Agency, partnership, and corporate law concepts tested on the bar exam.
40 cards · basic cards · AI-written, checked twice. Edit anything.
- What are the three types of agent authority?
- Actual authority (express or implied), apparent authority, and authority by estoppel.
- An agent acts with express actual authority when doing what?
- Acting within the scope of authority explicitly granted by the principal, whether oral or written.
- Does implied actual authority require written documentation?
- No. Implied authority arises from the principal's conduct and the customs of the industry, not from written grant.
- What is apparent authority based on?
- What a reasonable third party would believe about the agent's authority based on the principal's manifestations.
- Can a principal be liable for an agent's tortious acts?
- Yes, under respondeat superior, if the tort occurs within the scope of employment and the agent is an employee (not independent contractor).
- When is an agent liable on a contract to a third party?
- When the agent lacks authority or fails to disclose the principal, or if the principal is undisclosed or partially disclosed.
- What is the key requirement for partnership formation under the UPA?
- An association of two or more persons to carry on as co-owners a business for profit.
- What are the default liability rules for general partners?
- Each general partner is jointly and severally liable for all partnership debts and torts.
- Can a partner transfer their partnership interest without the consent of other partners?
- A partner can transfer their economic interest (distributions), but not their management rights, without consent.
- When is a dissociating partner liable for partnership debts incurred after dissociation?
- The partner is not liable for debts incurred after dissociation, but remains liable for debts incurred before, unless the partnership was dissolved.
- What is the fiduciary duty that partners owe to each other?
- The duty of care (to act in accordance with partnership agreement and not engage in gross negligence), duty of good faith and fair dealing, and duty of loyalty (no self-dealing).
- How are profits and losses allocated in a partnership by default?
- Equally among all partners, regardless of capital contributions, unless the partnership agreement provides otherwise.
- What is required to form a corporation?
- Filing articles of incorporation with the state, which creates a separate legal entity.
- What is the shareholder liability rule?
- Shareholders are liable only up to their investment (limited liability); they are not liable for corporate debts.
- When will a court pierce the corporate veil?
- When the corporation is a mere instrumentality used to commit a fraud, promote injustice, or circumvent existing legal obligations, and equity requires piercing.