighs the burden on interstate commerce

● Regulations of Foreign and Alien Corporations

- Subjecting foreign and alien corporations to suit
- Taxation of foreign corporations
- Qualification of intrastate business (intrastate means in the state)
- Regulation of internal affairs
a. Regulation is based in state where majority of your business occurs

- A state may require a foreign or alien corporation to qualify to do business within the state to obtain a Certificate
Of authority
- Not Doing Business includes:
1. Soliciting orders (by mail or employees)
2. Selling through independent contractors
3. Owning property for investment purposes
4. Conducting an isolated transaction completed within 30 days
5. Maintaining a bank account for collection purposes
- Doing Business includes:
1. Contracts related to local business or sales
2. Owning/using real property for business
3. Maintaining stock for order fulfillment
4. Performing service activities
5. Maintaining an office for intrastate business
6. E-commerce sales sufficient to require collection of sales tax

- Drake Manufacturing Inc. v. Polyflow Inc.

a. Issue: Does Drake standing to sue in Pennsylvania
b. Rule: A foreign corporation must obtain a certificate of authority in order to sue or seek any remedies
in a specific state in which it is doing business
c. Application: It was not doing business in the state of Pennsylvania, it was simply collecting debt
d. CA: Drake had an office in PA; regularly did business in PA (dozens of transactions over 8 month
period) multiple transactions all taking place in PA
- LOOK AT PROBLEM #4 GOOD CHANCE WE WILL BE TESTED ON MINIMUM
CONTACT RULE

● Piercing the Corporate Veil

- Giving liability to shareholders of a corporation
- Two requirement must exist:
1. Domination of a Corporation by its shareholders AND
2. Domination used for an improper purpose (defraud creditors, evading existing
obligation, or circumventing a statue)
 - Supply Chain Assoc. LLC v. ACT Electronics Inc
a. I: Weather supply chain assoc LLC could pierce the corporate veil of ACT Electronic Inc
to make all affiliates liable?
b. There are 12 factors to consider when determining whether to pierce the corporate
veil (Domination/First Element)
1. Common ownership
2. Pervasive control
3. Confused intermingling of business activity assets or management
4. Thin capitalization
5. Non observance of corporate formalities
6. Absence
7. No payment of dividends
8. Insolvency at the time of the litigated transaction
9. Siphoning away of corporate assets by the defendant shareholders
10. Nonfunctioning of officers and directors
11. Use of the corp for transactions of the dominant shareholders
12. Use of the corporation in promoting fraud

- Problem number 8 Domination and improper purpose

Chapter 42 Organization and Financial Structure of Corporations

● Promoters and Pre Incorporation Contracts

- Each state has enacted laws detailing how a corporation may be created
- The promoter of a corporation incorporates the business, organizes the initial
management team, ans raises initial capital
- Liable for contracts made during the pre incorporation period unless the corporation
adopts those contracts made by the promoter and the third party agreed to substitute the
corporation for the promoter

- SmithStearn Yachts v. Gyrographic Communications

a. I: Whether SmithSterns Yachts Inc. can enforce the contract made in the name of
SmithStern Yachts, LLC?
b. R: Generally, a corporation is not bound by any contact made prior to its existence, A
contract in the name of a not yet formed corporation can be enforced after the corporation
is organized on the principal of ratification
c. R: Ratification is defined as the affirmance by a person of a prior act which did not bind
him but which was done or professedly done on his account. Ratification requires the
acceptance of the results of the act with an intent to ratify and with the full knowledge of
all the material circumstances. Ratification may be implied
 ● Pre Incorporation Share Subscriptions
- Preincorpation Share Subscriptions are contracts where a prospective shareholder offers
to buy a specific number of shares in a new corporation at a stated price
- Lasts 6 months

● Incorporation
1. Prepare Articles of Incorporation
2. Sign and authenticate the articles of incorporation
3. File the articles with the secretary of state and pay applicable fees
4. Receive file articles back
5. Hold organizational meeting to adopt bylaws, elect officers, and transact other business
6. File an annual report with the secretary of state and pay annual franchise fee/tax

● Defective Incorporation
- De Jure Corporation
a. Substantial compliance with each mandatory requirements to incorporate the
business (all 7 elements of incorporation)
b. The validity of the corporation can only be attacked by the state of incorporation
for noncompliance

- De Facto Corporation
a. Substantial compliance with most mandatory requirements to incorporate the business
b. The validity of the corporation can be attacked by the 3rd party, itself, the state of
incorporation
c. Estoppel is a defense

- Krupinski v. Deyesso
a. I: In what capacity did Deyesso enter into the contract with Krupinski to be a manager of
a club?
b. R: A promoter is an individual who makes a contract on behalf of an entity that lacks
capacity to enter into a contract itself; it is a question of fact to be determined by the trier
of fact

Chapter 44 Shareholder’s Rights and Liabilities MAY 15TH IS FINAL AT 8 PM

● Shareholder Meetings
- State statutes and the MBCA require annual meetings of shareholders to be held
- Special Meetings of shareholders may be held whenever a corporate matter arises that
requires immediate shareholders action
 - Notice of meetings must be given to shareholders or record (entitled to vote) as of date
fixed by the board of directors
- Quorum of outstanding shares must be represented at meeting by shareholders
- Majority of votes cast at shareholders meeting will decide issues put to a vote
- Shareholder’s Election of Directors
a. Straight voting (give your shares to any of the directors as a casted vote)
b. Class voting (each separate class like A,B,C class can vote in a director)
c. Cumulative voting (protects minority shareholders by giving them their shares
multiplied by how many directors that are being voted in and thats how many
you will have to vote with)

- Shareholder Control Device

a. Voting trusts (written agreement in voting shares pooled by shareholders to gain greater
voting power)
b. Shareholder voting agreements (no time limitation like voting trust and it's a written
agreement on how to specifically vote)
c. Proxies (revocable agreement where someone votes your shares for you)

- Reynolds Health Care Services v. HMNH Inc.

a. Issue: Whether there was a voting agreement or proxy given to Reynolds?
b. Rule: Proxies are revocable by a shareholder “unless the appointment form conspicuously states
that it is irrevocable and the appointment is coupled with an interest. An appointment couple with
an interest includes the appointment of a party to a voting agreement

● Fundamental Corporate Changes (Things to be Voted On)

- Amendment
- Merger
- Consolidation (like a merger but a new corporation comes of both old ones, one and two
now become just one)
- Share Exchange (one corporation is bought by another and becomes a subsidiary, they get
all shares of old company)
- Sale of all or substantially all of assets
- Dissolution (liquidate the assets and satisfy the creditors then shareholders)

● Dissenter’s Rights
- In general, those who oppose an approved action have little recourse
- Dissenter’s rights or Rights of Appraisal have been created to protect dissenters by
requiring corporation to pay dissenting shareholders fair market value of their shares
a. Many states and the MBCA exclude shares traded on a recognized securities
exchange
● Shareholder’s Inspection and Information Rights
- Corporate managers resist shareholder’s inspecting corporate books and records, but most
state corporation statutes specifically grant shareholders inspection rights
- Shareholders have the right to receive important information about the corporation, such
as financial statements, including a balance sheet, an income statement, and a statement
of changes in shareholders equity

- United Techs. Corp v. Treppel

a. Issue: Whether Treppel has an unlimited right of inspection?
b. Rule: There is an underlying principle that the stockholder’s inspection right is a
“qualified one; the court has wide discretion to shape the breadth and use of inspections
to protect the legitimate interests of corporations

● Preemptive Rights
- Corporation law recognizes importance of giving a shareholder option (or preemptive
right) of maintaining value of their shares and retaining their proportionate interest in the
corporation
- A preemptive right gives the shareholder an option to subscribe to a new issuance of
shares in proportion to the shareholder’s current interest in the corporation

● Distribution to Shareholders
- Shareholders may receive distributions of the corporation’s assets, generally in the form
of cash, stock or property dividend
a. Declared by the board of directors and paid on the date set by the directors
b. Once declared, dividends are debts of the corporation and shareholders may sue
to force payment of dividends
c. Preferred shares generally have a set dividend rate stated in the articles of
incorporation

- Dodge v. Ford Motor Co.

a. Issue: Whether Dodge can compel a special dividend?
b. Rule: The directors of a corporation, and they alone, have the power to declare a dividend
of the earnings of the corporation, and to determine its amount. Courts will not interfere
in the management of the directors unless…. They refuse to declare a dividend when the
corporation has a surplus of the net profits which it can, without detriment to the
business, divide among its stockholders, and when refusal to do so would amount to such
an abuse of discretion as would constitute a fraud, or breach of that good faith that they
are bound to exercise toward the shareholders.

- Problem #8 Calculating the Dividend

a. BLUE CO. 200000 in assets minus 160000 in liabilities is 40000 and that amount minus
15000 in liquidation preference is 25000 in dividends to be dispersed
● Shareholder Lawsuits
- Shareholder has a right to sue in his own name to prevent or redness a breach of a
shareholder's contract
- If several shareholders have been similarly affected by a wrongful act, a shareholder may
bring a class action on behalf of all affected shareholders
- If a corporation was harmed by another’s actions , the right to sue belongs to the
corporation
a. A shareholder has no right to sue even if the shareholder’s investment is impaired
b. However, one or more shareholders may bring a derivative action for the benefit
of the corporation if directors failed to pursue a corporate cause of action

- Zapata Corp v. Maldonado

a. Issue: When, if at all, should an authorized board committee be permitted to cause
litigation, properly initiated by a derivative stockholder in his own right, to be dismissed?
b. Rule: After an objective and thorough investigation of a derivative suite, an independent
committee may cause its corporation to file a motion to dismiss the derivative suit, if:
1. There is a finding of the independence and good faith of the committee and the
bases supporting its conclusions
2. The court finds, applying its own independent business judgment, the motion
should be granted after carefully considering and weighing the corporate interests

● Shareholder Liability
- A shareholder may be liable to the corporation if:
a. Shareholder receives dividends or distributions with knowledge of their liability
b. Defective attempts to incorporate and piercing the corporate veil provide a basis
to hold a shareholder liable for corporate debts beyond a capital contribution
c. Selling shares for a premium over fair market value of minority shares is due to a
wrongful act or omission
d. Controlling shareholder breaches a fiduciary duty to control the corporation in a
fair, just, and equitable manner that benefits all shareholders proportionately

- Majority shareholders have a duty to be impartial, and not prefer themselves over minority
shareholders

- Mitchell Partners LP v. Irex Corp.

a. Issue: Could Mitchell Partners LP stop the merger?
b. Rule: Majority shareholders have a duty to protect the interests of the minority
c. Rule: Freezing out the of minority holders with the purpose of continuing the business for
the benefit of the majority holders is a violation of the fiduciary duty owed to minority
shareholders by the majority shareholders
 ● Member’s Rights and Duties in Nonprofit Corporations
- A members rights and duties are defined by ability of members to use corporation’s
facilities or consume its output, and by their obligations to support enterprise periodically
with their money or labor
- All members equal unless bylaws state otherwise
- With few exceptions, rules for nonprofit corporation meetings, voting, and inspection are
similar to rules of corporations for profit
- A nonprofit corporation generally is prohibited from making any distribution of assets to
members
- A member may resign or be expelled at any time
- Members have a limited right to bring a derivative action on behalf of the corporation
- May be dissolved by directors and shareholders (voluntary and involuntary)

Chapter 45 5/8/2023
● Securities Regulations
- Purposes of the Securities Act of 1933 and the Exchange Act of 1933
1. Require disclosure of meaningful information about a security and its issuer to
allow investors to make intelligent investment decisions
2. Impose liability on those who make inadequate and erroneous disclosures of
information
3. Regulate insiders, professional sellers of securities, securities exchanges, and
other self-regulatory securities organizations

- Securities are any investment of money in a common enterprise with an expectation to turn a profit
from the efforts of others
- Securities Act of 1933 regulates sales of securities while they pass from the hands of the issuer into the
hands of public investors
- Two principal regulatory components are:
1. Registration process : pre filing period, waiting period, post effective period and now younon d
can sell securities
2. Liability Provisions: not everyone has to register if you are exempt, like a government or 3 year
drafts

- Exchange Act of 1934 requires periodic disclosure of material information by issuers with publicly held
equity securities
Final Exam Review 5/8/2023 MAY 15TH IS FINAL AT 8 PM

- If its been on a previous exam its not likely to be on the final exam
- 2 IRACs per prompt

To Study:
- Creating the Agency Two elements
- Non delegable obligations
- Agents Authority as Expressed by the Principal, both actual and apparent authority
- Hypothetical 1 focuses on Actual & Apparent Authority both Principal (Mario) and Agent (Fred)
1. First IRAC would actual then second would be apparent between Mario and Credit Card
Company (3rd party)
- Terminating the Agency
- Fiduciary Duties of Agent to Principal (7 duties) (not likely to be on the exam)
- Fiduciary Duties of Principal to Agent (compensate, indemnify, Reimburse)
- Contract Liability of a Principal
- Estoppel
- Ratification (7 requirements)
- Contract Liability of an Agent (4 rules)
- Tort Liability of a Principal
- Respondeat Superior
- Direct Liability
- Nonemployee Agents
- Misrepresentations by Agents
- Tort Liability of an Agent (bears breach of tort liability)
- Employees (11 Reid Factors) (not likely to be on the test)
- Employee Protections (workers comp, OSHA, FMLA) (not likely to be on the test) Chapter
51
- Civil Rights Act of 1964: Title VII
- Sexual Harassment: Title VII
- Hypothetical 2 focuses on Sexual harassment: Title VII
1. First IRAC is there Prima Facie (give phils argument) and second would be defenses to
sexual harassment (phil would argue thre wasnt as defense) if the first IRAC proves no
case then you dont need to prove defenses in the second IRAC

- Assets of a Business Entity (7 Total)

- State Regulations Chapter 43
- Hypothetical 3 focuses on State Regulations
1. First IRAC focuses on minimum contacts, certificate of authority
- Partnerships - General Principals
- LLCs - General Principals
- Corporations - General Principals
- Hypothetical 4 focuses on Piercing the Corporate veil
1. Two corporations means two IRACs (separate one for each)
- Partnership - Fiduciary Duties (7 duties)
- LLCs - Fiduciary Duties (now members member managed manager managed) (7 duties)
- Corporations - Fiduciary Duties (7 Duties)
- Partnerships - Sharing of Profits and Losses
- LLCs - Sharing of Profits and Losses
- Corporations - Dividends & Distributions
- Corporations - Derivative Actions
- Partnerships - Dissociation, Dissolution, Winding Up, and Termination
- LLCS - Dissolution…^
- Corporations - Dissolution… ^