Upgrade to remove ads
Business Law, Final Review Part 2, and Business Associations
Terms in this set (63)
When an agent has actual authority, the principal, third party and agent are all bound to each other, and the principal can reimburse the agent.
Apparent Authority, but not actual authority
If the agent has this, the agent, third party and principal are bound to each other, and the agent reimburses the principal.
No Actual or Apparent Authority
If the agent has this, then the agent and third party are bound to each other, and the principal has no association.
Federal/State Question of Jurisdiction
Federal Law, or $75,000 and Diversity of Citizenship.
If it's a federal law, jurisdiction is
That you get to chose which state/federal courts.
Diversity of Citizenship is based on
Principal place of business and headquarters.
When determining which state, the plaintiff
Has no say as far as jurisdiction is concerned.
When determining which state, the defendant
Must has minimum contacts, based on principal place of business, and headquarters.
In appellant courts.
Mirror Image is common law
And applies to intangibles and services.
Battle of Forms is UCC law
And applies to goods.
Mirror Image Law
Offer and Acceptance must be same unless it's a counteroffer, and this applies to services.
Battle of the Forms
Quantity, Price, Delivery is all that matters, and is a part of UCC.
Statute of Frauds, Contracts can be verbal
When they apply to marriage, less than $500, and less than 1 year.
Statute of Frauds, contracts must be in writing
With land, marriage +, $500 + UCC, 1 year or more, and guarantor agreements.
Cosigner, and usually required to be in writing for statute of frauds.
Exception to when Land must be in writing
Part performance with a down payment, or moved in and made valuable improvements.
Exception to when a $500 UCC purchase must be in writing
When it's specially manufactured, or there is an admission in court.
Guarantor must sign a written contract unless
Their main purpose is for their own economic benefit.
Benefit needs to be in my pocket.
Tort of Contractual Interference
Employer/Employee have a contract, employee goes to new employer. Original employer can sue if the new employer knows ahead of time of employment, and induced other employee.
A part of the tort of contractual interference, when the new contract is worth more.
Tort Liability for Againt
Third party can sue principal for fraudulent misrepresentation, and agent can be reimbursed from principal if they had "clean hands". Applies to agent employee and independent contractors.
Requires duty, breach, cause, and harm, and third party has to show principal did something wrong. Applies to both agent employees, and independent contractors.
Can only be about employees, third person sues principal for tort committed within scope of employment, and principal can reimburse agent.
Selecting a business association based on
Industry Areas, Ease of formation, Taxation, External Personal Liability, Management and Control, and Continuity
Pass-Through Taxation, and Separate Tax Entities
External Personal Liability (torts, contracts, creditors, lients, etc.)
Unlimited Liability, Limited, Combination of Both
Unlimited Liability (external personal liability)
Plaintiff can go after the owner's personal estate.
Limited (external personal liability)
Owner only liable up to their capital contribution.
Management and Control
Unlimited vs. Restricted
When the owners death, bankruptcy, or withdrawal dissolves the association.
Transferability includes 2 Interests
Financial Interest, and Management Interest
"Right to Profits", may be assigned freely, absent an agreement stating otherwise.
Right to participate in control (i.e. become an owner)
Sole Proprietorship and Corporations
Are both freely transferable as far as management interests are concerned.
When it comes to management interests, most business associations
Require consent of all owners (partners or members)
Other Legal Factors in Selecting a Business Association
Business Licenses, General Name Requirements and Rules, Domain Name Registration Requirements.
Sole Proprietorship is one person, created
With no formalities; no required documents. Pass-Through basis tax structure, unlimited liability.
Sole Proprietorship Default Structure
When one person engages in business.
Sole Proprietorship Interest
May transfer both management and financial interest at any time.
Dissolution of Sole Propreietorship
This dissolves upon death of owner.
Unincorporated business, consisting of two or more persons who co-own a business for profit.
General Partnership Created
With no formalities; no required documents like a sole proprietorship.
General Partnership Default Structure
Two or more people
General Partnership Tax
Default is pass-through basis, but may elect other status.
General Partnership Liability and Interest
Unlimited Liability, interest unless otherwise agreed-may assign financial interest, but may ONLY assign management interest upon all Partner's consent.
Genera Partnership Control
Unless otherwise agreed-equal right to control business.
You do NOT need express consent from the other partners
To act for the partnership in a general partnership
Unless otherwise agreed-Equal Share (50/50)
Partnership Agreement in General Partnership
Written, Oral, or Implied
Components to Create a Partnership
Association of two or more persons, conducting a business for profit, which they co-own.
A general partnership conducts a business for Profit
Not one isolated event, and it doesn't have to generate profit, but it has to be set up for profit.
A general partnership is Co-owned
Co-owned a business NOT property, share in profits, and right to management/control.
Has at least one General Partner and one Limited Partner.
In a limited Partnership, the General Partner
Manages the Business
In a limited Partnership, the Limited Partner
Is the investor, "Money Guy"
To create a limited partnership
Must file a certificate of limited partnership with the state and comply with the LP statute.
Like a general partnership, the limited partnership is taxed
By default as a pass-through taxation, but the limited partnership may elect otherwise.
Liability in Limited Partnership, General Partner
Has unlimited liability
Liability in Limited Partnership, Limited Partner
Has limited liability-limited to capital contribution.
Profits/Loss Sharing in a limited partnership
Unless agreed otherwise-according to value of contribution each partner actually made (which is different than a general partnership)
Interest in a Limited Partnership, unless the agreement states otherwise
May assign financial interest, and may ONLY assign management interest upon all partners consent.
THIS SET IS OFTEN IN FOLDERS WITH...
Business Law, Week 11, Chapter 29, Part…
Business Law, Part of Chapter 15, and Midterm
Business Law, pptx. Week 3
Business Law, Chapter 3, and Soldano v. O'Daniels
YOU MIGHT ALSO LIKE...
Legal Studies Exam 4
OTHER SETS BY THIS CREATOR
Midterm 2, Stats
Chapter 14 of 15 Stats Quiz
Chapter 14 of 15 Stats Quiz
Chapter 13 of 15 Stats Quiz
OTHER QUIZLET SETS
business foundations: chapter one
Study Guide 11
GBL Final Quiz
Reproductive Tract Infection