AGENCY PProblems - US Law

7/23/2019 AGENCY PProblems - US Law

1/30

AGENCY & PARTNERSHIP PROBLEMS & ANSWERS for ROSINCOURSEBOOK

PROBLEM 1.1 (pg. 14) The Firm a! i"# A$e"# a! Ser%a"#

While swimming behind a boat in Peacefl !alle" La#e in Misso$i% Bnting died of acte ca$bon mono&idepoisoning. Me$c$" Ma$ine% 'nc manfact$ed the boats moto$. nde$ Misso$i law% Me$c$" Ma$ine ma" besed eithe$ in the cont" in which the accident happened% o$ in an" othe$ cont" in which it *#eeps an office o$

agent fo$ the t$ansa&n of its sal and cstoma$" bsiness.+ Me$c$" Ma$ine has no office in ,t. Lois% bt -eale$sells its boat moto$s in that cit". Me$c$" Ma$ine appointed -eale$ as its *atho$ied deale$ fo$ the $etail sale%displa"% and se$/icing+ of its p$odcts. nde$ the ag$eement btwn them0(a) Me$c$" Ma$ine sells its p$odcts to -eale$ fo$ $esale. -eale$ is f$ee to sell p$odcts made b" othe$

manfact$e$s.(b) -eale$ gi/es Me$c$" Ma$ines wa$$ant" to all b"e$s of Me$c$" Ma$ine p$odcts. -eale$ pe$fo$ms wa$$ant" s/c on Me$c$" Ma$ine p$odcts. Me$c$" Ma$ine hono$s wa$$ant" claims *madeb" p$chase$ th$ogh -eale$+ and $eimb$ses -eale$ fo$ wa$$ant" s/c it pe$fo$ms *on behalf of Me$c$" Ma$ine.+

a. 's -eale$ Me$c$" Ma$ines agent fo$ p$poses of dete$mining /ene2 (see State e&. $el.Bunting v. Koehr% 35 ,W6d751 (Mo. 1887) (en banc)ANSWER

The TEST for !e"ermii$ 'he"her a (a$e)*+ e,i#"e! i# "hree-.ro$e! YOU NEE/ ALL OF THEM TO

SATISFY THE AGENCY RELATIONSHIP0 i or!er for a$e"1.ri)i.2e re2a"io#hi. "o e,i#" here A 'o32!

ha%e "o o2* e,)23#i%e2* #e22 "ho#e $oo!# a! o" a* o"her $oo!# 4From Gree %5 HR B2o)675 For e,am.2e

If !ea2er 83*# "he $oo! a! $e"# "i"2e #3)h a# 8e#" 83*9# )om.3"er# a! "he re#e22# "hi# i# o" a PA

re2a"io#hi. 83" mere2* a 83*er #e22er re2a"io#hi.5 If *o3 'or6 a" Ga"e'a* a! o2* #e22 "he )er"ai

.ro!3)"# a! !o9" $e" "i"2e "hi# 'i22 8e PA re2a"io#hi.5 REMEMBER if )2o#e )a#e# "he )o3r"# 'i22 fi! a

a$e)* re2a"io#hi. "o o" !e"er )ommer)e5

4:7 (A$e"+ m3#" ho2! a .o'er "o a2"er 2e$a2 re2a"io# 8"' "he .ri)i.a2 a! ;r!.er#o# a! 8"' "he

.ri)i.a2 a! him#e2f5 4if e2eme" oe i# #a"i#fie! "he ; i# )2ear2* #a"i#fie! #i)e if *o3 ha%e "he

.o'er "o a2"er 2e$a2 re2a"io#hi. 8e"'ee P a! "hir! .ar"* "he he o8%io3#2* ha# "he .o'er "o

)o"ro2 )o!3)" of "he a$e"75

a5 The 'arra"* here 'a# #.e)ifi) i "he 'arra"* a! "he !ea2er )ao" a2"er i"< "herefore

"he* )ao" )ha$e "he 'arra"*5 Be)a3#e "he K i# %er* #.e)ifi) "he !ea2er i# o" a82e "o

a2"er "he 2e$a2 re2a"io#hi. #o "ha" 'o32! e23!e 3# "o fa)" "ha" "here i# o" a a$e"

re2a"io#hi. here5

4=7 The a$e" i# a fi!3)iar* 'i"h re#.e)" "o ma""er# 'i"hi "he #)o.e of hi# a$e)*5a5 Re# =!:; 4.$ :>? S3..7

4;7 The .ri)i.a2 ha# "he ri$h" "o )o"ro2 "he )o!3)" of "he a$e" '1 re#.e)" "o ma""er# e"r3#"e! "o

him5

a5 Re# =!:@ 4.$ :>? #3..2eme"7

A$e)*0 Pri)i.2e0 A$e"

4:7 A$e)* i# "he fi!3)iar* re2a"io 'hi)h re#32"# from "he maife#"a"io of )o#e" 8* oe .er#o 4P7 "o

ao"her 4A7 "ha" "he o"her 4A7 #ha22 a)" o hi# 4P7 8eha2f a! #38e)" "o hi# 4P7 )o"ro2< a! )o#e" 8*

"he o"her #o 4A7 "o a)"5

4=7 The oe for 'hom a)"io i# "o 8e "a6e i# "he .ri)i.2e5

4;7 The oe 'ho i# "o a)" i# "he a$e"5

The a8#e)e of ANY oe of "he#e "hree e2eme"# of a$e)* !efea"# a )2aim "ha" a$e)* e,i#"#5 HERE< "he

!ea2er !oe# o" #e22 Mer)3r* Marie .ro!3)"# .ri)i.a22* for "he 8eefi" of Mer)3r* Marie5 The /ea2er i#i!e.e!e" of Mer)3r* Marie< i# .ermi""e! "o #e22 .ro!3)"# of )om.e"i$ )om.aie#< a! .3r)ha#e#

Mer)3r* Marie mo"or# .rimari2* for "he .3r.o#e of re#e22i$ "hem for i"# o' .rofi"5 The re2a"io#hi.

8"' "he !ea2er# a! Mer)3r* Marie for "he #a2e of Mer)3r* Marie .ro!3)"# i#< THEREFORE< "ha" of

83*er a! #e22er< NOT a$e" a! .ri)i.a25 THE BUYER SELLER RELATIONSHIP ALONE WOUL/

NOT CREATE AN AGENCY RELATIONSHIP 4See )2a## o"e# .$ :>75

b. 's the fact that -eale$ e&tended and pe$fected Me$c$" Ma$ines p$odct wa$$ant" fo$ the ltimate p$chase$ sfficientfactal p$edicate to sppo$t the legal conclsion that -eale$ is Me$c$" Ma$ines agent2

ANSWER

1


2/30

A$e)* !oe# o" e,i#" 32e## "he !ea2er ha# "he (.o'er "o a2"er "he 2e$a2 re2a"io#hi.+ 8"' Mer)3r*

Marie a! "he 32"ima"e .3r)ha#er5+ HERE< "he !ea2er a$ree# "o e,"e! "he 'arra"* "o a* #38#eD3e"

.3r)ha#er of "he mo"or a! o"if* Mer)3r* Marie of "he e' ho2!er of "he 'arra"*5 Thi# )o"ra)"3a2

o82i$a"io i# NOT "he #ame a# a .o'er "o a2"er a 2e$a2 re2a"io#hi. 8"' "he ma3fa)"3rer a! "he

.3r)ha#er5 WHY B1) "he ma3fa)"3rer

4:7 Se22# "he .ro!3)" "o "he !ea2er for re#a2e0

4=7 Ui2a"era22* im.o#e# "he "erm# of "he 'arra"* .rior "o "he #a2e "o "he !ea2er0

4;7 For8i!# "he !ea2er from a2"eri$ "he "erm# of "he 'arra"* i a* 'a*0

4@7 ReD3ire# "he !ea2er "o e,"e! "he 'arra"* a# .ar" of "he #a2e a! o"if* "he ma3fa)"3rer of "hee' ho2!er of "he 'arra"*0 AN/

4?7 Ma6e# "he 'arra"* a .ar" of "he .3r)ha#er9# 8ar$ai 'he he or #he .3r)ha#e# "he .ro!3)"5

UN/ER THESE CIRCUMSTANCES< "here i# o a$e)* 8"' "he ma3fa)"3rer a! "he !ea2er a# "here i#

o .o'er i "he !ea2er "o a2"er "he 2e$a2 re2a"io#hi. 8"' "he ma3fa)"3rer a! "he .3r)ha#er5

c. -oes -eale$s obligation to p$o/ide wa$$ant" s/c ma#e it Me$c$" Ma$ines agent2

ANSWER

NO5 A2"ho3$h ()o"ro2+ o%er "he !ea2er#9 'arra"* 'or6 i# a e)e##ar* e2eme" of a$e)*< i" e%er"he2e##

!oe# o" e,i#" UNLESS 8o"h of "he remaii$ e2eme"# of a$e)* are a2#o .re#e"5 The !ea2er9# o82i$a"io

"o .erform 'arra"* 'or6 i# NOT "a"amo3" "o a .o'er "o a2"er Mer)3r* Marie9# 2e$a2 re2a"io#hi. '1 a

"hir! .ar"*5 E%e here 'he *o3 6i)6 i )o"ro2 *o3 are o" #a"i#f*i$ "he fir#" .ro$ from a8o%e5

PROBLEM 1.6 (pg. 79) The Firm a! i"# A$e"# a! Ser%a"# 4Same a# Pro82em @5; #ee 8e2o'7

:B; ;o$p. sold mobile homes and de/eloped mobile home pa$#s. :B; emplo"ed :gent% a licensed $eal estateb$o#e$% to ac $et$n Pa$#ac$e ine&change fo$ the =79%999 p$chase p$ice.

ANSWER

The Fi!3)iar* Pri)i.2e e"ai2# "ha" a a$reeme" "o a)" o 8eha2f of "he .ri)i.a2 )a3#e# "he a$e" "o ha%e a

/UTY im.o#e! o him< )rea"e! 8* hi# 3!er"a6i$< "o a)" .rimari2* for "he 8eefi" of ao"her i ma""er#

)oe)"e! 'i"h hi# 3!er"a6i$5 Amo$ "he !3"ie# "o "he .ri)i.a2 are

a5 "he !3"* "o a))o3" for .rofi"# ari#i$ o3" of "he em.2o*me"5 Re#"a"eme" ;J= ;r!.ar"ie# are 8o3! "o "he 3!i#)2o#e! .ri)i.a2 32e## 4; e,)e."io#7

i5 The a$reeme" #"a"e# "o "he )o"rar*

ii5 E,i#"e)e of .ri)i.a2 i# fra3!32e"2* )o)ea2e!

iii5 There i# a #e" off or #imi2ar !efe#e a$ai#" "he a$e"5

5 See a2#o Re#"a"eme" ;J;< ;J@

i5 ;J; A .er#o 4;r!.ar"*7 'i"h 'hom a a$e" ma6e# a )o"ra)" o a))o3" of a

3!i#)2o#e! .ri)i.2e i# o" 2ia82e i a a)"io a" 2a' 8ro3$h" 3.o "he )o"ra)" 8* #3)h.ri)i.2e

i5 If "he )o"ra)" i# i "he form of a #ea2e! or e$o"ia"io i#"r3me" OR

ii5 If "he "erm# of "he )o"ra)" e,)23!e 2ia8i2i"* "o a* 3!i#)2o#e! .ri)i.2e or "o "he

.ar"i)32ar2* .ri)i.2e5

4@7 ;J>4:7 The .ri)i.2e i# o "he hoo6 32e## 2imi"# e,.o#3re5 Oe "he a$e" i# 2ia82e he )a" "hro' i"

o"o "he .ri)i.2e a! "he A 'o32! 8e 2ia82e5 Ho'e%er here< Ta8 fo3! o3" 'ho "he .ri)i.2e 'a# #o

"herefore "hi# #e)"io !ro.# o3" of "he aa*2#i#5

4


5/30

PROBLEM 6.4 (p.87) > s#ipped > no notes > *B$ban#+

PROBLEM 6.5 (p.88) > s#ipped > no notes > *Otcome in ;la$# ;ase+GGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

PROBLEM 7.1 (pg.17) Co"ra)"# E"ere! i"o 8efore Forma"io of a Limi"e! Lia8i2i"* Firm

F$ace and :lice we$e sta$ting thei$ own $eco$d label% *White Rabbit Reco$ds.+ F$aces fathe$% Lewis% ag$eed to in/est

in the bsiness. @he th$ee of them ag$eed to o$ganie the bsiness as a limited liabilit" compan"% in which F$ace%:lice and Lewis we$e to be the onl" membe$s.

Lewis ga/e F$ace and :lice =199%999% which the" deposited in a ban# accont nde$ the name *White RabbitReco$ds.+ F$ace sta$ted loo#ing fo$ a place to pt the $eco$ding stdio and offices. :lice sta$ted wo$#ing on finding$eco$ding a$tists. On Ma$ch H% :lice signed a $eco$ding cont$act w :$tist. @he $eco$ding cont$act was in the name of*White Rabbit Reco$ds%+ and was signed as follows0

White Rabbit Reco$dsB"0 , Alice

sing fo$ms she downloaded f$om the 'nte$net% F$ace p$epa$ed :$ticles of O$ganiation fo$ a limited liabilit"compan" to be named *Whit Rabbit Reco$ds% LL;.+ On :p$il 1% the th$ee signed the :$ticles of O$ganiation% andmailed them to ,ec$eta$" of ,tate of the ,tate of ;onfsion fo$ filing nde$ the ;onfsion Limited Liabilit" ;o :ct(*;LL;:+).

Lewis in/ested in the bsiness% bt was not acti/e in its ope$ation. F$ace and :lice both in/ested in% and we$e acti/ein $nning the bsiness. While :lice was off contacting bands and songw$ite$s% F$ace fond a place to pt thei$$eco$ding stdio. On :p$il H% F$ace signed a lease w Landlo$d. @he lease showed *White Rabbit Reco$ds% LL;+ asthe lessee% and was signed as follows0

White Rabbit Reco$dsB"0 , GraceF$ace% membe$

On :p$il 15% F$ace $ecei/ed a lette$ f$om the ;onfsion ,ec$eta$" of ,tate% $et$ning the :$ticles of O$ganiation ofWhite Rabbit Reco$ds% LL;% and ad/ising that the :$ticles we$e being $et$ned 'i"ho3" fi2i$% bc the name *WhiteRabbit Reco$ds% LL;+ was not a/ailable wo a lette$ of consent f$om White Rabbit Magic% 'nc. F$ace% :lice andLewis obtained the lette$ of consent% and mailed the consent% and the :$ticles of O$ganiation fo$ White RabbitReco$ds% LL;% to the ;onfsion ,ec$eta$" of ,tate. @he ;onfsion ,ec$eta$" of ,tate accepted the :$ticles ofO$ganiation fo$ filing% and issed a ;e$tificate of O$ganiation fo$ White Rabbit Reco$ds% LL;% effecti/e as of :p$il

66.

Iestions0(1) Please ad/ise each of F$ace% :lice% Lewis and White Rabbit Reco$ds% LL; as to thei$ $especti/e

$esponsibilities w $espect to(a) the $eco$ding cont$act w :$tist% and(b) the lease w Landlo$d. Jo ma" assme that% e&cept as set fo$th abo/e% the Lease has no p$o/isions that

wold affect "o$ answe$.(6) ,ppose that% instead of a limited liabilit" compan"% the pa$ties had fo$med a limited pa$tne$ship% w F$ace

and :lice as gene$al pa$tne$s% and Lewis as a limited pa$tne$. Wold that change the $esponsibilities of thepa$ties on the Lease2 Wh" o$ wh" not2

ANSWER

4:7 A!%i)e "o Gra)e< A2i)e< a! Le'i# a# "o "heir re#.o#i8i2i"ie# '1 re#.e)" "o

(a) The Re)or!i$ Co"ra)" '1 Ar"i#" Alicea)"e! a# a .romo"er of "he )or.ora"e e"er.ri#e< Whi"e Ra88i" Re)or!#< LLC< 'he #he #i$e! "he

re)or!i$ )o"ra)"5 The 2e$a2 re2a"io#hi. 8e"'ee a .romo"er a! a o"-*e" forme! e"i"* i# aa2o$o3# "o

"ha" of a$e"1.ri)i.a25 A# #3)h< .romo"er# are a" 2ea#" ii"ia22* 2ia82e o a* )o"ra)"# "he* e,e)3"e i

f3r"hera)e of "he )or.ora"e e"i"* .rior "o i"# forma"io5 The .romo"er# are re2ea#e! from 2ia8i2i"* o2*

'he

4i7 The )o"ra)" .ro%i!e# "ha" .erforma)e i# "o 8e "he o82i$a"io of "he )or.ora"io 4o%a"io7

5


6/30

4ii7 The )or.ora"io i# 32"ima"e2* forme! 4!e e3re7

4iii7 The )or.ora"io "he forma22* a!o."# "he )o"ra)" 4ra"ifi)a"io a! affirma"io75

Pre-i)or.ora"io a$reeme"# mere2* i!i)a"e "ha" i" i# 3!er"a6e o 8eha2f of a )or.ora"io a! "he

)or. 'i22 o" 8e e,)23#i%e2* 2ia82e i "he e%e" of a 8rea)h "he .romo"er remai# 2ia82e o "he

)o"ra)"5

Promo"er Lia8i2i"* The .romo"er 'i22 o2* 8e re2ea#e! from 2ia8i2i"* IF

4i7 The )or. i# 32"ima"e2* forme! AN/

4ii7 "he )or. #38#eD3e"2* A/OPTS "he )o"ra)" a!

4iii7 "here i# #38#eD3e" NOATION5 Ho'e%er< i or!er for "he 2ia8i2i"* "o #hif" "o "he 2a"er-forme!)or.< "he )o"ra)" m3#" e,.2i)i"2* #"a"e "ha" "he .erforma)e "here3!er i# #o2e2* "he

re#.o#i8i2i"* of "he )or.5

THEREFORE A .er#o 'ho ma6e# a )o"ri83"io "o a 83#ie## e"er.ri#e a! erroeo3#2* 83" i $oo!fai"h 8e2ie%e# "ha" he ha# 8e)ome a 2imi"e! .ar"er i "he e"er.ri#e i# o" a $eera2 .ar"er i "he e"er.ri#e

a! i# o" 8o3! 8* i"# o82i$a"io# 8* rea#o of ma6i$ "he )o"ri83"io< re)ei%i$ !i#"ri83"io from "he

e"er.ri#e< or e,er)i#i$ a* ri$h"# of a 2"! .ar"er< if< o a#)er"aii$ "he mi#"a6e< he or #he


7/30

o Ca3#e# a a..ro.ria"e )er"ifi)a"e of 2imi"e! .ar"er#hi. or a )er"ifi)a"e of ame!me" "o 8e e,e)3"e!

a! fi2e!0 or

o Wi"h!ra'# from f3"3re eD3i"* .ar"i)i.a"io i "he e"er.ri#e 8* e,e)3"i$ a! fi2i$ i "he offi)e of "he

Se) of S"a"e a )er"ifi)a"e !e)2ari$ 'i"h!ra'a2 3!er "hi# #e)"io5

Ar"i#"< ho'e%er< )o32! ar$3e "ha" #i)e o a""em." ha! e%e 8ee ma!e *e" a# "o fi2i$ "he Ar"i)2e# of

Or$aia"io< "ha" i" #ho32! 8e a $eera2 .ar"er#hi. re!eri$ Le'i# .er#oa22* 2ia82e "oo5 The $eera2 r32e i#

"ha" ;r!.ar"*9# 6o'2e!$e re$ar!i$ "he #"a"3# of a 2"! .ar"er#hi. i# irre2e%a" 'he a" "he "ime of

)o"ra)"i$< "he .ar"er# ha%e ma!e o a""em." "o )om.2* '1 "he fi2i$ reD3ireme"#5 Si)e "he* 'ere !e fa)"o4meai$ "he* ma!e a $oo! fai"h )o2ora82e a""em." "o )om.2* 'i"h "he #"a"3"or* reD3ireme"#7 "he* 'o32! o"

8e !e e3re a! "herefore o" a LLC5 The "he !efa32" r32e# for GP 'o32! a..2*5 If o' "he* 'ere GP#< A2i)e

a! Gra)e 'o32! 8e 2ia82e #i)e "he*< 3!er ;J@< a)"i%e2* .ar"i)i.a"e!5 Le'i# )o32! "he ar$3e 3!er ;J@8 "ha"

#i)e he 'a# .a##i%e he 'o32! o" 8e 2ia82e 4#i)e a LP i a GP7

Le'i# )o32! "he ar$3e "ha" 81) he ha! o a)"i%e )o"ro2 or .ar"i)i.a"io i "he )om.a* he i# a 2imi"e! .ar"er

a! a# #3)h< o" 2ia82e5 The re83""a2< ho'e%er< 8* Ar"i#" 'o32! 8e "he o..o#i"e #i)e he #hare! i "he .rofi"# he

#ho32! 8e .er#oa22* 2ia82e5 AN/ Ar"i#" mi$h" 'i 81) of "he o-)om.2ia)e '1 "he fi2i$ reD3ireme"#5

IF a LLC ha! i fa)" 8ee forme! .ro.er2*< 8* !efii"io of a LLC ea)h mem8er ha# a)"3a2 a3"hori"* "o

8i! "he LLC5 If a mem8er !oe# o" a$ree "ha" mem8er ma* 'i"h!ra' or me!ia"e5 Si)e Le'i# !i! ei"her< he

'o32! "herefore 8e)ome 2ia82e 3!er "he K "ha" 8o3! "he LLC5 4.$ :; #3..2eme"7

/ef

4:7 /e fa)"o 4:7 There i# a #"a"3"e .ermi""i$ i)or.ora"io< 4=7 8oafi!e a""em." "o i)or.ora"e< 4;7 a)"3a2

3#e or a""em."e! 3#e of )or. .o'er# 4@7 "hir! .ar"* re2ia)e o "he )or.5

i5 Re#32" if *o3 !ea2 'i"h !e fa)"o "he )or.ora"io )a 8e 8o3! 8* a)"# of i"# a$e"# 4;=J .$

:=70 !i#)2o#e! a$e"# a! #hareho2!er# are o" L- L 'o32! 8e im.3"e! "o )or.5

4=7 /e e3re a ma""er of #"ri)" )om.2ia)e 'i"h #"a"3"or* reD3ireme"#

4;7 Cor.ora"io 8* e#"o..e2 'he .ar"ie# are e#"o..e! from !e*i$ )or.59# e,i#"e)e5

PROBLEM 7.6 (1H6) > Ko$mation of i$ms

Co"ra)"# E"ere! i"o 8efore Forma"io of a Limi"e! Lia8i2i"* Firm 1 I"era)"io of S"a"3"e# a! Commo

La'

'n/esto$ in/ested mone" in Widgets% Ltd. :t the time of the in/estment% 'n/esto$ signed a ;e$tificate and :g$eementof Limited Pa$tne$ship that specified that 'n/esto$ wold be a limited pa$tne$ in Widgets% Ltd. n#nown to 'n/esto$%Widgets% Ltd. Began doing bsiness withot filing the ;e$tificate. :fte$ si& months% Widgets% Ltd. -ist$ibted =1%999in p$ofits to 'n/esto$. :fte$ 'n/esto$ $ecei/ed the p$ofits dist$ibtion% 'n/esto$ lea$ned that Widgets% Ltd. was not alimited pa$tne$ship.

-espite lea$ning that Widgets% Ltd. was not a limited pa$tne$ship% 'n/esto$ too# no action to p$oc$e the filing of the;e$tificate of Limited pa$tne$ship fo$ Widgets% Ltd.% no$ did 'n/esto$ withd$aw f$om e


8/30

RULPA ;J@4a7 #ee 487 8e2o' (Per#o Erroeo3#2* Be2ie%i$ Him#e2f Limi"e! Par"er5 (A .er#o

'ho ma6e# a )o"ri83"io "o a 83#ie## e"er.ri#e a! erroeo3#2* 83" i $oo! fai"h 8e2ie%e# "ha" he

ha# 8e)ome a 2imi"e! .ar"er i "he e"er.ri#e i# o" a $eera2 .ar"er i "he e"er.ri#e a! i# o"

8o3! 8* i"# o82i$a"io# 8* rea#o of ma6i$ "he )o"ri83"io< re)ei%i$ !i#"ri83"io# from "he

e"er.ri#e or e,er)i#i$ a* ri$h"# of a 2imi"e! .ar"er< IF< o a#)er"aii$ "he mi#"a6e< HE1SHE

4i7 )a3#e# a a..ro.ria"e )er"ifi)a"e of 2imi"e! .ar"er#hi. or a )er"ifi)a"e of ame!me"

"o 8e fi2e!0 OR

4ii7 'i"h!ra'# from f3"3re eD3i"* .ar"i)i.a"io8* !e)2ari$ 'i"h!ra' 'i"h "he #e) of#"a"e+5

A..2*i$ ;J@ "o "he fa)"# .re#e"e!< I%e#"or ma!e )o"ri83"io# "o Wi!$e" erroeo3#2*< 83" i $oo!

fai"h he 8e2ie%e! "ha" he 'a# a 2imi"e! .ar"er5 He #ho32! o" 8e 2ia82e "o A2a5 A2a9# #a2e of :J26

'or"h of .ro!3)" "o Wi!$e" 4e%e af"er I%e#"or re)ei." of .rofi"#7 'a# a))om.2i#he! beforeI%e#"or

2eare! "here 'a# o 2imi"e! .ar"er#hi.5 Co%er#e2*< 3!er ;J@< I%e#"or ma* 8e 2ia82e "o Be""*

8e)a3#e I%e#"or 6e' "ha" "here 'a# o 2imi"e! .ar"er#hi. 4'hi)h i# a a)" of 8a! fai"h7 'he Be""*

2e" "he moe* "o Wi!$e"#5 B3" I%e#"or mi$h" o" 8e 2ia82e "o Be""* 4;r!.ar"*7 8e)a3#e #he ma* ha%e

e,"e!e! "he )re!i" 'i"ho3" 8e2ie%i$ i $oo! fai"h "ha" I%e#"or 'a# a $eera2 .ar"er5 The a..2i)a82e

#e)"io ;J@487 rea!#< (B3" i ei"her )a#e< o2* if "he "hir! .ar"* a)"3a22* 8e2ie%e! i $oo! fai"h "ha" "he

.er#o 'a# a $eera2 .ar"er a" "he "ime of "he "ra#a)"io+5 Be""* ha# a .re""* #"ro$ re2ia)e

ar$3me"< "ha" i#< "ha" "he )re!i" 'a# e,"e!e! i $oo! fai"h5 Af"er he fo3! o3" "ha" "he* 'ere o" a

2imi"e! .ar"er#hi. 4he 'o32! o' 8e a GP7

nde$ LP: 110 in/esto$s in a defecti/e limited pa$tne$ship will not be t$eated as gene$al pa$tne$s so longas (') the" e&e$cised onl" the $ights of limited pa$tne$s and (ii) the" $enonce all inte$est in the bsiness*p$omptl"+ on lea$ning that no limited pa$tne$ship e&ists. the$e a$e no facts indicating that 'n/esto$ e&e$cised$ights be"ond his limited pa$tne$ship bt 'n/esto$ did not $enonce inte$est in the bsiness pon lea$ning thatthe$e was no limited pa$tne$ship becase he contined to ta#e dist$ibtions of p$ofits afte$ he #new the$e wasno limited pa$tne$ship. 'n othe$ wo$ds% 'n/esto$ wold be liable as a gene$al pa$tne$ to Bett" not :lan. Cotto :lan% becase he did not #now at the time 'n/esto$ $ecei/ed dist$ibtion that the$e was no limitedpa$tne$ship% howe/e$ 'n/esto$ #new of this at the time Bett" lent mone" to Widget% Ltd. LP: $easons thatbecase pe$sons in sch a position ne/e$ acti/el" pa$ticipate din the cont$ol of the bsinessN the" we$e not coowne$s of the bsiness% bt $athe$ onl" in/esto$s. @he$efo$e as in/esto$s% the" cold in/ol/e section 11 and$etain an" p$ofits $ecei/ed befo$e the" lea$ned the" we$e not limited pa$tne$s. [This is not bolded becausehe said only answer with respect to RU!A.

PROBLEM 4.1 (pg. 697) E,.re## A)"3a2 A3"hori"*

Jo a$e an associate in a law fi$m. Jo$ spe$/ising pa$tne$ assigns "o two client files.

:. Leslie Owne$ owns a small p$inting shop. Owne$ is ma$$ied% and has two "ong child$en. Owne$ is also a membe$of the Cational Fa$d. Owne$s nit has Dst been called into acti/e dt"% and is being assigned to Bosnia as a pa$tof the C peace#eeping fo$ces. Owne$ wants to e&ecte a gene$al powe$ofatto$ne" gi/ing he$ hsband thepowe$ to $ne the p$inting shop while she is in Bosnia. ,he also wants he$ hsband to manage he$ in/estments%which a$e he$ sepa$ate p$ope$t".

B. F$andpa ones is $eti$ed% and has sbstantial assets that g$eatl" e&ceed the c$$ent e&emptions fo$ the imposition

of estate ta&es. F$andpa is 39 "$s old% and has Dst been diagnosed w Pa$#insons disease. F$andpa is toop$eoccpied w his health to pa" p$ope$ attention to his assets. Ae also #nows that% with his ad/anced age% and hisPa$#insons% it is li#el" that% in the ne&t "ea$ o$ so% he will become nable to manage his affai$s. @o ens$e that hisp$ope$t" will be managed p$ope$l"% F$andpa wishes to gi/e his daghte$ a gene$al powe$ofatto$ne".

What shold be "o conce$ns in d$afting the powe$sofatto$ne"2 :$e the conce$ns in d$afting Owne$s powe$ofatt" diffe$ent f$om those in d$afting F$andpas2 Wold f$the$ info be helpfl in d$afting the powe$sofatt"2 'f"o thin# it wold% what info wold "o li#e% and wh"2

ANSWER

3


9/30

4:7 The $eera2 r32e i# "ha" Po'er# of A""* are (#"ri)"2* )o#"r3e! a! are he2! "o $ra" o2* "ho#e .o'er# 'hi)h

are )2ear2* !e2iea"e!5 Ho'e%er< "hi# r32e of #"ri)" )o#"r3)"io i# #38e)" "o a more im.or"a" r32e "ha" "he

)o3r" m3#" !e"ermie "he i"e"io of "he .ar"ie#5

4=7 Ao"her a))e."e! r32e i# "o !i#)o3" or !i#re$ar!< a# meai$2e## %er8ia$e< a22-em8ra)i$ e,.re##io# fo3! i

POA#5

4;7 Am8i$3i"ie# are "o 8e re#o2%e! a$ai#" "he .ar"* 'ho ma!e i" or )a3#e i" "o 8e ma!e< 81) "ha" .ar"* ha! "he

8e""er o..or"3i"* "o 3!er#"a! a! e,.2ai hi# meai$5

4@7 Fia22*< $eera2 'or!# 3#e! i a i#"r3me" are re#"ri)"e! 8* "he )o"e," i 'hi)h "he* are 3#e!< a! are

)o#"r3e! a))or!i$2*5 Term# are $i%e "e)hi)a2 a! o" .o.32ar !efii"io#5

4a7 For Le#2ie O'er< 2a$3a$e #3)h a# (#3)h .o'er a# ma* 8e 3#e! i "he or!iar* )o3r#e of 83#ie##+ i#

8oi2er.2a"e a! 'i22 .ro8a82* #3ffi)e e,)e." if "here are 3fore#ee )ir)3m#"a)e#5 For e,am.2e< "he ri$h"

"o #e22< !e)2are 8a6r3.")*< mer$er< e")5 'o32! o" 8e )o%ere! i 8oi2er.2a"e 2a$3a$e5 The#e "hi$# 'o32!

2i6e2* ee! #.e)ifi) )o#e"5

487 For Gra!.a "here are o"her i##3e#5 S3)h a# )o"i3a"io o 2ife #3..or" a! !i#a8i2i"ie#5 For "ho#e

!e)i#io# *o3 'o32! 'a" "o $e" "he fami2*9# )o#e" ahea! of "ime5 Ao"her )o)er mi$h" 8e Gra!.a9#

)om.e"e)*5 Im.or"a" iforma"io< "he e,i#"e)e of a 'i225

O"her .o'er# 4e."..o'er "o ma6e $if"# of "he .ri)i.a29# .ro.7 are NOT i)23!e! UNLESS

a5 i" i# e,.re##2* )oferre!

85 i" ari#e# a# a e)e##ar* im.2i)a"io from "he )oferre! .o'er#< OR

)5 i" i# )2ear2* i"e!e! 8* "he .ar"ie#< a# e%i!e)e! 8* "he #3rro3!i$ fa)"# a! )ir)3m#"a)e#5

=5 G3ar!ia# of i)om.e"e"#

a5 /o o" ha%e a3"hori"* "o mai"ai a a)"io for !i%or)e of $ra!fa"her a8#e" e,.2i)i" #"a"3"or*

a3"horia"io !3e "o .er#oa2 a"3re of "he re2a"io#hi.5

The i##3e "he ari#e#< 'he"her "he h3#8a! ha# "he .o'er "o hire #omeoe "o maa$e "he .ri"i$ #"ore5 4See

PROBLEM @5= Im.2ie! A)"3a2 A3"hori"*7

PROBLEM 4.6 (pg.698) Im.2ie! A)"3a2 A3"hori"*> (class notes pg 5)

When its bilding need painting% ;h$ch hi$ed Bill to paint it. ;h$ch has hi$ed Bill on /a$ios p$oDects% inclding thelast painting of the ;h$ch bilding. While wo$#ing those p$oDects% Bill had often as#ed his b$othe$% ,am% to help ot

as needed. 'n fact% ,am had helped Bill with painting po$tions of the bilding that we$e /e$" high and difficlt fo$ onepe$son to paint. When it came time to paint those po$tions of the bilding% Bill as#ed fo$ pe$mission to hi$e anothe$wo$#e$. :lthogh the ;h$ch sggested that Bill might se Fa$"% who was ha$d to cont$act% Bill as#ed ,am to helpot again. @he mo$ning that Bill and ,am came in to paint% Bill disco/e$ed that the$e wasnt enogh paint% and sent,ame to the ha$dwa$e sto$e to p$chase mo$e paint. -oes ,am ha/e eithe$ e&p$ess o$ implied atho$it" to p$chasethe paint on behalf of the ;h$ch2 Aow wold "o cha$acte$ie sch atho$it"2

ANSWER

:5 Sam he 'o32! ha%e a..are" a3"hori"* "o 'or6 o "he )h3r)h #i)e he ha# !oe .roe)"# i "he .a#"

a! "he* ha%e a22o'e! him "o !o "hem5 Sam !oe#9" ha%e a)"3a2< 83" he ha# a..are"5 Oe )o32! ar$3e

"ha" he a2#o ha# ihere" #i)e ha%i$ .ai" "o .ai" i# ihere" i "he o8 a# a .ai"er5

=5 No"e Sam i# a #38a$e" 4#ee )2a## o"e# .$ ?>7 #38a$e" ha# "he #ame .o'er# a# a a$e" a! ha# "he

!3"ie# of fi!e2i"* a! )are5 So "here i# a 2ie of )o"i3i"* of a$e" "o #38a$e"5i5 T'o .o##i82e %ie'#

:5 The a..oi"i$ a$e" ha# )om.2e"e! hi# "a#6 o)e "he #38a$e" i# a..oi"e! a! "he

#38a$e" i# o' "he o2* a$e" of "he .ri)i.2e

=5 The a..oi"i$ a$e" remai# a a$e" of "he .ri)i.2e 83" #"a*# o a# a .ri)i.2e "o

"he #38a$e"5

ii5 Termia"io i# ma!e 8a#e! 3.o maife#"a"io# of "he .ar"ie#< )3#"om# of "he 83#ie##< a!

a22 o"her )ir)3m#"a)e#5

iii5 L of a$e" for a)"# 'i"hi a3"hori"* 4!3"ie#7

8


10/30

:5 Re#"a"eme" =! ; )o"ra)"3a2 !3"ie# a .er#o 'ho ma6e# a )o"ra)" 'i"h ao"her

"o .erform #er%i)e# a# a a$e" for him i# #38e)" "o a !3"* "o a)" i a))or!a)e 'i"h

hi# .romi#e5

=5 Re#"a"eme" =! ; !3"* of )are a! #6i22 4#ee .$ :? #3..7

a5 A .ai! a$e" i# #38e)" "o a !3"* "o "he .ri)i.2e "o a)" 'i"h a #"a!ar! )are .$ :>> S3..7 4:7 a o8e)"i%e maife#"a"io 8* "he .ri)i.2e< 4=7 fo22o'e! 8* "hea$e"9# rea#oa82e i"er.re"a"io of "he maife#"a"io< 4;7 'hi)h 2ea!# "he a$e" "o 8e2ie%e "ha"

i" i# a3"horie! "o a)" for "he .ri)i.2e5

:5 Im.2ie!1i)i!e"a2 a3"hori"* "o !o a)"# 'hi)h are i)i!e"a2 "o i"< 3#3a22* a))om.a*

i"< or are rea#oa82* e)e##ar* "o a))om.2i#h i"5 4;? .$ :> #3..7

=5 E,.re## 4=>7 a2#o

ii5 A..are" 4< =7 "he .o'er "o affe)" "he 2e$a2 re2a"io# of ao"her .er#o 8* "ra#a)"io#

'i"h "hir! .er#o#< .rofe##e!2* a# a$e" for "he o"her< ari#i$ from a! i a))or!a)e 'i"h "he

o"her9# maife#"a"io# "o #3)h "hir! .er#o#5

iii5 E#"o..e2 48 .$ :>? #7

i%5 Ihere" 4Ca")ha22 !o)"rie7 ei"her a)"3a2 or a..are"< e#"o..e2 !oe#9" a..2*5 4a .$ :>@

S3..7

:5 T'o #i"3a"io#

a5 Cer"ai 3a3"horie! a)"# 8* a$e"#85 Cer"ai fa2#e re.re#e"a"io# of a$e" or a..are" a$e"

%5 Ra"if* 4= .$ :>7 "he affirma)e 8* a .er#o of a .rior a)" 'hi)h !i! o" 8i! him 83"

'hi)h 'a# !oe or .rofe##e!2* !oe o hi# a))o3"< 'here8* "he a)"< a# "o #ome or a22 .er#o#4:7 "he "o RUPA a" ;J4e7 i# "he #ame 4.=?>7

:7 U!er "he o2! #"a"3"e i" reD3ire# a ho2!i$ o3" or re.re#e"a"io 8* 'or!# or )o!3)" "ha" a

.ar"i)32ar .er#o i# a .ar"er5 Thi# o2!er #e)"io a2#o reD3ire# a ;r!.ar"* e,"e#io of )re!i" "o

"he ."#h. of fai"h of #3)h re.re#e"a"io ma!e "o "hem5 I" reD3ire# a re2ia)e o "he .3r.or"e!

."#h. re2a"io#hi. 8* "he .ar"* e,"e!i$ )re!i"5

=7 U!er ;J "he .3r.or"e! .ar"er 4ho2!i$ o3" i# "he oi" %e"3re of "he .3r.or"e! ."#h.

a! "he .3r.or"e! .ar"er75 No' "he#e .ri)i.2e# 8o"h o8"ai "o ."#h. a! .3r.or"e! ."#h.5So *o3 )o32! ha%e A & B 8e a ."#h.5 A! "he* ma* ho2! o3" C a# 8ei$ a .ar"er5 A! C ma*

.ar"i)i.a"e5 Or 'e )o32! ha%e A & B & C o" "hi6i$ "he* are a ."#h. 83" "he* are ho2!i$

o3" a# #3)h "he "he 2ia8i2i"* .ri)i.2e# are "he #ame5

)5 So i "hi# .ro82em OLE )o#e"# "o LENA "ha" "he* are ."#h.< "he* i# #o "he* )a .a* "he 2oa5

There i# $oo! rea#o "o !o "hi#< "he 2oa #e)3ri"*< or i"ere#" ra"e )har$e! i# he2.f325 Thi# ho2!i$

o3" ma6e "he ."#h. 2oo6 2ar$er "ha i" a)"3a22* i#5 Fi 2e" moe* for "he .3r.o#e of .3r)ha#i$ a

2a' 2i8rar* Who i# 2ia82e OLE LENA Or 8o"h

:7 Fir#" $o "hro3$h e#"o..e2 aa2*#i# a! #a* OLE i# e#"o..e! from a##er"i$ o-e,i#"e)e of "he

."#h. #i)e Fi re2ie! o "he rea#o for 2e!i$ "he moe*5 B3" if "he* .3r)ha#e! a #.or"#

)ar< "ha" i# o" i# "he )o3r#e of 83#ie##5

Thi# i# a ."#h. 8* e#"o..e2< 'hi)h mea# *o3 "rea" i" a# "ho3$h i" 'ere a ."#h.5 So "he ."#h. a!

.ar"er# are 8o3! 8* o82i$a"io# )3#"omar* i "heir )o3r#e of 83#ie##5 The 2ia8i2i"* .ri)i.2e# are o

8roa!er 3!er a ."#h. 8* e#"o..e2< "he* are "he #ame5 Here "he #.or"# )ar i# a #"re")h5

PROBLEM .4 (pg 797)(pg 36 class notes)

Odo and Wo$d a$e pa$tne$s in the in/estment ban#ing bsiness. Odo and Wo$f both consent to Bashee$ holding himself ot asthei$ pa$tne$s to -a&. :ppa$entl" acting fo$ pa$tne$ship p$po$ses% Bashee$ bo$$ows mone" f$om -a& who thin#s she is lendingto the pa$tne$ship.

(1) Who is liable on the loan2(6) Wold it ma#e an" diffe$ence to "o$ answe$ if Odo% bt not Wo$f% consented to being held ot2

18


20/30

(7) Wold it ma#e an" diffe$ence in "o$ answe$ if Wo$f had consented to Bashee$ holding himself as a pa$tne$ to Ia$#%bt had ne/e$ consented to an" holding ot to -a&2

(1) @he" all a$e liable.

Thi# i# ar$3a82* a .ri%a"e re.re#e"a"io a! "h3# reD3ire# !ire)" or a)"3a2 re2ia)e5 The "hre#ho2! for

.382i) re.re#e"a"io i# o" a# hi$h5 If a)"3a2 re2ia)e )ao" 8e #ho'< "he "here 'i22 o" 8e 2ia8i2i"*5

PROBLEM .5 (pg.711) Maa$eme" a! Co!3)" of Firm B3#ie##1E#"o..e2

With the consent of -ic#% ane holds he$self ot to Emil" as being a pa$tne$ of -ic#s. Emil" signs a cont$act to sellwidgets to what she belie/es is the -ic# and ane pa$tne$ship on open accont. Befo$e ane deli/e$s the widgets% -ic#tell he$ that the$e is no pa$tne$ship and tells he$ that he will not be liable fo$ the cont$act. :ssming the t$ansaction isone that wold ha/e bond the pa$tne$ship if made b" a pa$tne$.

a. nde$ UPA :>ma" Emil" b$ing an action fo$ b$each of cont$act against -ic#2b. ;old Emil" do so nde$ RUPA ;J2

ANSWER

Par"er# )a 8i! "he .ar"er#hi. 'i"h re$ar!# "o or!iar* .ar"er#hi. 83#ie## a! a22 .ar"er# are

2ia82e for or!iar* 83#ie## 2ia8i2i"ie#5

ae i# a .3r.or"e! .ar"er I##3e I# "hi# e$a$eme" 'i"h Emi2* 8i!i$ o /i)6

Thi# )a#e aa2*#i# fo22o'# #e)"io ;J

The #"a"3"or* "e#" for .ar"er#hi. 8* e#"o..e2 reD3ire# "ha"

4:7 Cre!i" m3#" ha%e 8ee e,"e!e! o "he 8a#i# of .ar"er#hi. re.re#e"a"io or

4=7 Tha" "he a22e$e! .ar"er m3#" ha%e ma!e or )o#e"e! "o re.re#e"a"io 8ei$ ma!e i a .382i) maer

'he"her or o" #3)h re.re#e"a"io# 8ei$ ma!e i a .382i) maer or 'he"her or o" #3)h

re.re#e"a"io# 'ere a)"3a22* )omm3i)a"e! "o "he .er#o e,"e!i$ )re!i"5 Thi# i# "he )ommo 2a' "e#"

a# )o!ifie!5

Ho'e%er< "he 2a#" .ar" of 4a7 #eem# "o e,"e! 2ia8i2i"* 8e*o! "he )ommo 2a' "e#" of re2ia)e if "he

re.re#e"a"io i# ma!e i a .382i) maer5

S"i22< "he )o3r" rea#o# "ha" e%e 'i"h "he #"a"3"or* ea)"me" "ha" #3)h a !e.ar"3re from 'e22 a !e%e2o.e!

)ommo 2a' !o)"rie a# "he fo3!a"io of e#"o..e2 i# "ha" oe i# 8o3! 8* #a*i$ or !oi$ #ome"hi$ 3.o

'hi)h ao"her re2ie# "o hi# or her !e"rime"5

Loo6i$ a$ai a" ;J 4a7 re2a"i$ "o .382i) re.re#e"a"io i# #eem# "ha" i" !oe# o" remo%e "he reD3ireme"

of re2ia)e af"er )o#i!er "he 2a$3a$e of B5 Whe a .er#o ha# 8ee "h3# re.re#e"e! "o 8e a .ar"er i a

e,i#"i$ .ar"er#hi. he i# a a$e" of "he .er#o )o#e"i$ "o #3)h re.re#e"a"io "o 8i! "hem "o "he

#ame e,"e" a# if he 'ere a .ar"er 'ho re#.e)" "o a* 'ho re2* o "he re.re#e"a"io5

The 'or! "h3# i# a refere)e 8a)6 "o #38#e)"io 4a7 A))or!i$2*< 3!er #38#e)"io 487 e%e 'he "he

re.re#e"a"io ha# 8ee ma!e i a .382i) maer "he .3r.or"e! .ar"er# are 83! o2* "o .er#o 'ho re2*

3.o "he re.re#e"a"io5 I" 'o32! 8e remar6a82e "o reD3ire re2ia)e 3!er #38#e)"io B 83" o" 3!er A5

S"i22 i "he 8e#" rea!i$ of 4a7 (if he ha# ma!e #3)h re.re#e"a"io or )o#e"e! "o i"# 8ei$ ma!e i a

.382i) maer he i# 2ia82e "o #3)h .er#o5 Who i# #3)h .er#o The o8%io3# )a!i!a"e i# "he .er#o

!e#)ri8e! ear2ier i "he #e"e)e0 a .er#o ("o 'hom #3)h re.re#e"a"io ha# 8ee ma!e< 'ho ha# o "he

fai"h of #3)h re.re#e"a"io< $i%e )re!i" "o "he a)"3a2 or a..are" .ar"er#hi.5 I o"her 'or!# #3)h

.er#o i# oe 'ho ha# re2ie! o "he re.re#e"a"io5 The .3r.or"e! .ar"er i# 2ia82e o2* "o oe 'ho ha#

re2ie!

Se)"io :> UPA e2eme"#

4i7 Ho2! *o3r#e2f o3" a# a .ar"er

4ii7 P3r.or"e! .ar"er ha# "o 6o' "ha" *o3 are ho2!i$ *o3r#e2f o3" a# a .ar"er

4iii7 Re2ia)e

(i/) Gi%e )re!i" ha# )re!i" 8ee e,"e!e! here Before ae !e2i%er# 'i!$e"# he "e22# her "ha""here i# o .ar"er#hi.5 If !e2i%er* ha! "o 8e .ai! for "he "here 'o32! ha%e 8ee a e,"e#io

of )re!i"5

69


21/30

:> 2imi"a"io .ar"er a! .3r.or"e! .ar"er 2ia82e o "he )o"ra)" a# o .ar"er#hi. ha# re#32"e!

#ee :> 487 UPA

Re%i#e! Uiform Par"er#hi. ;J

O2* re#"a"e# "he UPA5 Ar$3me" a$ai#" 2i"era2 i"er.re"a"io 'i"h #3)h a firm 'e22 re#.e)"e! r32e

from )ommo 2a' i# "ha" 8efore 8ei$ ma!e .ar" "he 2e$i#2a"3re #"a"eme" 3!er #e)"io :> )omme"

"ha" #ho32! e,.re##2* #"a"e "ha" a )ha$e i "he 2a' i# mea"5 Ca 8e ar$3e! 8o"h 'a*# a# 8e"'ee "he

"'o if ha! "o r32e "he r32e "ha" e#"o.e22 8a#i# )a 8e 3#e! i a8#e)e of e,"e#io of )re!i" a# o"her'i#e

"here i# o 2ia8i2i"*5 I "he ;J #e)"io oe o2* ee! "o e"er i"o "he "ra#a)"io "o ha%e 2ia8i2i"* )re!i"

e,"e#io i# o" ee!e!5

MYNOTES

:5 Thi# i# a .3r.or"e! ."#h. D3e#"io5 ae i# a .3r.or"e! .ar"er5 The D3e#"io i# 'he"her "hi#

e$a$eme" #he e"ere! i"o 'i"h Emi2* 8i!# /i)65 U!er :> "here are e2eme"#< 'hi)h m3#" 8e

#a"i#fie!5 4See a8o%e7 S.e)ifi)a22*< "he e,"e#io of )re!i" i# i D3e#"io5 Before ae !e2i%er# "he

'i!$e"#< "here i# o e,"e#io of )re!i"5 Af"er !e2i%er< "here i# a e,"e#io of )re!i"5 Thi# i223#"ra"e#

"he !iffere)e 8e"'ee a .ar"er a! a .3r.or"e! .ar"er5 The .3r.or"e! .ar"er )ao" )rea"e

2ia8i2i"* for "he ."#h. or "he .ar"er5

=5 U!er RUPA ;J here e"eri$ i"o a "ra#a)"io i# eo3$h "o 8i!5 The )omme" i ;J #a*#

"here #ho32! 8e o )ha$e 8e"'ee "he UPA a! RUPA5 The #e)o! ar$3me" i# "ha" 'i"h #3)h a firm

a! 'e22-re#.e)"e! r32e i )ommo 2a'< "he )omme" #ho32! e,.re## "ha" "here i# a )ha$e5

So "he a#'er here i# "ha" 3!er ;J i" )o32! 8e ar$3e! ei"her 'a*5 Car#o #a*# he 'o32! 2i6e2* #i!e 'i"h

a e#"o..e2 8a#e ar$3me"5 (So i "he a8#e)e of a a)"3a2 e,"e#io of )re!i"< "here #ho32! 8e o 2ia8i2i"*5

Ko' "ha" "here i# o ar$3me" 3!er :> of UPA5 T re"ai# "he e,"e#io of )re!i" reD3ireme"5

PROBLEM . (pg.743) Par"er# a# Maa$er#>

@he


22/30

ii. @he" a$e $el"ing on defalt $le that pa$tne$s a$e gene$al agents and do not ha/e #nowledge that theagenc" was dest$o"ed b" the /ote

b. Matthew wold be liable to pa$tne$ship and othe$ pa$tne$s fo$ this action becase Matthew b$eached the dt"of lo"alt" to the pa$tne$ship.

4.

P$oblem .

Matt% Emil"% and Pal a$e pa$tne$sAa/e no w$itten o$ o$al ag$eement as to bsiness o$ affai$s1. Withot fi$st discssing matte$% Matt contacts :$$ow b$ead and cont$acted fo$ :$$ow to sell b$ead fo$ a wee#. :t the

same time% Pal cont$acted w wholesome ba#e$s fo$ p$chase of b$ead fo$ month.c. 's pa$tne$ship sbDect to liabilit" to a$$ow o$ wholesome

i. Liable to both% all pa$tne$s a$e agents fo$ the condct of pa$tne$ship bsiness% pa$tne$ship is liableand pa$tne$ is liable to both

d. :s among pa$tne$s% a$e eithe$ Matt o$ Pal liable to Emil" o$ to MEP fo$ cont$acting fo$ p$chase of b$eadwot conslting othe$ pa$tne$s2

i. @he" ha/e atho$it"% the" a$e not liable to eithe$ Emil" o$ MEPii. :$e "o left w defalt $le then2

iii. @he$e is no ag$eement limiting abilit"e. ,ppose Emil" has to pa"% these deli/e$ies a$e made and the bills a$e ne/e$ paid% and the" hit p Emil" fo$

the bill% wold Matt o$ Pal be liable to he$2i. @he" a$e on the hoo# fo$ pa$tne$ sha$e p$ofits and losses

ii. ,o it wold follow she has the $ight of indemnifaication to the othe$ pa$tne$s fo$ thei$ sha$e.6. Pa$tne$s meet to discss% Emil" and Pal li#es wholesome% Matt li#es :$$ow% Emil" and Pal li#e Wholesome. Matt

w$ites Wholesome lette$ den"ing atho$it" of Emil" and Pal and disclaim liabilit" on new p$chases f$omwholesome

a. F$oce$s is liable and matt is liable. Pa$tne$s maintain acconts within the scope of the pa$tne$ship% bt thepa$tne$ship can and often does own p$ope$t". ,o% nde$ $e/ised act% mst fi$st se pa$tne$ship% then se an"o$ all pa$tne$s

b. 'f pa$tne$ship has no assets and a$e nable to satisf" claim% then "o a$e able to go afte$ an" and all of thepa$tne$s

c. One $eason fo$ pa$tne$ships is pa$tne$ship p$ope$t" gene$all" spea#ing ma" not be loo#ed to b" thi$d pa$tiesto satisf" the pe$sonal debts of an" pa$tne$

d. Jo can alwa"s go afte$ the pa$tne$ship fo$ pa$tne$ship debts% bt "o cannot p$se the pa$tne$ship fo$ the

indi/idal obligations fo$ pa$tne$s that do not a$ise ot of pa$tne$ship inte$ests.e. @hs% "o cannot siee pa$tne$ship p$ope$t" to collect a pa$tne$s debt% bt "o can $ecei/e the pa$tne$s d$aw

f$om the pa$tne$shipf. What action cold Matt ta#e to a/oid liabilit" of p$chase to Wholesome2

i. Ae can dissol/e the pa$tne$shipii. nde$ pa$tne$ship law% "o ma" dissol/e pa$tne$ship at an" time

iii. Bt afte$ the deli/e$" of b$ead and completion of cont$act% "o cannot dissol/e the pa$tne$ship anda$e bond

i/. @hs if "o a$e a pa$tne$ at the time of the cont$act% then "o a$e bond to that cont$actg. What a$e the chances Matt will pa" wholesome enti$e amont of claim2

i. Jo cold p$obabl" fig$e ot some defensesii. ,o Matt is p$obabl" wold ha/e to pa"% bt p$obabl" not pa" the fll amont

iii. Ae needs to decide whethe$ the $etention of an atto$ne" wold be cost effecti/e $athe$ than Dst

pa"ingi/. ,ome liabilit" and e&pos$e

7. :fte$ losing the /ote% Matt cont$acts to b" b$ead again fo$ :$$ow. :ssme :$$ow doesnt #now of pa$tne$s /ote.a. :$e eithe$ MEP F$oce$s% Emil"% o$ Pal sbDect to liabilit" to :$$ow on accont of the cont$act2

i. @he" a$e p$obabl" going to be on hoo# on the cont$act becase the" ha/e appa$ent atho$it".ii. @he" a$e $el"ing on defalt $le that pa$tne$s a$e gene$al agents and do not ha/e #nowledge that the

agenc" was dest$o"ed b" the /oteb. Matthew wold be liable to pa$tne$ship and othe$ pa$tne$s fo$ this action becase Matthew b$eached the dt"

of lo"alt" to the pa$tne$ship.4. ,ppose Matt #nows Pal want to b" b$ead f$om Wholesome% and befo$e the" tal# to Emil"% Matt o$de$s f$om :$$ow

66


23/30

a. @he" a$e liable to both :$$ow and Wholesome becase the$e has been no limitation as to thei$ agenc" dties"et. 'n the absence of the /ote and :$$ow #nowing abot the conflict% the gene$al $le that pa$tne$s a$egene$al agents still applies to :$$ow and Wholesale.

i. @he co$t wold li#el" find appa$ent atho$it" with $ega$d to the thi$d pa$t" and a$$ow will loseii. 'n all of these% the thi$d pa$t" is ot of it% and ad/ances th$st to facilitate bsiness

iii. We #eel the thi$d pa$t" ot of these disptes and we dont want the thi$d pa$t" to hi$e detecti/es.b. :s amongst the pa$tne$s% the$e is p$obabl" a b$each claim and the$e is an implied implicit nde$standing that

nothing be done ntil the" $esol/e the conflicting /iews.

c. :s a matte$ of p$oof% it is mch mo$e difficlt than if "o ha/e the fo$me$ /otesYo3 ha%e a ar$3me" of !eia8i2i"*< 3!er#"a!i$ "ha" 3"i2 'e a)"3a22* ma!e a !e)i#io< "he #"a"3# D3o 'o32! o))3r

PROBLEM .H (pg.743) Limi"e! Lia8i2i"* Com.aie#

Lc" is membe$ of Belles 'ce ;$eam ,hop% LL;% a membe$managed limited liabilit" compan" o$ganied nde$ theLL;:. @he LL; has two othe$ membe$s% Ma$" and Pala.

@he LL; holds title in its name to a bilding Dst off the town s


24/30

's less impo$tant in la$ge sweatshopsOnce "o inc$ease the nmbe$s% "o dec$ease the possibilities of nanimit"

Jo ma" ha/e a spe$spe$ maDo$it" $e


25/30

Fene$al $le gene$al pa$tne$s decision shold stand in the absence of ci$cmstance% the limited pa$tne$s ha/e no$ight of cont$ol o/e$ the pa$tne$ship

:5 A* re2ief i "hi# )a#e a%ai2a82e for "he Limi"e! Par"er#

a5 The ma""er i# o" !i#.o#i"i%e 3!er )o"ra)"5 Tha" i# a 8e""er .2a)e for #.e)ifi) .ro82em# or

)o)er#< 2i6e .ro82em#5 MBCA 5;= "hi# a..2ie#< 'i"ho3" i" a* K "r*i$ "o 2imi" "he B1/ i#

%oi!5 I" ii"ia22* ha# "o 8e 3aimo3# 83" i" )a 8e ame!e! 2a"er5 Co"ro2 i# amo$ GP5 Wi"h

LLC< LP< LLP "ho#e frame 'or6# are !efa32" r32e#< "he PTSHP a$m" )a .ro%i!e o"her'i#e5

No' "ha" i# o" 3re#"ri)"e!< 83" i" i# %er* 8roa!5 Here 'e #im.2* ha%e a !i#a$reeme" a8o3".o2i)*< 83" .o2i)* i# "o 8e !i)"a"e! 8* "he B of /5 GP ha# fi! !3"ie# "o LP< 83" GP i# e##e"ia22*

3!er "he B 3!$eme" r32e5 There i# a !i#a$reeme" a8o3" .o2i)*< 83" "ha" i# #e" 8* GP5 Fi! o3"

'ho !i)"a"e# .o2i)*< GP or B of /< .ro8a82* 8o"h< a! #.e)ifi)a22* o" LP#5

85 The RUPA a! LPA 4:>7 ha%e )omme"ar* i #e%era2 .2a)e#< 'hi)h e,.re##2* #"a"e# "ha" "he

.ri)i.2e# are 8orro'e! from Cor.ora"e 2a'5

)5 I# "he "hre#ho2! i##3e 'ho ha# a3"hori"* "o ma6e !i#"ri83"io We22 :#"fi! o3" 'he"her *o3 are

!ea2i$ 'i"h "he !efa32" r32e#5 =!'ha" are "he !efa32" r32e# ;r!'ha" i# "he a..2i)a8i2i"* of "he 8

3!$eme" r32e

!5 U!er RUPA @5J@4e7 A .ar"er o'e# a !3"* of )are "o "he .ar"er#hi. a! "he o"her .ar"er# "o

a)" i "he )o!3)" of "he 83#ie## of "he .ar"er#hi. i a maer "ha" !oe# o" )o#"i"3"e $ro##

e$2i$e)e or 'i22f32 mi#)o!3)"5 A error i 3!$me" or a fai23re "o 3#e or!iar* )are i# o"

$ro## e$2i$e)e

e5 No"e Ma* of "he #o3r)e# for "he 8 3!$eme" r32e are a!mi""e!2* !eri%e! from )or.ora"e 2a'5

See Te," .a$e ;?< (A# a..2ie! i e%a23a"i$ "he !e)i#io# of )or.ora"e offi)er# or !ire)"or#< "he

83#ie## 3!$me" r32e .ro"e)"# "hem from 2ia8i2i"* o a))o3" of 83#ie## 3!$eme"# ma!e i

$oo! fai"h

A !ire)"or or offi)er 'ho ma6e# a 83#ie## 3!$eme" i $oo! fai"h f32fi22# hi# !3"* of )are

IF

4i7 he i# o" i"ere#"e! i "he #38e)" of hi# 83#ie## 4no selfdealing74ii7 he i# iforme! 'i"h re#.e)" "o "he #38e)" of hi# 83#ie## 3!$me" "o "he

e,"e" he rea#oa82* 8e2ie%e# e)e##ar*0 a!

4iii7 he ra"ioa22* 8e2ie%e# "ha" hi# 83#ie## 3!$me" i# i "he 8e#" i"ere#" of "he

)or.ora"io

PROBLEM H.4 (pg.7H) /3"* of Lo*a2"*

;o/alt and Aigh we$e co$po$ate office$s and sha$eholde$s in ;onc$ete ,"stems% 'nc. (;,'). ;o/alt owned 65 of thestoc# and Aigh owned the $emaining H5 of the stoc#. Both men $ecei/ed $emne$ation f$om ;,' in the fo$m ofsala$ies and bonses.

'n late 18H1% afte$ both Aigh and ;o/alt had become co$po$ate office$s of ;,'% the" fo$med a pa$tne$ship. @hepa$tne$ship boght land and bilt an office and wa$ehose bilding. 'n eb 18H7% ;,' leased the bilding f$om thepa$tne$ship fo$ a fi/e"ea$ te$m. ollowing the e&pi$ation of the initial te$m of the lease% ;,' $emained a tenant of thebildingN the co$po$ation and the pa$tne$ship o$all" ag$eed to ce$tain $ental inc$eases. @he co$po$ation madesbstantial imp$o/ements to the leasehold. nde$ the o$iginal lease an" imp$o/ements to the p$emises we$e to acc$eto the p$emises we$e to acc$e to the pa$tne$ship pon te$mination of the lease.

'n -ec% 18H3% ;o/alt $esigned his position as an office$ of ;,' and went to wo$# fo$ one of its competito$s. ;o/alt%

howe/e$% $emained a pa$tne$ w Aigh in the owne$ship of the land and the bilding $ented to ;,'. On an 8% 18H8%;o/alt w$ote to Aigh demanding that the monthl" $ent fo$ the pa$tne$ship $eal estate leased to ;,' be inc$eased fo$m=1%359 to =6%359 pe$ month. Aigh $efsed to inc$ease the $ent and too# no action to $enegotiate the amont of themonthl" $ent pa"able.

Iestion0 :ssming that =6%359 was the fai$ $ental /ale of the land and bilding% has Aigh b$eached his fidcia$"-t" as a pa$tne$2

ANSWER

RUPA @J@487 & UPA =:

65


26/30

Hi$h o'e! hi# Co%a2"< hi# .ar"er< a fi!3)iar* !3"*< 'hi)h e)e##ari2* e)om.a##e# "he !3"* of e,er)i#i$ $oo!

fai"h< hoe#"*< a! faire## i hi# !ea2i$# 'i"h him a! "he f3!# of "he .ar"er#hi.5 The fi!3)iar* !3"* e,i#"#

)o)3rre"2* 'i"h "he o82i$a"io# #e" for"h i "he .ar"er#hi. a$reeme" 'he"her or o" e,.re##e! i "hem5 I

a* fi!3)iar* re2a"io#hi.< "he 83r!e of .roof #hif"# "o "he fi!3)iar* "o #ho' 8* )2ear a! )o%i)i$ e%i!e)e

"ha" a "ra#a)"io i# eD3i"a82e a! 3#"5 Where "here i# a D3e#"io of 8rea)h of a fi!3)iar* !3"* of a maa$i$

.ar"er< a22 !o38"# 'i22 8e re#o2%e! a$ai#" him< a! "he maa$i$ .ar"er ha# "he 83r!e of .ro%i$ hi#

io)e)e5

A a$reeme" e"ere! i"o "ha" re#32"# i o fi!3)iar* !3"* of "he maa$i$ $eera2 .ar"er i# %oi! a# %io2a"i%eof .382i) .o2i)*5 Fi!3)iar* !3"* of 2o*a2"* remai# a! i"o o" e,"i$3i#he! 8* )o"ra)" 32e## a #.e)ifi)

ma""er i# 'ai%e! af"er f322 !i#)2o#3re a! "he o"her .ar"ie# i# o"ifie! of "he a8i2i"* "o ha%e )o3#e2 .re#e"5

Here< a##3mi$ "ha" "he Q=


27/30

4)7 A .er#o o"ifie# or $i%e# a o"ifi)a"io of a fa)" "o ao"her 8* "a6i$ #"e.# rea#oa82* reD3ire! "o iform "he

o"her .er#o i or!iar* )o3r#e< 'he"her or o" "he o"her .er#o 6o'# "he fa)"5

4!7 A .er#o re)ei%e# a o"ifi)a"io 'he "he o"ifi)a"io

4:7 )ome# "o "he .er#o9# a""e"io0 or

4=7 i# !32* !e2i%ere! a" "he .er#o9# .2a)e of 83#ie## or a" a* o"her .2a)e he2! o3" 8* "he .er#o a# a .2a)e for

re)ei%i$ )omm3i)a"io#5

4e7 A e"i"* 6o'#< ha# o"i)e< or re)ei%e# a o"ifi)a"io of a fa)" 555 'he "he i!i%i!3a2 )o!3)"i$ "he

"ra#a)"io for "he e"i"* 6o'# or i a* e%e" 'he "he fa)" 'o32! ha%e 8ee 8ro3$h" "o "he i!i%i!3a29#

a""e"io ha! "he e"i"* e,er)i#e! rea#oa82e !i2i$e)e5 A e"i"* e,er)i#e# rea#oa82e !i2i$e)e if i" mai"ai#rea#oa82e ro3"ie# for )omm3i)a"i$ #i$ifi)a" iforma"io "o "he i!i%i!3a2 )o!3)"i$ "he "ra#a)"io for

"he e"i"* a! "here i# rea#oa82e )om.2ia)e 'i"h "he ro3"ie#5 Rea#oa82e !i2i$e)e !oe# o" reD3ire a

i!i%i!3a2 a)"i$ for "he e"i"* "o )omm3i)a"e iforma"io 32e## "he )omm3i)a"io i# .ar" of "he

i!i%i!3a29# re$32ar !3"ie# or "he i!i%i!3a2 ha# rea#o "o 6o' of "he "ra#a)"io a! "ha" "he "ra#a)"io

'o32! 8e ma"eria22* affe)"e! 8* "he iforma"io5

Therefore< ha! "he e"i"* .erforme! rea#oa82e !i2i$e)e< "he "he* 'i22 8e !eeme! "o ha%e 6o'2e!$e5 B3"

'ha" i# rea#oa82e !i2i$e)e< 'he "he* mai"ai rea#oa82e ro3"ie# for )omm3i)a"i$ #i$ifi)a"

iforma"io "o "he i!i%i!3a2 a)"i$ for "he e"i"* 4Tom7 a! "here i# rea#oa82e )om.2ia)e5 So ha! "he e"i"*

e#"a82i#he! a ro3"ie 'here .ar"er# 'o32! )omm3i)a"e "o "he )o"ro22i$ .ar"er 2i6e Tom< "he La' Firm

'i22 8e !eeme! "o ha%e 6o'5 So 32e## Pa32 ha! a# .ar" of hi# !3"ie# "o )omm3i)a"e A##o)ia"e# 8eha%ior< "he

La' Firm 'i22 o" 8e !eeme! "o ha%e 6o'2e!$e5

PROBLEM 3.7 (pg.497) Time from 'hi)h No"ifi)a"io of Ko'2e!$e Affe)"# Pri)i.a2Owne$ owns and ope$ates Mall. :lan and Bett" a$e leasing agents fo$ the Mall and sha$e an office site in the Mall.:s sch% each is atho$ied to negotiate and to sign% on Owne$s behalf% leases co/e$ing space in the Mall. On $ida"%Bett" leased space to Lase$% who planned to open a lase$tag game in the Mall.

n#nown to Bett"% on Monda"% :lan had leased space in the Mall to :$cade% who planned to open a /ideo a$cade inthe Mall. :s a condition fo$ signing the lease% :$cade insisted on the inclsion of an *e&clsi/it" p$o/ision+ nde$which Owne$ ag$eed not to lease space in the Mall to an" othe$ a$cade o$ amsement cente$. :lan fo$got to tell eithe$Owne$ of Bett" abot the e&clsi/it" p$o/ision inclded in :$cades lease.

Iestion0 :ssme that :lan had atho$it" to ag$ee to the inclsion of the e&clsi/it" p$o/ision% and that Owne$ will

be liable to :$cade fo$ b$each of cont$act. :ssme f$the$ that Owne$ will also be liable fo$ special damages if it#nowingl" b$eached the lease w :$cade. Will Owne$ be $esponsible fo$ special damages2

A2a< a a$e" for O'er< ha# )om.2e"e a3"hori"* "o 8i! O'er5 Si)e A2a 6e' a8o3" "he )o"ra)"

.ro%i#io< "ha" 6o'2e!$e )a 8e im.3"e! "o O'er< "he .ri)i.a25 The !o)"rie of Im.3"e! Ko'2e!$e

i%o2%e# ho2!i$ a .ri)i.a2 "o "he 'ro$# )ommi""e! 8* hi# a$e"5 Thi# !o)"rie !ra'# i"# #o3r)e# from "he 2a'

of re#.o!ea" #3.erior5 The e,.e)"a"io i"ere#" of "he o"her .ar"* i# irre2e%a" i a im.3"e 6o'2e!$e )o"e,"

81) "he 6o'2e!$e a" i##3e i# a)D3ire! 8* "he a$e" "hro3$h mea# o"her "ha a !e2i8era"e effor" 8* "he o"her

.ar"* "o )o%e* ifo "o "he .ri)i.a25

R=! ;:

Thi# 6o'2e!$e i# (im.3"e!+ "o "he .ri)i.a2 81) "he a$e" ha# a !3"* "o )o%e* i" "o him5 (U2e## o"her'i#e

a$ree!< a a$e" i# #38e)" "o a !3"* "o 3#e rea#oa82e effor"# "o $i%e hi# .ri)i.a2 ifo 'hi)h i# re2e%a" "oaffair# e"r3#"e! "o him a! 'hi)h< a# "he a$e" ha# o"i)e< "he .ri)i.a2 'o32! !e#ire "o ha%e a! 'hi)h )a 8e

)omm3i)a"e! '1o %io2a"i$ a #3.erior !3"* "o a "hir! .er#o5+

The o2* ECEPTION "o "he im.3"e! 6o'2e!$e !o)"rie i# "he A!%er#e I"ere#" !o)"rie5 U!er "hi#

e,)e."io< if a a$e" i# a)"i$ a!%er#e2* "o "he .ri)i.a2 a! e"ire2* for hi# o' or ao"her9# .3r.o#e#< hi#

6o'2e!$e i# o" im.3"e!5 The fa)"< ho'e%er< "ha" a a$e" ha# )of2i)"i$ $oa2# 42i6e a !e#ire "o ear

)ommi##io a! "h3# 6ee. #i2e" a8o3" a o3"#"a!i$ eD3i"*7 'i22 o" ri#e "o "he 2e%e2 of a a!%er#e i"ere#"5 I"

i# o2* 'he "he a$e" "o"a22* a8a!o# "he .ri)i.a29# 83#ie##< #3)h a# "a6i$ a 8ri8e "o 6ee. D3ie"< "ha" "he

6o'2e!$e 'i22 o" 8e im.3"e!5

6H


28/30

A ECEPTION "o "he A!%er#e I"ere#" E,)e."io i# "he So2e A)"or R32e5 Thi# r32e a..2ie# 'he "he a$e"J:4?7 O a..2i)a"io 8* "he ."#h. or ao"her .ar"er< "he .ar"er9# e,.32#io 8* 3!i)ia2!e"ermia"io 81)

"he .ar"er e$a$e! i 'ro$f32 )o!3)" "ha" a!%er#e2* a! ma"eria22* affe)"e! "he ."#h.

83#ie##0

.ar"er 'i22f322* or .er#i#"e"2* )ommi""e! a ma"eria2 8rea)h of "he ."#h. a$reeme" or of a

!3"* o'e! "o "he ."#h. or "he o"her .ar"er# 3!er @J@0 OR

"he .ar"er e$a$e! i )o!3)" re2a"i$ "o "he ."#h. 83#ie## 'hi)h ma6e# i" o" rea#oa82*

.ra)"i)a82e "o )arr* o "he 83#ie## i ."#h. '1 "he .ar"er5

RUPA J:4:7 3!i)ia2 e,.32#io /OES NOT !i##o2%e "he .ar"er#hi. 4e%e i ."#h. a" 'i2275

/efa32" R32e E,.32#io a22o'# "he o"her .ar"er# "o 2ea%e 4"o !i##o2%e "he .ar"er#hi.7 UNLESS "he

."#h. a$reeme" .ro%i!e# !iffere"2* 4"he !efa32" r32e !oe#9" a..2*75

PROBLEM 15.H (H43) /i##o)ia"io of O'er# from Firm#

Kidcia$" Limits on Rights to -isassociation and -issoltion

Feo$ge and A.B. a$e pa$tne$s in ,anta Ma$ia Linen ,ppl"% which was fo$med in -ecembe$% 1848% fo$ the p$pose ofcondcting a linen sppl" bsiness in ,anta Ma$ia% ;alifo$nia. @he pa$tne$s ag$eed that Feo$ge wold act asmanaging pa$tne$. -$ing he fi$st two "ea$s% each pa$tne$ cont$ibted app$o&imatel" =47%999 to the pa$tne$ship. @hepa$tne$s ha/e no othe$ w$itten o$ o$al ag$eements $ega$ding the pa$tne$ship o$ its affai$s.

68


30/30

$om 1848 to 185H% the pa$tne$ship lost app$o&imatel" =6%999. -$ing 1853% !andenbe$g :i$ o$ce Base openednea$b"% and bsiness began to imp$o/e. @he pa$tne$ship ea$ned =7%364.41 in 1853 and =6%636.79 in the fi$st th$eemonths of 1858. @he pa$tne$ships chief obligations a$e =4H%19.76 owed to Mission ,ppl" ,e$/ice on open accont%and =16%H84.61 owed to Ban# of :me$ica.

Mission ,ppl" ,e$/ice% which is wholl" owned b" Feo$ge% has sold the pa$tne$ship all linen and machine$" sed inthe da"toda" ope$ation of its bsiness fo$m Mission ,ppl" ,e$/ice. ,ince 1848% the pa$tne$ship has paid Mission,ppl" ,e$/ice a total of =674%114.74. @he p$oceeds of the loans f$om Ban# of :me$ica was sed to pa" Mission

,ppl" ,e$/ice.

'n :p$il% 1858% Feo$ge dissol/ed the pa$tne$ship% and demanded that it be li

Documents

AGENCY PProblems - US Law