The Law of Agency and Partnership

by Gregory, William; Reuschlein, Harold Gill

• ISBN13: 9780314238580
• ISBN10: 0314238581
• Edition: 3rd
• Format: Hardcover
• Copyright: 2001-07-01
• Publisher: West Academic

Summary

This text covers information regarding the Revised Uniform Partnership Act (RUPA) that has been adopted by about half of the states, and other developments, such as the Limited Liability Partnership (LLP), have significantly changed partnership law. Basic agency concepts have been persuasive in shaping the development of statutory liabilities, especially in the area of sexual harassment, and the influence of agency law will only increase in the coming years, as work proceeds on a Third Restatement of Agency.

Table of Contents

Preface to the Third Edition	iii
Preface to the Second Edition	v
Preface to the First Edition	vii
Westlaw Overview	ix
PART 1. AGENCY
Elements of the Agency Relation	2	(31)
Scope and Purpose of Agency	2	(2)
Definitions	4	(6)
Legal Situations Resulting From the Agency Relation	10	(3)
The Agent Is a Fiduciary	13	(1)
The Incidence of Control	14	(1)
Classification of Principals and Agents	15	(2)
Principals---Is Disclosure of the Principal Important?	15	(1)
The Fully Disclosed and the Unidentified Principal	15	(1)
The Undisclosed Principal	16	(1)
Classification of Agents	17	(4)
In General	17	(1)
The General Agent and the Special Agent, an Imprecise Distinction	17	(1)
Basis for the Distinction	18	(1)
Servants and Other Agents	18	(1)
Independent Contractors	18	(1)
Servant and Non-Servant Agents	19	(1)
Sub-Agents and Sub-Servants	19	(2)
What Acts May Be Delegated?	21	(2)
Public Policy; Criminal Acts	21	(1)
Delegation by the Non-Agent Contractor	22	(1)
Delegation by Agents and Other Fiduciaries	22	(1)
The Sub-Agent	23	(1)
Capacity	23	(2)
Capacity of the Principal	23	(1)
Capacity of the Agent	24	(1)
What Agency Is Not	25	(4)
The Agency Relation and Remedial Action	29	(4)
Actions Legal and Equitable	29	(1)
Matters of Procedure and Proof	30	(3)
The Authority and Power of Agents	33	(48)
Creation of Agency	34	(1)
Power and Authority Distinguished	34	(2)
``Real'' or ``Actual'' Authority	36	(6)
The Creation of Real Authority	37	(2)
Types of Actual Authority	39	(1)
Express Authority	39	(1)
Incidental Authority	40	(1)
Authority by Necessity (Emergency)	41	(1)
Status of the Spouse	42	(1)
Implied Authority	42	(4)
Managing Investments	46	(1)
The Real Estate Agent	47	(3)
The Real Estate Agent	47	(2)
The Agent Authorized ``to Sell''	49	(1)
Duration of Authority	50	(1)
Apparent Authority to Sell Land	50	(1)
Agent to Sell Chattels	50	(3)
Generally	50	(1)
The Auctioneer	51	(1)
The Factor	52	(1)
The Travelling Salesman	52	(1)
The Salesman in the Store	53	(1)
Limitations on Sales Agent's Authority	53	(1)
The Sales Agent's Apparent Authority	53	(1)
Authority to Warrant	53	(2)
Generally	53	(1)
The Special Agent	53	(1)
The General Agent	54	(1)
Authority to Collect	55	(2)
The Lawyer	57	(3)
Travel Agent	60	(1)
Authority to Delegate	61	(3)
Generally	61	(1)
Authorized Delegation; Its Consequences	62	(1)
Delegation---When Permitted	63	(1)
Apparent Authority	64	(8)
The Estoppel Theory	64	(1)
The Objective Contract Theory	65	(1)
The Types and Incidents of Apparent Authority	66	(5)
Fraud	71	(1)
Instructions	72	(2)
Estoppel	74	(3)
Inherent Agency Power	77	(4)
Ratification	81	(14)
Topic 1. Requirements
In General	81	(1)
The Act or Transaction	82	(1)
Who Can Ratify	82	(1)
Conditions Necessary to Ratification	83	(1)
What Must the Ratifier Do?	84	(3)
Ratification of Torts	87	(1)
Manifestation of Ratification	87	(2)
Intervening Events	89	(2)
Forgery---Uniform Commercial Code	91	(1)
Topic 2. Liabilities
Effect of Ratification	91	(1)
Estoppel	92	(1)
Adoption, Novation and Restitution	93	(2)
Termination of Agent's Powers	95	(18)
Termination by Act of the Parties	95	(1)
Agreement by the Parties in Advance	96	(1)
The Undertaking Performed	96	(1)
The Agent Performs	96	(1)
Another Performs	96	(1)
Mutual Consent to Terminate	97	(1)
Revocation by the Principal	97	(1)
Renunciation	98	(1)
Termination by Operation of Law	98	(6)
In General	98	(1)
The Incidence of War	99	(1)
Termination by Death of the Principal	99	(1)
Termination by Death of the Agent	100	(1)
Loss of Capacity of the Principal	100	(2)
Loss of Capacity of the Agent	102	(1)
Termination by Change in Circumstances	102	(2)
The Original Situation Restored	104	(1)
Effect of Termination of Authority on Other Powers	104	(6)
Inherent Agency Power	104	(1)
Apparent Authority	105	(1)
The General Agent	106	(2)
The Special Agent	108	(1)
The Sub-Agent	109	(1)
Irrevocable Authority	110	(3)
Contract Not to Revoke	110	(1)
Power Coupled With an Interest	111	(2)
Master And Servant	113	(16)
Nature of the Relationship	113	(1)
Principal and Agent	113	(1)
Master and Servant	114	(1)
Employer and Independent Contractor	114	(3)
Respondeat Superior	117	(6)
Control	122	(1)
The Borrowed Servant	123	(1)
Criminal Responsibility	124	(1)
Duties of the Master to the Servant	125	(2)
Rights of the Master Against Third Persons	127	(2)
Notice And Knowledge	129	(9)
Notice	129	(3)
In General	129	(1)
Notification to Agent or Principal	130	(2)
Knowledge	132	(1)
Imputed Knowledge, Its Fictional Character	133	(1)
Benefit to Principal of Agent's Knowledge	134	(1)
Duration	134	(1)
Limitations on the Technique of Imputed Knowledge	135	(2)
The Corporate Officer and Director	137	(1)
Knowledge of Principal	137	(1)
Duties Of Agent To Principal	138	(17)
Principal and Agent---A Contractual Relation	138	(1)
Duties Implied	139	(1)
The Agent as Fiduciary	140	(2)
The Duty of Loyalty	142	(2)
The Duty of Obedience	144	(1)
Remedies of the Principal	144	(1)
Breach of Contract by Agent	145	(1)
Actions in Tort	146	(1)
Actions for Misuse of Property	146	(2)
The Duty to Make Restitution	148	(1)
Rescission	148	(1)
Accounting	149	(1)
Denial of Compensation	149	(1)
Discharge	149	(1)
Agent Defending Claim Against Principal	150	(1)
Liability of Agent for Conduct of Other Agents	150	(1)
Defenses of the Agent	150	(5)
Incapacity	150	(1)
Illegality	151	(1)
Statutes of Fraud	152	(1)
Ratification, Affirmance, Approval	152	(1)
Contributory Fault of the Principal	153	(1)
Rights of Third Parties---Bailment	153	(1)
Conflicting Interests	154	(1)
Other Defenses	154	(1)
Duties Of Principal To Agent	155	(22)
In General	155	(1)
Duty to Provide Opportunity to Serve	156	(1)
Duty to Keep Accounts	157	(1)
Duty of Good Conduct	157	(1)
Duration of Employment	158	(3)
Duty to Compensate for Services	161	(3)
In General	161	(1)
How Much Compensation?	162	(2)
Remedies of the Agent	164	(2)
General Remedies	164	(1)
The Agent's Lien	164	(2)
Reimbursement and Indemnity	166	(2)
Reimbursement	166	(1)
Indemnity	167	(1)
Stoppage	167	(1)
Principal's Defenses in Contract	168	(2)
The Statute of Frauds	168	(1)
Illegality	168	(1)
Disloyalty and Disobedience	169	(1)
Tort Liability	170	(3)
Principal's Liability to Agent in Tort	170	(1)
Liability of the Master to Servant in Tort	171	(1)
The Fellow Servant Rule	171	(2)
Defenses in Tort	173	(2)
Contributory Negligence	173	(1)
Assumption of Risk	174	(1)
Workers' Compensation	175	(2)
Duties Of Principal To Third Party	177	(12)
Contracts and Conveyances	177	(1)
Three Types Of Principals	177	(1)
Authorized Transactions	178	(4)
When Principal Is Disclosed or Partially Disclosed	178	(1)
When Principal Is Undisclosed	179	(1)
Simple Contracts	180	(1)
Sealed Instruments	180	(1)
Where A Writing Is Required	181	(1)
Negotiable Instruments	181	(1)
Restitutional Liability	182	(1)
Apparent Authority as Basis for Liability	182	(1)
Liability for Unauthorized Acts---General and Special Agents	183	(1)
Notice of Limitation of Authority	184	(1)
Authorization Respecting Debts	185	(1)
Entrusting Agent With Chattels, Documents and Negotiable Paper	186	(2)
Principal's Defenses	188	(1)
Duties Of Third Person To Principal	189	(13)
Topic 1. Liability In Contract
Disclosed or Partially Disclosed Principal	189	(1)
Defenses	190	(1)
Events Subsequent	191	(1)
The Undisclosed Principal	191	(2)
Non-disclosure of Principal---Important?---The Normal Situation	193	(1)
Fraud in Failing to Disclose	193	(1)
Where Concealment Is Privileged	194	(1)
Performance by Undisclosed Principal	195	(1)
Agent's Control Over the Contract	195	(1)
Res Judicata and Judgments	196	(1)
Topic 2. Tort Liability
Interference With Principal's Interest	197	(1)
Interference With Duty of the Agent	197	(1)
Employment of Agent of Other Contracting Party	198	(1)
Interference With Performance of Contractual Duties of the Agent	199	(1)
Defenses	200	(1)
In Contract	200	(1)
In Tort	200	(1)
The Incidence Of Consent	200	(1)
Liability for Restitution	200	(2)
In Tort	200	(1)
Breach of Contract	201	(1)
Neither Tort Nor Breach of Contract	201	(1)
Duties Of Agent To Third Party	202	(20)
Agent as Party to Contract	202	(3)
Misrepresentation of Authority by the Agent	205	(5)
In General	205	(1)
The Representation---Nature	206	(2)
Exculpatory Statements	208	(1)
Misrepresentation, Fraud, or Negligence	208	(1)
Misrepresentation---Non-tortious	209	(1)
Damages	210	(1)
The Agent's Defenses	210	(1)
Property Received for the Principal From Other Parties	211	(3)
In General	211	(1)
Superior Rights	212	(1)
The Agent at Fault	212	(1)
Agent When Party to the Contract	212	(1)
Property Received Upon Condition	212	(1)
Agent, Not at Fault or Not a Party	213	(1)
Change of Position	213	(1)
Property Received for Third Party	214	(1)
Tort Liability, In General	214	(2)
Misrepresentation	216	(1)
Conversion	217	(1)
The Innocent Converter	217	(1)
What Acts Constitute Conversion	218	(1)
Trespass to Land	218	(1)
Negligence	219	(1)
Negligent Activity	219	(1)
Agent Exercising Control	219	(1)
Nonperformance of Duties to Principal	220	(1)
Liability to and for Other Agents	220	(1)
Failure to Act---Economic Loss	221	(1)
Subsequent Events	221	(1)
Duties of Third Party to Agent	222	(6)
Contract Actions by Agent	222	(1)
Agent as Party Promisee	223	(1)
Agent as Assignee	223	(1)
Agent as Owner	224	(1)
Possessory Actions	224	(1)
Defenses to Actions by Agent	225	(1)
The Agent Protecting His Own Interests	225	(3)
In Contract	225	(1)
In Tort	226	(2)
Common Law Rules and Statutory Modifications	228	(27)
Topic 1. Common Law Rules
In General	228	(1)
Principal's Liability in Tort to Agent	229	(1)
Master's Liability in Tort to Servant	229	(1)
Master's Responsibility for His Own Negligence	230	(1)
Master's Duty as to Place of Work	230	(1)
Qualifications	231	(1)
Master's Duty as to Appliances, Tools, etc.	232	(1)
Master's Duty as to Employment of Other Servants	233	(1)
Master's Duty as to Rules, Regulations and Supervision of Servants	234	(1)
Classification of Servants	234	(1)
The Fellow Servant Rule	235	(1)
Application of the Fellow Servant Rule	236	(2)
The Superior Servant Rule	238	(1)
The Vice-Principal	239	(1)
The Master's Nondelegable Duties	240	(1)
Assumption of Risk	240	(2)
Abrogation of the Doctrine of Assumption of Risk	242	(1)
Contributory Negligence	243	(1)
Topic 2. Statutory Modification of Common Law Rules
Employer's Liability Acts	244	(2)
Federal Employer's Liability Act	246	(2)
Other Federal Statutes	248	(1)
Workers' Compensation Acts	248	(1)
Scope of the Workers' Compensation Acts	249	(1)
Comparison to Employers' Liability Acts	250	(1)
Effect on Common Law Remedies	250	(1)
Motor Vehicle Acts	251	(1)
The Family Purpose Doctrine	252	(1)
Acceptance of the Family Purpose Doctrine	253	(1)
Rejection of the Family Purpose Doctrine	254	(1)
The Sole Proprietorship	255	(5)
In General	255	(5)
PART 2. THE PARTNERSHIP AND OTHER UNINCORPORATED BUSINESS UNITS
The Partnership---Yesterday and Today	260	(25)
Origins of the Uniform Partnership Act	260	(2)
The Elements of Partnership---Definition	262	(7)
Classification of Business Transaction	269	(2)
Mutual Agency	271	(1)
Profit Sharing; Liability Consequences	271	(3)
Profit Sharing As Payment of Debt	271	(1)
Profit Sharing As Wages of An Employee or Rent to a Landlord	272	(1)
Profit Sharing as an Annuity to a Widow of Representative of a Deceased Partner	273	(1)
Profit Sharing as Interest on a Loan	273	(1)
Profit Sharing as Consideration for the Sale of Goodwill of a Business or Other Property	274	(1)
Persons Who May Become Partners	274	(2)
Partnership Names and Filing Requirements	276	(1)
Coverage of the Uniform Partnership Act	277	(2)
Entity versus Aggregate Theory	279	(2)
Partnership versus Corporate Forms	281	(2)
Governing Law	283	(1)
Conversions and Mergers	284	(1)
Relations Between Partners	285	(27)
The Partner as Agent	285	(5)
The Partner's Right to Indemnity	290	(2)
The Partner's Duty of Care	292	(2)
The Partner's Right to Compensation	294	(2)
Management of the Business; Majority Rule and Equal Rights	296	(2)
The Partner as Fiduciary: In General	298	(4)
The Duty to Disclose	302	(1)
The Duty to Account	303	(4)
The Duty to Keep Books and Render Information	307	(1)
Suits Between Partners	308	(2)
Actions at Law	308	(1)
The Partner in Equity	308	(2)
The Partner as Employee; Workers' Compensation	310	(2)
Relations of Partners to Those Dealing With the Partnership	312	(33)
Topic 1. Contract Liability
Partner's Liability as Agent	313	(1)
Transactions for Apparently Carrying on the Partnership Business	314	(3)
Exercise of Particular Types of Authority	317	(2)
The Sealed Instrument	317	(1)
The Equal Dignity Rule	318	(1)
Contracts Made in Individual Name or Names	319	(3)
In General	319	(1)
Extraordinary Transactions	320	(1)
Assignment of Partnership Property in Trust for Creditors or on Assignee's Promise to Pay Debts of the Partnership	320	(1)
Disposition of The Good Will of the Business	320	(1)
Any Other Act Which Would Make It Impossible to Carry on the Ordinary Business of the Partnership	320	(1)
Confession of Judgment	321	(1)
Submission to Arbitration or Reference	321	(1)
Estoppel (Purported Partners)	322	(1)
Admissions	323	(1)
Notice	324	(3)
Ratification	327	(1)
Topic 2. Tort And Criminal Liability
Introductory	328	(1)
Tort	328	(4)
Crime	332	(1)
Estoppel Under Tort Liability	333	(1)
Topic 3. Enforcement of Rights And Liabilities
Nature of Partnership Liability	334	(1)
Limited Liability Partnerships (LLP)	335	(1)
Procedural Considerations	336	(7)
Introductory	336	(2)
Common Name Statutes	338	(1)
Joint Debtor Statutes	339	(1)
Service of Process on a Partnership	339	(1)
Execution of Judgments Against Partnerships	340	(1)
Release of One Partner	341	(1)
Effect of Judgment Against a Partner	342	(1)
Death of a Partner	342	(1)
Set-Off and Counterclaim	343	(1)
Extraterritorial Enforcement Of Judgments Against A Partnership	343	(1)
Charging Orders	343	(2)
Partnership Property	345	(22)
In General	345	(1)
Topic 1. Legal Title To Partnership Property
In General	346	(1)
At Common Law	347	(2)
Under the Uniform Partnership Act	349	(1)
Topic 2. Firm Property And Separate Property
The Parties' Intention	350	(1)
Evidence of Intent	351	(1)
Purchase With Partnership Assets	352	(1)
Use, Ownership and Possession of Property	353	(2)
Title Recordation	355	(1)
Special Types of Partnership Property	355	(3)
Stock Exchange Seats	355	(1)
Insurance Policies	356	(1)
Leases	357	(1)
Patent Rights	357	(1)
Trademarks, Trade Names and Trade Secrets	357	(1)
Topic 3. Real Property
Capacity to Take Title to Real Estate	358	(1)
Before the Adoption of the Uniform Partnership Act	359	(1)
Under the Uniform Partnership Act	360	(1)
Doctrine of Equitable Conversion	361	(1)
Before Adoption of the Uniform Partnership Act	362	(1)
Under the Uniform Partnership Act	362	(2)
Topic 4. Good Will
In General	364	(1)
Nature of Good Will as an Asset	364	(2)
Good Will Within a Professional or Nontrading Partnership	366	(1)
Dissolution and Termination---Solvent Organizations	367	(15)
Definitions---Dissolution, Termination, Winding Up	368	(3)
Dissociation Under RUPA	371	(1)
Partner's Right to Liquidation	372	(3)
Causes of Dissolution	375	(7)
Dissolution by Expiration of Term or Completion of Particular Undertaking	375	(1)
Dissolution by Unanimous Consent	376	(1)
Dissolution by Expulsion Pursuant to Agreement	376	(1)
Dissolution Because of Illegality	377	(1)
Dissolution by Death of a Partner	377	(1)
Dissolution Because of Bankruptcy of a Partner	377	(1)
Dissolution in Contravention of the Partnership Agreement	377	(2)
Dissolution Because of Insanity or Disability of a Partner	379	(1)
Dissolution Due to Misconduct or Breach of Partnership Agreement	379	(2)
Dissolution by Reason of Inability to Carry on Business Except at a Loss	381	(1)
Dissolution By Assignment	381	(1)
Retirement and Admission of Partners	382	(2)
Consequences of Dissolution	384	(19)
Effect of Dissolution on Authority of Partners	384	(1)
Power of Partner to Bind Partnership to Third Persons After Dissolution	384	(2)
Effect of Dissolution on Partner's Existing Liability of Persons Continuing the Business in Certain Cases (Section 41 of the U.P.A.)	386	(2)
Incorporation of the Business (Section 36 of the U.P.A.)	388	(2)
Rights of Partners Inter Se on Dissolution	390	(1)
Rights of Partners Inter Se When Dissolution Caused in Contravention of the Partnership Agreement	390	(1)
Continuation of Partnership's Business	391	(6)
Rights of Retiring Partners or Estate of Deceased Partner When the Business Is Continued	391	(4)
Computation of the Partner's Interest Under Section 42 of the U.P.A.	395	(2)
Rules for Distribution	397	(1)
Death of a Partner	398	(2)
Right to Wind Up	400	(1)
Continuation of a Partnership Business (Under Section 23 of the U.P.A.)	401	(1)
Rights Where Partnership Is Dissolved for Fraud or Misrepresentation	401	(2)
The Insolvent Partnership---Bankruptcy	403	(22)
In General	403	(2)
The Problem of Defining What Constitutes a ``Partnership''	405	(2)
The Partnership as an Entity	407	(1)
Voluntary and Involuntary Bankruptcy	408	(1)
Involuntary Petitions	409	(1)
Partnership Insolvency	410	(2)
Death of a Partner	412	(1)
Venue, Order for Relief, and Discharge	413	(1)
Venue	413	(1)
Order For Relief	413	(1)
Discharge	413	(1)
Administration of Assets	414	(6)
The Jingle Rule: The Doctrine of Marshalling Assets Under The Bankruptcy Act	414	(5)
Identification of Partnership Assets and Individual Assets	419	(1)
Proof of Claims	420	(1)
Trustees in Bankruptcy	420	(3)
Limited Partnerships	423	(2)
Special Forms of Partnership	425	(31)
Implied Partnerships	425	(5)
Implied In Fact	425	(1)
Implied In Law	426	(4)
Mining Associations	430	(5)
The Mining Partnership	430	(4)
The Grubstake Partnership	434	(1)
The Limited Partnership	435	(8)
The Partnership Association	443	(2)
The Joint Venture	445	(7)
Sub-partnerships	452	(2)
The Limited Liability Limited Partnership (LLLP)	454	(2)
Some Devices to Reduce Risk	456	(30)
Introduction	456	(1)
Topic 1. The Creation of Special Powers
In General	457	(7)
Agreements to Continue---Techniques and Pitfalls	464	(3)
Between the Partners	464	(1)
Agreement Between Survivor and Heirs for New Partnership	465	(1)
Agreement Granting Survivor Option to Buy Deceased Partner's Interest	466	(1)
Agreement for Survivor to Purchase Deceased Partner's Interest	466	(1)
Testamentary Plans	467	(2)
Provision for Continuance of Business In Will	467	(1)
Testamentary Direction to Form Partnership With Heirs	468	(1)
Testamentary Provision for Sale to Survivor	469	(1)
Buy-Sell Agreements	469	(6)
Other Problems With Continuation Agreements	475	(2)
Replacement by Executor	477	(1)
Replacement of Deceased Partner	477	(1)
Conversion to Limited Partnership	477	(1)
Topic 2. Insurance
In General	478	(4)
Payment of Purchase Price	482	(1)
Beneficiary	482	(2)
Payment of Life Insurance Premiums	484	(2)
Other Unincorporated Forms	486	(23)
Again, the Matter of Risk Reduction	487	(1)
Topic 1. Joint Stock Companies
In General	487	(1)
Nature and Attributes	488	(1)
Distinguished From Partnership	489	(1)
Distinguished From Corporation	490	(1)
Articles of Association	491	(1)
Termination and Dissolution	491	(1)
Topic 2. Business Trusts
In General	492	(1)
Nature and Attributes	492	(1)
Distinguished From Partnership	493	(1)
Distinguished From Corporation	494	(1)
Creation	495	(1)
Powers and Duties of Trustees	496	(1)
Liability of Trustees	496	(1)
Liability of Beneficiaries (Certificate Holders)	497	(1)
Statutory Regulation	498	(1)
Taxation	499	(1)
Termination and Dissolution	499	(1)
Topic 3. Professional Associations and Corporations
In General	500	(1)
Origin of the Professional Corporation	501	(1)
Current Status	502	(1)
The Kintner Regulations	503	(1)
Tax Advantages	503	(1)
Topic 4. Defectively Organized Corporations
In General	504	(1)
Requisites of De Facto Existence	505	(1)
Powers, Rights and Liabilities of the Defectively Organized Corporation	505	(1)
Status and Liability of Members	506	(1)
Unqualified Foreign Corporations	507	(2)
Limited Liability Companies	509	(98)
APPENDICES
Table A. Uniform Partnership Act	515	(2)
Table B. Uniform Limited Partnership Act (1916)	517	(1)
Table C. Revised Uniform Limited Partnership Act (1976) WIth the 1985 Amendments	518	(2)
App. A. Uniform Partnership Act	520	(17)
App. B. Uniform Limited Partnership Act	537	(13)
App. C. Revised Uniform Limited Partnership Act (1976) With 1985 Amendments	550	(22)
App. D. Uniform Partnership Act (1997)	572	(35)
Appendix: Westlaw Research	607	(18)
Table of Cases	625	(60)
Index	685