Podcast
Questions and Answers
What is the primary goal in financing a business?
What is the primary goal in financing a business?
- To profit off of the debts of the business.
- To establish a reliable source of market grain for the business. (correct)
- To make money as a lender.
- To ensure the business operates smoothly and efficiently.
A franchisor can still be liable for the actions of their franchisee despite having contractual stipulations that state otherwise.
A franchisor can still be liable for the actions of their franchisee despite having contractual stipulations that state otherwise.
True (A)
What is the ultimate question when determining the extent of control a party has over another's actions?
What is the ultimate question when determining the extent of control a party has over another's actions?
How much control does the party have over the other's conduct?
What is the main test for determining whether a lessee is a independent contractor or an agent(employee)?
What is the main test for determining whether a lessee is a independent contractor or an agent(employee)?
Which of these is NOT a factor considered in determining the degree of control one party has over another in an agency relationship?
Which of these is NOT a factor considered in determining the degree of control one party has over another in an agency relationship?
The correct test for determining whether a lessee is an independent contractor or agent (employee) is whether the owner has retained the right to control details of day-to-day operation of the station.
The correct test for determining whether a lessee is an independent contractor or agent (employee) is whether the owner has retained the right to control details of day-to-day operation of the station.
What is the primary way in which a court evaluates the relationship between a franchisor and franchise?
What is the primary way in which a court evaluates the relationship between a franchisor and franchise?
Which of these is a factor that would most likely create a finding of an agency relationship, as opposed to an independent contractor relationship?
Which of these is a factor that would most likely create a finding of an agency relationship, as opposed to an independent contractor relationship?
Control over results vs. control over methods is key consideration for a court when determining if a principal-agent relationship exists?
Control over results vs. control over methods is key consideration for a court when determining if a principal-agent relationship exists?
The burden of proving that a special litigation committee is independent and acted in good faith is on the defendant corporation.
The burden of proving that a special litigation committee is independent and acted in good faith is on the defendant corporation.
What is the most common reason why courts will not pierce the corporate veil?
What is the most common reason why courts will not pierce the corporate veil?
What are the two key reasons why courts will pierce the corporate veil?
What are the two key reasons why courts will pierce the corporate veil?
What is the standard of review when evaluating a special litigation committee's decision to dismiss a shareholder derivative suit?
What is the standard of review when evaluating a special litigation committee's decision to dismiss a shareholder derivative suit?
When is demand to a board of directors excused?
When is demand to a board of directors excused?
What is the primary purpose of the demand requirement in a shareholder derivative suit?
What is the primary purpose of the demand requirement in a shareholder derivative suit?
A shareholder can bring a direct suit against a corporation if the corporation has denied them a contract right associated with shareholding?
A shareholder can bring a direct suit against a corporation if the corporation has denied them a contract right associated with shareholding?
What is a strike suit?
What is a strike suit?
What is NOT a requirement for a successful demand to the board of directors?
What is NOT a requirement for a successful demand to the board of directors?
Which of the following is NOT one of the three prongs of the Aronson demand excusal test?
Which of the following is NOT one of the three prongs of the Aronson demand excusal test?
A shareholder can bring a derivative suit to recover on a claim that is separate and distinct from that suffered by other shareholders
A shareholder can bring a derivative suit to recover on a claim that is separate and distinct from that suffered by other shareholders
Which of these is NOT one of the reasons why courts will generally not review the fairness of salaries in a derivative suit?
Which of these is NOT one of the reasons why courts will generally not review the fairness of salaries in a derivative suit?
A special litigation committee (SLC) can dismiss a shareholder derivative suit.
A special litigation committee (SLC) can dismiss a shareholder derivative suit.
A stockholder can bring a derivative suit if a special litigation committee declines to pursue an action that the stockholder believes is in the best interest of the company.
A stockholder can bring a derivative suit if a special litigation committee declines to pursue an action that the stockholder believes is in the best interest of the company.
If demand to a board of directors is excused, then a special litigation committee must be created to review the case.
If demand to a board of directors is excused, then a special litigation committee must be created to review the case.
A special litigation committee is only considered independent if it was not involved in the actions that prompted the derivative suit.
A special litigation committee is only considered independent if it was not involved in the actions that prompted the derivative suit.
What is the most important factor that the court analyzes when considering the independence of a special litigation committee?
What is the most important factor that the court analyzes when considering the independence of a special litigation committee?
A shareholder can initiate a derivative suit after demand was wrongfully refused, even if the corporation chose to dismiss the suit based on an SLC’s decision.
A shareholder can initiate a derivative suit after demand was wrongfully refused, even if the corporation chose to dismiss the suit based on an SLC’s decision.
Under the Zapata test, it is the shareholder’s burden to prove that the special litigation committee (SLC) did not act in good faith.
Under the Zapata test, it is the shareholder’s burden to prove that the special litigation committee (SLC) did not act in good faith.
Courts exercise a high level of scrutiny over the decision of a special litigation committee (SLC).
Courts exercise a high level of scrutiny over the decision of a special litigation committee (SLC).
A shareholder may not bring a derivative suit if the corporation has already agreed to assert an apparently valid claim against a third party, if the corporation is refusing to pursue an action that a shareholder believes is in the best interests of the company.
A shareholder may not bring a derivative suit if the corporation has already agreed to assert an apparently valid claim against a third party, if the corporation is refusing to pursue an action that a shareholder believes is in the best interests of the company.
What is the primary concern with the 'unity of interest' test for piercing the corporate veil?
What is the primary concern with the 'unity of interest' test for piercing the corporate veil?
In what situation is the 'enterprise liability' theory of piercing the corporate veil most apt?
In what situation is the 'enterprise liability' theory of piercing the corporate veil most apt?
Flashcards
What is an Agency Relationship?
What is an Agency Relationship?
A fiduciary relationship where a principal authorizes an agent to act on their behalf and subject to their control.
What are the 3 types of Authority?
What are the 3 types of Authority?
Actual Authority (express or implied), Apparent Authority, Inherent Agency Power.
What is Actual Authority?
What is Actual Authority?
When the Principal explicitly instructs the Agent to do something.
What is Express Actual Authority?
What is Express Actual Authority?
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What is Implied Actual Authority?
What is Implied Actual Authority?
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What is Apparent Authority?
What is Apparent Authority?
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What is Inherent Agency Power?
What is Inherent Agency Power?
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What is the most important factor in determining an Agency Relationship?
What is the most important factor in determining an Agency Relationship?
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What does 'Residual Control' refer to?
What does 'Residual Control' refer to?
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What is a 'Fully-Flexible Rent Payment'?
What is a 'Fully-Flexible Rent Payment'?
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What is the main factor in determining Personal Liability in Agency Law?
What is the main factor in determining Personal Liability in Agency Law?
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What is the 'Function over Form' principle in Agency Law?
What is the 'Function over Form' principle in Agency Law?
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What is a 'Semi-Flexible Rent Payment'?
What is a 'Semi-Flexible Rent Payment'?
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What is the 'Uniform Operations and Appearance' principle in Franchise Law?
What is the 'Uniform Operations and Appearance' principle in Franchise Law?
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What is the 'Centrally Imposed Uniformity' in Franchise Law?
What is the 'Centrally Imposed Uniformity' in Franchise Law?
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Why is Inherent Agency Power important?
Why is Inherent Agency Power important?
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What is the key principle behind Inherent Agency Power?
What is the key principle behind Inherent Agency Power?
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What is a Fiduciary Duty?
What is a Fiduciary Duty?
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What is the remedy for a breach of Fiduciary Duty?
What is the remedy for a breach of Fiduciary Duty?
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What is the Duty of Loyalty in Agency Law?
What is the Duty of Loyalty in Agency Law?
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What are Trade Secrets?
What are Trade Secrets?
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What is the 'Take-Me-Along Right'?
What is the 'Take-Me-Along Right'?
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What is a 'Partnership at Will'?
What is a 'Partnership at Will'?
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What is a 'Buy-Out Agreement'?
What is a 'Buy-Out Agreement'?
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What is the 'Departure Tax' in Partnership Law?
What is the 'Departure Tax' in Partnership Law?
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What is 'Limited Liability'?
What is 'Limited Liability'?
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What is 'Piercing the Corporate Veil'?
What is 'Piercing the Corporate Veil'?
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What is 'Enterprise Liability'?
What is 'Enterprise Liability'?
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What is the 'Undue Domination' Test for Veil-Piercing?
What is the 'Undue Domination' Test for Veil-Piercing?
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Study Notes
Introduction to Agency Law
- Agency is a fiduciary relationship where a principal authorizes an agent to act on their behalf and subject to their control.
- An agent acts on behalf of a principal and is obligated to act in the principal's best interest.
- There are three types of authority:
- Actual authority (express or implied)
- Apparent authority
- Inherent agency power
Agent vs. Independent Contractor
- A key distinction is determining whether a subordinate is an agent or an independent contractor.
- Actual agency relationships can be express (explicit agreement) or implied (inferred from conduct).
- Apparent agency arises when a principal leads a third party to believe an individual is their agent, creating a duty of care.
- Inherent agency power arises from the position/relationship between the principal and the agent, rather than expressed or implied authority
Fiduciary Obligations of Agents
- Agents owe fiduciary duties to their principals, including duties of loyalty, care, obedience, and accounting.
- Duties exist during and after the agency relationships.
- A breach of fiduciary duty occurs when an agent acts contrary to the principal's best interests.
Partnerships vs. Corporations
- Partnerships are relatively simple to form, with less formal requirements and fewer legal fees than corporations.
- Partnerships have unlimited liability: partners are personally liable for the debts of the partnership.
- Corporations provide liability protections for their owners. A key distinction is personal liability.
Limited Liability
- Limited liability protects shareholders from personal liability for corporate debts.
- A limited partnership has limited partners and general partners. Limited partners have limited liability.
- Veil piercing is a judicial action taken by a court to ignore the corporate formalities of a limited-liability organization in certain cases of fraud or injustice.
Derivative Litigation
- Direct actions are brought by a shareholder against a company or individual.
- Derivative suits are brought on behalf of a company against a third party (e.g., director) for the benefit of the corporation.
- A demand requirement often applies, and typically must be submitted to the corporation before litigating for its benefit.
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Description
Test your knowledge on agency law in this quiz covering the fundamental principles of agency relationships. Dive into the distinctions between agents and independent contractors, the types of authority, and the fiduciary obligations agents owe to their principals. Perfect for law students or anyone interested in legal principles.
