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1Basic concepts.


Employee-employer; principal-agent and independent contractor. An

agent can bind the principal in contract. Liability for those who hire
and independent contractor (only if you hire an idiot).
Employer is liable for the torts of the employee committed within the
scope of employment. For example, if the employee commits fraud or
negligence the employer is liable.
Title VII Protections. Race, religion, color, national origin and sex.
Applies to
employers with 15 or more employees.
New York Human Rights Law: Adds sexual orientation, marital status,
domestic violence victim. 4 or more employees.
Employment at will and for a term.
When are questions concerning drug usage and alcohol usage legal?
Arrest and conviction records. When can these questions be asked? 11
or more rule.

Agency, how formed.


Contractual or consensual.
Attorney in fact. Power of attorney. When used and needed.
By emergency.
By operation of law by statutory provisions: corporations, driving in
another state, etc.
Ratification. Once the principal ratifies, she cannot change her mind

Scope of Authority: Contract issue.


Apparent authority. Created by the principal and is not intended.

the principal dies, or the agent disobeys, apparent authority continues
unless the agents authority is cut off by the principal or by the
principals estate (Bad Boy rule). Apparent authority is automatically
cut off if there is a court proceeding. For example, if a person is
declared incompetent by a court, apparent authority by all agents is
automatically revoked.

Who can act as an agent?

Must be sui juris. Minors can act as agents.

Who can act as a principal?


Court appointment guardians. Minors can still act as principals even if

a court appoints a guardian to protect their money (17 guardian).
Those that are disabled can still acts as principals if they are sui juris
even in they have a guardian appointment for them (17 A guardian).
Those that are declared incompetent by the court, can no longer act as
principals (Mental Hygiene Law Article 81).

Types of agents.

Disclosed and undisclosed. This issue deals with contracts not torts.
Understanding of indemnification and breach of warranty of authority.
Agents are fiduciaries. If the agent exceeds his authority, either actual
or apparent authority, the principal sues the agent for fiduciary breach.
If the agent never had the authority the third party cannot hold the
principal liable so she sues the agent for breach of warranty of

Termination of agency.
1. Agreement, principal revokes authority, or agent renounces.
2. Review The Bad Boy Rule.
Partnership Law.

Definition of a partnership. Must be for a profit.

Fook Rule. All partners and the partnership are liable in contract and

The Biggie Smalls Rule. Creditors are not bound by agreements by the


The JA Rule. All partners must agree to add other partners. When a
new partner is added, it is a new partnership.


The Hit Me Rule. Liability on partners and the partnership.


Lets Hold Hands Rule. Profits are shared the same as losses and both
equally if nothing is stated.


The Lo Rider Rule.

How is a partnership taxed?
informational return only.

It files an


The DWT Rule. Dissolved wind up and terminate.


LBD (Lady Boss is Dead Rule).



Lets Make a Deal Rule. Make a deal with the executor or trustee in
bankruptcy so the old partnership can continue as a new partnership
without going out of business.


The Payout Rule. Pay creditors, return capital, distribute profits.


The DBA Rule. Does not form the partnership.


Throw It In the Circle Rule. Once you give property to the partnership it
can only be used for partnership purpose (capital). Capital is assets
that were not purchased with partnership property.


You Cant Touch Me Rule.

What is the liability for a new partner in a
new partnership where the partners in the old partnership are being


Difference between Tenant and Partnership.

Joint tenant right of
survivorship and tenants in common.
Partnership property must be
used for partnership purposes.


How Do Partners Bind the Partnership in contract? Actual authority.

Apparent authority which they create themselves if it relates to the
business. Having no authority but dealing with someone you dealt
with in the past (Bad Boy Rule). Apparent authority always exists when
Settle a claim, Insure partnership property or a Trading
partnership borrows money.


The CSI Rule. Unanimous consent of all partners is required when you
Confess a Judgment, Sell the business, or make it Impossible to
carry on the business.


Among other situations, when can a person be liable although she is

not a partner? Answer: She gives a loan to the partnership, she takes
profits from the partnership, she owns property being used by the

Lady Boss always dies you cant agree

partnership. Only the sharing of profits is prima facie evidence that

you are a partner. Understand the concept of prima facie.

Dissolution of a Partnership. If a partnership is at will and a partner

leaves no damages can be obtained against the partner who left. The
partnership must dissolve, wind up and terminate unless an agreement
can be made to continue as a new partnership. If the partnership is for
a term the remaining partners can bond the interest of the person who
left and withhold payment until the partnership ends.


Court Order.
If a partnership is for a term, a court order can be
obtained to dissolve if as the law provides a partner is a lunatic, the
business can be carried on at a loss or the partners cannot agree.


A partnership may be formed orally or in writing.


You Can Always Charge Rule: If a person has a judgement against a

partner unrelated to the partnership, he can ask the court for a
charging order to receive his profits.
It does not matter of the
partnership is at will or for a term. If the profits are small, the creditor
can then ask the court that the partnership be dissolved to receive that
partners interest after termination. The court, however, can only
dissolve a partnership if it is at will, not for a term.

Additional employment law issues:



Defamation per se:

Trade or business, committed a


Non complete agreements vs. non-solicitation agreements.