Agency, Partnership, and the Llc: The Law of Unincorporated Business Enterprises

by Hynes, J. Dennis; Loewenstein, Mark J.

• ISBN13: 9780820557496
• ISBN10: 0820557498
• Edition: 6th
• Format: Paperback
• Copyright: 2003-06-01
• Publisher: Lexis Nexis Matthew Bender

Table of Contents

Preface	v
Acknowledgements	vii
Summary Table of Contents	ix
Glossary	xxvii
Introduction The Law of Unincorporated Business Enterprises	1	(1)
The Corporation	1	(2)
The Different Forms of Unincorporated Businesses	3	(6)
The Sole Proprietorship	4	(1)
The Business Trust	5	(1)
The Partnership	6	(1)
The Limited Liability Partnership (LLP)	7	(1)
The Limited Partnership	7	(1)
The Limited Liability Limited Partnership (LLLP)	8	(1)
The Limited Liability Company (LLC)	8	(1)
The Agency Relationship; The Ambiguous Principal Problem; Subagency	9	(26)
The Agency Relationship	10	(7)
Carrier v. McLlarky	10	(1)
Notes	11	(6)
Agency or Sale	17	(2)
Hunter Mining Laboratories, Inc. v. Management Assistance, Inc.	17	(2)
Notes	19	(1)
Agency and the Law of Trusts	19	(3)
Notes	21	(1)
Agent or Escrow Holder	22	(2)
Notes	23	(1)
Dual Agency; The Ambiguous Principal	24	(5)
The Dual Agency Rule	24	(1)
Notes	25	(1)
The Ambiguous Principal Problem	26	(1)
Norby v. Bankers Life Co	26	(2)
Notes	28	(1)
Subagency	29	(2)
Notes	30	(1)
The History of Agency, and Other Matters	31	(1)
Problems	32	(3)
Rights and Duties Between Principal and Agent	35	(26)
Duties of Principal to Agent	36	(6)
Duty of Exoneration and Indemnification	36	(1)
Admiral Oriental Line v. United States	36	(1)
Notes	37	(2)
Duty to Pay Compensation	39	(1)
Notes	40	(1)
Duty of Care	41	(1)
Worker's Compensation Legislation	41	(1)
Duty to Deal Fairly and in Good Faith	42	(1)
Duties of Agent to Principal	42	(16)
Duty of Good Conduct and to Obey	43	(1)
Duty to Indemnify Principal for Loss Caused by Misconduct	43	(1)
Duty to Account	44	(1)
The Fiduciary Duties of Agents	44	(1)
Commencement of Fiduciary Relationship	44	(1)
Duty of Care	45	(1)
Notes	45	(1)
Duty of Disclosure	46	(1)
Notes	47	(1)
Duty of Loyalty	47	(1)
Loyalty during the relationship	48	(1)
Gelfand v. Horizon Corp.	48	(3)
Notes	51	(3)
Post-termination competition	54	(1)
Notes	55	(2)
Notes	57	(1)
Problems	58	(3)
Vicarious Tort Liability	61	(56)
The Master-Servant Relationship	61	(44)
The Concept	61	(1)
Jones v. Hart	61	(1)
Notes	62	(2)
Is an Employment Relationship Necessary to Respondeat Superior Liability?	64	(1)
Heims v. Hanke	65	(1)
Notes	66	(1)
Rationale for Respondeat Superior	67	(1)
Arguments questioning the theory	68	(1)
Arguments in favor of, or explanations for, the theory	69	(1)
Imputed Contributory Negligence	70	(1)
Limitation to Losses Caused by Tortious Behavior	70	(1)
Direct Tort Liability of an Employer	70	(1)
The Independent Contractor Exception	71	(1)
The Concept	71	(1)
Notes	72	(2)
Limitations to the Independent Contractor Exception	74	(1)
Hixon v. Sherwin-Williams Co.	74	(2)
Notes	76	(4)
Borrowed Servants	80	(1)
Charles v. Barrett	81	(1)
Notes	82	(2)
The Scope of Employment Limitation	84	(1)
Negligent Acts	84	(1)
Joel v. Morison	84	(1)
Notes	85	(1)
Re-entry	86	(1)
Disobedience of instructions	87	(1)
Conduct of a personal nature	87	(1)
Intentional Torts	88	(1)
Bremen State Bank v. Hartford Accident & Indemnity Co.	89	(1)
Note	90	(1)
Judith M. v. Sisters of Charity Hospital	90	(1)
Note	91	(1)
The assault on Restatement (Second) of Agency § 228(1)(c)	91	(1)
Lisa M. v. Henry Mayo Newhall Memorial Hospital	92	(2)
Notes	94	(3)
Restatement (Second) of Agency § 219(2)(d)	97	(1)
Costos v. Coconut Island Corp	97	(3)
Note	100	(1)
Nichols, II v. Land Transport Corp.	101	(2)
The implied contract theory	103	(1)
Note	104	(1)
Punitive damages	104	(1)
Non-physical torts	105	(1)
The Unincorporated Nonprofit Association Relationship	105	(8)
Liability of the Members	106	(1)
Liability of the Association to Its Members	106	(1)
Hanson v. Saint Luke's United Methodist Church	107	(6)
Vicarious Liability by Estoppel	113	(1)
Problems	113	(4)
Contractual Powers of Agents	117	(34)
Authority	117	(8)
Express Authority	117	(1)
King v. Bankerd	117	(4)
Notes	121	(2)
Implied Authority	123	(1)
Delegation of Authority	123	(1)
Incidental Authority	123	(1)
Authority in the Restatement	124	(1)
Apparent Authority	125	(11)
Smith v. Hansen, Hansen & Johnson, Inc	125	(3)
Notes	128	(3)
Sauber v. Northland Insurance Co.	131	(2)
Notes	133	(3)
Estoppel	136	(5)
Hoddeson v. Koos Bros	136	(2)
Notes	138	(3)
The Inherent Agency Power Concept	141	(6)
The Concept	141	(1)
The Rationale for the Concept	141	(1)
Croisant v. Watrud	142	(4)
Notes	146	(1)
Problems	147	(4)
Fraudulent Acts of Agents	151	(20)
The Unscrupulous Agent	151	(6)
Entente Mineral Co. v. Parker	151	(4)
Notes	155	(2)
Limits to Liability for Fraud	157	(4)
Notes	158	(3)
The Exculpatory Clause	161	(7)
Eamoe v. Big Bear Land & Water Co.	161	(2)
Dembowski v. Central Construction Co.	163	(2)
King v. Horizon Corp	165	(3)
Problems	168	(3)
The Undisclosed Principal	171	(24)
Rights of the Undisclosed Principal	171	(8)
Assertion of Rights by the Undisclosed Principal	172	(1)
Parol Evidence Rule	173	(1)
Exceptions	174	(1)
Kelly Asphalt Block Co. v. Barber Asphalt Paving Co.	174	(2)
Finley v. Dalton	176	(1)
Notes	177	(2)
Liabilities of the Undisclosed Principal	179	(7)
Authorized Transactions	179	(1)
Remedies of the Third Party	179	(1)
The Election Rule	179	(2)
Unauthorized Transactions	181	(1)
Watteau v. Fenwick	181	(2)
Notes	183	(3)
Payment and Setoff	186	(6)
Payment by the Third Party	186	(1)
Payment to the Third Party	187	(1)
Setoff	188	(1)
Branham v. Fullmer	188	(1)
Oil Supply Company, Inc. v. Hires Parts Service, Inc.	189	(3)
Problems	192	(3)
Liability of the Agent to Third Persons	195	(14)
Liability on the Contract	195	(8)
Liability When the Principal is Unintentionally Undisclosed	195	(1)
Jensen v. Alaska Valuation Service	195	(1)
Notes	196	(1)
Liability When the Principal is Disclosed: Special Circumstances	197	(1)
Notes	198	(2)
Liability When the Principal is Partially Disclosed	200	(1)
Van D. Costas, Inc. v. Rosenberg	200	(1)
Notes	201	(2)
The Agent's Warranty of Authority	203	(3)
Notes	204	(2)
Harm to the Economic Interests of Others	206	(1)
Note	206	(1)
Liability In Tort	207	(1)
Problems	207	(2)
The Doctrine of Ratification	209	(20)
The Concept	209	(8)
Evans v. Ruth	209	(2)
Dempsey v. Chambers	211	(1)
Justification for the Concept	212	(1)
Notes	213	(2)
Implied Ratification	215	(1)
Manning v. Twin Falls Clinic & Hospital, Inc.	215	(1)
Notes	216	(1)
The Knowledge Requirement	217	(2)
Computel, Inc. v. Emery Air Freight Corp.	217	(2)
Can Silence Constitute Affirmance?	219	(5)
Bruton v. Automatic Welding & Supply Corp	219	(4)
Notes	223	(1)
The No Partial Ratification Rule	224	(1)
Changed Circumstances	225	(2)
Notes	225	(2)
Problems	227	(2)
Notice and Notification; Imputed Knowledge	229	(16)
Introduction	229	(1)
Notification	229	(2)
Imputed Knowledge	231	(2)
Notes	232	(1)
The Adverse Interest Qualification	233	(4)
Farr v. Newman	234	(3)
The Sole Actor Doctrine	237	(5)
Munroe v. Harriman	238	(3)
Notes	241	(1)
Problems	242	(3)
Termination of the Agency Relationship	245	(10)
Termination Between the Parties to an Agency Relationship	245	(5)
Termination by Will	245	(1)
Some Consequences of Termination of an Agency Relationship	246	(1)
Irrevocable Powers Phrased in Agency Terms	246	(1)
Termination by Operation of Law	247	(1)
Death	247	(1)
Hunt v. Rousmanier's Administrators	247	(1)
Notes	248	(1)
Loss of Capacity	249	(1)
Notes	249	(1)
Notice of Termination to Third Parties	250	(3)
Termination by Will	250	(1)
Termination by Operation of Law	251	(2)
Problems	253	(2)
The Creation of a Partnership	255	(30)
Introduction	255	(1)
The Limited Liability Partnership (LLP)	255	(2)
The Partnership Relationship Defined and Distinguished From Other Relationships	257	(11)
An Early Test of Partnership	258	(1)
Partnership as Mutual Agency	258	(1)
The Uniform Partnership Act (1914) and the Revised Uniform Partnership Act (1997)	259	(3)
Notes and Questions	262	(1)
Martin v. Peyton	263	(3)
Notes	266	(2)
The Underlying Theory of Partnership---Aggregate Or Entity?	268	(5)
Fairway Development Co. v. Title Insurance Co. of Minnesota	270	(2)
Notes	272	(1)
Income Tax Considerations---A Brief Summary	273	(1)
Contributions of Property to the Partnership	273	(8)
Ambiguities Concerning Ownership of Particular Property	273	(1)
Notes and Questions	274	(1)
The Special Matter of Title to Real Property	275	(1)
The Property Rights of a Partner	276	(1)
Note	277	(1)
Putnam v. Shoaf	277	(3)
Notes	280	(1)
Problems	281	(4)
The Operation of a Partnership	285	(84)
Contractual Powers of Partners	285	(15)
Actual Authority	285	(1)
Summers v. Dooley	286	(1)
National Biscuit Co. v. Stroud	287	(2)
Notes	289	(1)
Apparent Authority	289	(1)
Burns v. Gonzalez	289	(4)
Notes	293	(2)
Partner Liability by Estoppel	295	(1)
Is There a Duty to Speak?	296	(2)
The Reliance Conundrum	298	(1)
Notes	299	(1)
Tort Liability for the Wrongs of Partners	300	(5)
In General	300	(1)
Tort Liability of Partnership to an Injured Partner: The Co-Principal Doctrine	301	(1)
Notes	302	(1)
The Fraudulent Partner	302	(2)
Notes	304	(1)
The Nature of a Partner's Liability---Joint as Opposed to Joint and Several Liability	305	(1)
Suits Against the Partnership	306	(1)
Suits by the Partnership	307	(1)
Notice and Notification to the Partnership	307	(1)
Keeping Track of Things---A Brief Look at Partnership Accounting	308	(1)
Rights and Duties Among Partners	308	(48)
Fiduciary Duties	308	(1)
The Duty of Loyalty	309	(1)
Duty during formation of partnership	309	(1)
Corley v. Ott	309	(1)
Note	310	(1)
Pre-empting business opportunities	311	(1)
Meinhard v. Salmon	311	(3)
Notes	314	(2)
Leaving the business	316	(1)
Gibbs v. Breed, Abbott & Morgan	317	(11)
Fiduciary duties and freedom of contract	328	(1)
Singer v. Singer	328	(2)
Notes	330	(1)
The Duty of Care	331	(1)
The Duty of Full Disclosure	331	(1)
Walter v. Holiday Inns, Inc.	332	(2)
The Duty of Good Faith and Fair Dealing	334	(3)
Notes	337	(1)
Bohatch v. Butler & Binion	338	(10)
Cadwalader, Wickersham & Taft v. Beasley	348	(5)
Note	353	(1)
The Right to an Accounting	353	(1)
Suits Among Partners	354	(1)
Notes	355	(1)
Claims by Creditors of the Partnership	356	(2)
Rights Against Partnership Assets	356	(1)
Rights Against the Personal Assets of Individual Partners	357	(1)
Claims by Personal Creditors of a Partner Against the Partnership Interest of the Partner	358	(8)
Tupper v. Kroc	359	(4)
Notes	363	(1)
Bauer v. Blomfield Co. / Holden Joint Venture	363	(3)
Problems	366	(3)
Dissociation of a Partner and Dissolution of a Partnership	369	(46)
Liquidation Rights	370	(4)
Dreifuerst v. Dreifuerst	370	(3)
Note	373	(1)
Causes of Dissolution Under UPA and RUPA	374	(13)
Dissolution at Will	375	(1)
Page v. Page	375	(3)
Notes	378	(2)
Wrongful Dissolution	380	(1)
Notes	381	(1)
Horizon / CMS Healthcare Corp. v. Southern Oaks Health Care, Inc	382	(5)
Notice of Dissolution and Termination of Authority Among Partners	387	(1)
Termination of Authority	387	(1)
Notice of Dissolution---Lingering Apparent Authority	387	(1)
Note	388	(1)
Continuing the Business	388	(11)
Continuation Clauses	388	(1)
Hunter v. Straube	388	(2)
Notes	390	(2)
Liability of an Incoming Partner	392	(1)
Liability of a Withdrawing Partner	393	(1)
Redman v. Walters	393	(1)
Creditors' Claims	394	(1)
Rights of a Retired Partner or the Estate of a Deceased Partner When the Business is Continued	395	(2)
Notes	397	(2)
Winding up; Liquidation; Terminating the Business	399	(13)
Winding up and Liquidation	399	(1)
Resnick v. Kaplan	400	(2)
Note	402	(1)
Marr v. Langhoff	402	(2)
Kennedy v. Kennedy	404	(1)
Ohlendorf v. Feinstein	405	(2)
Termination	407	(1)
The Judicial Sale	408	(1)
Prentiss v. Sheffel	408	(2)
The Losing Venture: Claims Among Partners	410	(2)
Notes	412	(1)
Problems	412	(3)
The Limited Partnership	415	(60)
Historical Background	418	(1)
Organizational Defects	419	(6)
Briargate Condominium Ass'n v. Carpenter	420	(5)
The Limited Partner	425	(33)
The Control Question	425	(1)
In General	425	(1)
Holzman v. de Escamilla	425	(1)
Note	426	(1)
Gateway Potato Sales v. G.B. Investment Co.	427	(4)
Pitman v. Flanagan Lumber Co.	431	(1)
Note	432	(1)
Control of the Corporate General Partner	432	(1)
Zeiger v. Wilf	432	(8)
Removal of the General Partner	440	(1)
Obert v. Environmental Research & Development Corp	440	(1)
Note	441	(1)
Obert v. Environmental Research & Development Corp	442	(2)
Notes	444	(1)
Suits by Limited Partners	445	(1)
Notes	446	(1)
Limitations on Distributions and Transfer of Interests	447	(1)
Duties of Limited Partners	448	(1)
KE Property Management, Inc. v. 275 Madison Management Corp	448	(3)
Note	451	(1)
Mandatory Capital Contributions: The Voting Rights of Limited Partners and the Relationship of the Partnership Agreement to the Partnership Certificate	452	(1)
Rights of Personal Creditors of Limited Partners	453	(1)
Baybank v. Catamount Construction, Inc.	453	(5)
The General Partner	458	(14)
Appletree Square I Limited Partnership v. Investmark, Inc.	458	(3)
Notes	461	(2)
Gotham Partners, L.P. v. Hallwood Realty Partners, L.P.	463	(6)
Notes	469	(3)
Problems	472	(3)
The Limited Liability Company	475
Introduction	475	(2)
Tax Matters	477	(1)
The Kintner Regulations	477	(1)
The Check-the-Box Regulations	477	(1)
Securities Laws Issues	478	(1)
The Creation of an LLC	479	(13)
C & J Builders and Remodelers, LLC v. Geisenheimer	479	(3)
Elf Atochem North America, Inc. v. Jaffari	482	(7)
Meyer v. Oklahoma Alcoholic Beverage Laws Enforcement Commission	489	(3)
Note	492	(1)
The Entity Theory and the LLC	492	(11)
Litchfield Asset Management Corporation v. Howell	492	(6)
Notes	498	(1)
Abrahim & Sons Enterprises v. Equilon Enterprises, LLC	499	(3)
Notes	502	(1)
The Operation of an LLC	503	(30)
The Management of an LLC	503	(1)
Broyhill v. DeLuca	503	(4)
Authority and Apparent Authority of Members	507	(1)
Taghipour v. Jerez	507	(4)
Notes	511	(1)
Fiduciary Duties of Members	512	(1)
McConnell v. Hunt Sports Enterprises	513	(6)
Notes	519	(1)
VGS, Inc. v. Castiel	520	(5)
Notes	525	(1)
The Interest of a Member in an LLC	525	(1)
Claims Among Members	526	(1)
Limitations on Distributions	526	(1)
Transferability of Interests	526	(1)
Exit Privileges	526	(1)
Expulsion of a Member	527	(1)
Walker v. Resource Development Company Limited, L.L.C.	527	(5)
Claims of Creditors of Members	532	(1)
Inspection of Books and Records	533	(1)
Dissolution of an LLC	533	(2)
Hurwitz v. Padden	533	(2)
Note	535	(1)
Problems and Questions	535
Table of Cases	1	(1)
Index	1