德州大學(xué)阿靈頓分校商業(yè)法律課筆記

BLAW53301-23-07TortsNegligenceAccidentaltort;Putoutaproductthatwasdangerous-youareliable.ThisphilosophytracesfromthelawthatifyoudealwithsomethingdangerousandthathurtssomeoneelseContractor/dynamite:100%liablebecausetheyaredealingwithsomethingthatisinherentlydangerous.RangersandFireworksCompany:bothareliableFirestonetiresareexample:EthicsEnron,WorldCom,Tyco-proventhattheyweredeceivinginvestorsFederalEEOLaws(possibleessayquestion)■CivilRightsAct-1964oIncludesallorganizationswith15ormoreemployeesoEnforcedbytheEqualEmploymentOpportunityCommissionInvestigatecomplaintsVoluntaryconciliation(onceadecisionituptothecompanytocomply)FilescasesinfederalcourtAgeDiscriminationinEmploymentActoEmployeeswhoare40-t-years(noupperlimit)oCoversorganizationswith20+employeesoEnforcedbyEEOCAmericanswithDisabilitiesActoProtectsthosewithdisabilitiesPhysicalormentalimpairmentthatsubstantiallylimitsamajorlifeactivity(doesnothavetoberelatedtowork)RecordofimpairmentexistsRegardedashavingsuchimpairmentoMustmakereasonableaccommodations,Reassignmarginalduties,ModifyworkscheduleModifytestingmaterialsPermittinguseofpaid/unpaidleaveoEnforcedbyEEOCPaper:Effort,citations,references:BOOKNOTESPRINCIPAL/AGENTAgency:youcouldbeoneifyouareimWhatdoyouneedtocreateanagency?Theagententersintocontractsfortheprincipal.Theagentdoesnothavetohavecapacity.Hecouldbeunderagehecouldbederanged.Theprincipalisboundonthecontractandhastohavecapacity.Whatisnecessarytocreateaprincipalagentrelationship?Doesnothavetobeacontract(oftenis)Isconsiderationrequired-SaleofLand:thatagreementhastobeinwriting(generally)NowritingisrequiredMusthavemutualconsent:Principalthattheagentactforhim/herAgencyiscreatedbyparties(haveunderstanding)canbecreatedbecauseanimpressionhasbeengiven(canbeinpublic)AgentowestheprincipalLoyalty(violatingyourdutyofloyalty:principalcanmaketheagentgiveittohimforwhathepaidforitanddoesnothavetopayacommission)DutyofObedience■DutyofreasonablecareoDutytonotifyprincipalofanythingthathemaywanttoknowIfhedoesn'tdothesethingshecansuetheagentfbrcontractdamages.Ifitamountstoatorthecansue.Theprincipalcanacquirethesecretprofit(bribesbelongtoprincipal)RemedyofthePrincipal:hedoesn'thavetopaytheagentanythingifheviolateshisdutyofloyaltyIfagenthasauthoritytohirethesubagentbecomesanagentoftheprincipalPage16Case:Decidedin1952(jutebox)RouteofcoinoperatedmachinesPrincipalasksagenttogoandpurchasearouteRPage18examplesCommentaonsubsection1PrincipalsdutiesPayhimPayhimExpensesContractualdutiesCooperatewiththeagentoIfyouenterintoadealtosellwidgets-youhavetosupplythemwiththewidgetsAgentcansuetheprincipalAuthorityKey,biggieaboutagencyWheredoestheagentgethisauthoritytoact?Actualauthority:whattheagentbelieves(reasonably)oExpress(hehaswhathewastoldthathehas)Couldbeoralorinwritinggivingtheagentinstructions/Authoritygrantedmistakenly:canstillbeexpressauthority.oImplied:expresslyhiresomeonetomanageyourstoreimpliesthatyouhireandfire,buyinventory,arrangeforcleaning,addecisions,etc.oCustomandusagecangiveyouimpliedauthority.oImpliedauthoritythroughacquiescenceoftheprincipal(hiresomeonetostoremanager:onedayyounegotiatewithunionandagreetoanewunioncontract(don'thaveexpressauthority)butthecompanyownersaysgoodjob.Afterawhileyoubelievethatyouhaveimpliedauthoritybecausetheybackyouup.oImpliedauthoritythroughemergencyornecessity:highestrankingpersononthescenehasimpliedauthoritytomakedecisionsoAbilitytodelegateanythingministerial(nodecisionmakinginvolved)TerminationofauthorityTimeActionisaccomplished(salesquotareached,ChangeincircumstancesLawmaymakethetransactionillegalIfagentorprincipalbecomesinsolventEitherpartybreechestheagreement(fireorquit)Agentorprincipaldies(doesn,tmateriftheyknow)deathorlossofcapacityAgenciesaregenerallyrevocableTruewithexcept:agencycoupledwithaninterestAowesb$,givesBauthoritytosellthelandandthenpaythemselveswhatAowesandextragoestoA.Aisprincipal,Bisagent,AborrowsmoneybutbeforeBmakesloanheuseslandassecurity.AgivesBPowertosellifIdon'tpay.Apparentauthority(to3rdparties)Basedonwhatimpressionstheyarebeinggivingbytheprincipaloragent(iftheprincipaldoesnotcorrectthe3rdparty)AgenthasnoauthorityoImposters:twocasesincasebook:negligentlyallowedhimtobebehindthereand3rdpartiesbelievedit.oLingeringapparentauthority:theindividualusedtoworkforyou.Indiciaofauthority.Peoplebelievethattheystillworkforyou.BLAW53301-30-07ActualAuthority(whatagentbelieves)ExpressImpliedApparentAuthority(Whatthirdpartiesbelieve)NoauthorityoImpostersoLingering(apparentauthority)■YoushouldgiveimmediatenoticetoallSomepresentactualauthorityoPrioractsoPosition:youhavecertainauthorityinthis.Assumethatthereissomelimitationsasfaras$amountandyouexceedInherentAuthorityoYoudon'thaveactuallyauthoritybutthirdpartiesdonotknowthatoHiredasbouncer:jobistokeeppeace:youbreaksomeone'sleg:youweren'tauthorizedbutitisclosetowhatyouactuallyhadtheauthoritytodo.Thereforetheprincipalisliable.oClosestthingwouldbepositionWehavebeendiscussingwaysinwhichtheagentmakestheprincipalliable.Netresultisthattheprincipalisliableinthecontract.VoluntarywaythataPrincipalbecomesliable:ratificationDrawing:caronroad,plotoflandonthesideoftheroad.Salesmanisdrivingdowntheroadandseesalotforsale.Hehasheardthathiscompanyislookingforapieceoflandresemblingthislot.Hemeetswiththeownerofthelandandsignsacontractonbehalfofthecompany.Ishiscompanyliabletobuythatland?No,becausehedoesn'thaveactualauthority,impliedauthority,noinherentorapparentauthorityasaSalesman.Thecompanyhastherighttogobackandsaythattheylikethecontractandapproveitbyratifyinghisactions.Ratification(p.13):uponratificationtheprincipalisbound.Principalmusttaketheentiretransaction,notjustthepartsthathe/shelikes.Ifthethirdpartyfindsoutthattheagentdoesnothaveauthorityandreceivesabetterofferhecanwithdrawfromtheofferbeforeitisratified.Thepartythatisnormallyboundonacontractistheprincipal.Howevertherearealsosituationswheretheagentisalsoliable(bond).FullydisclosedagencyoFactofagencyisknownoIdentityofprincipalisknownoAgentnotliable(bond)oPrincipalLiable(he/sheistheonlyonethatcanenforcethecontract)UndisclosedagencyoFactofagencynotknownoIdentityofprincipalnotknownoAgentisliableoPrincipalisliabletooPartiallyDisclosedagencyoFactofagencyknownoIdentityofprincipalnotknownoAgentisliableoPrincipalisliabletooThirdParty'srightsdependonJurisdiction.oTexas:TPcansuebothbutcanonlysatisfythejudgmentagainstoneofthem.Iftheagentfraudulentlyconcealstheidentityoftheprincipal,theprincipalcannotenforcethecontract.OriftheTPentersintoacontractwithAgencythatrequirestheTPtomeetrequirementsandthentheTPfindsoutthatitmustmeettherequirementsofthePrincipal,theTPcangetoutofthecontract.CASE:MorrisOilCo.v.RainbowOilfieldTrucking,Inc.

p-2Defendant:DawnPossessesstatelicenseFarmingtonRainbowDoesnothavelicenseAny$thatitmadeincontractstheywouldgivetoDawnandthenDawnwouldpaythemselvesfirstandthengivethemthenetprofits.Plaintiff:MorrisProvidedfueltoRainbow,whichtheydidnotQuestion:WhatistherelationshipbetweenDawnandRainbow?PrincipalandAgentDawnisliableforthecontractsofRainbowUponAppeal:thecourtsdeterminedthatitwasanundisclosedprincipal/agencyrelationship.RainbowwasliabletoMorrisbutsowasDawn.UnfortunatelyRainbowdidnothaveanymoneyleftsoDawnwasliable.HowevernoneofthiswasneedbecauseDawnratifiedthecontracttoMorris.Cantheagentoftheemployeemaketheprincipaloremployerresponsible?RespondeatSuperior:letthemasteranswerforthatTheonewhodoesthedamagemustactuallybeanemployeeoIfheisanindependentcontractortheprincipalwillnotbeliableTheywillhavetheirownbusiness,tools,facilityThereisaskillthattheindependentcontractorwouldhave,i.e.:distinctskill,TermofemploymentisfiniteUsuallysetfeeandpaidperjoboComesdowntowhetherornottheprincipalhastherighttocontrolwhattheemployee/agentdoes?Ifhedoesthanitisanagent.MustbeactingwithinthescopeofhisemploymentEstoppel:youractionscanmakeyouliableifthereisasituationthatyoushouldcorrect/stopbutdon't.i.e.Departmentstorewillbeliableforanindependentshoerepairmanwithintheirstoreiftheydonotnotifythepublicthatitisnolongerresponsibleforwhathappensinsaidarea.Extensionofapparentauthority.Principalcanbeliableforanindependentcontractorif:(bothwillbeliable)IndependentContractorisdoingsomethinginherentlydangerousoWindowwasher,fireworksIfyouknowingornegligentlyselectanindependentcontractwhohasaknownrecordofSomedutiesthatareoApartmentorrealproperty:hasadutytomaketheareasafe.Theyhireasecurityfirmtokeepitsafeandthesecurityguardfallsasleep.Theapt.ownerwillbeliable.Smoking:travelingsalesmanbumsdownahotelwhilesmoking.Morecourtsaresayingthattheemployerisnotresponsible.IntentionalTorts:Ifyouhaveauthorizedsomeonetouseforceinwhattheydoyouwillbeliablefortheiractions.Bouncer:faroutexampleofinherentauthority.Bouncerisauthorizedtousesomeforcebutgoestoofar.BillcollectorStoreManager:hurtsacustomerinascuffle.RespondeatSuperior.Hewastryingtoservehisemployeranditwentalittletoofar.Theprincipalisliable.Theprincipalwouldnotbeliableifheenteredintoafightwhenhewasnotdoingthecompany'sbusiness(sportsfight).HehasdepartedfromthescopeofhisworkHiredthesalespersontosaythings,hemakesstatementsthatarenottrue.Theprincipalwillbeliableforfraud(Principalcantakeactionagainstagent).Chapter2PartnershipPg.314ofstatutesPartnership:Associationoftwoormorepersonstocareonabusinessforthepurposeofearningaprofit.Isapartnershipanentity?Doesisrisetothelevelofbeing1.01.11(p.312)2.01(p.314)Partnershipisanentitydistinctfromitspartners.Itdoesnotmeanthatitisacorporationbutitcansueandbesued,ownpropertyinitsownnameandbeconsideredapartfromtheactualpartners.Texas:RevisedUniformPartnersAct(p.311)SomestatesdonotusetheRUPA-theyusetheUPAWewillonlybediscussingmainprinciples.Howdoyouformapartnership?Twopeoplegettogetherandplantostartabusinesswiththeideaofmakingaprofitinmind.Eachpartnerisanagentandaprincipalandtheymusthavecapacity.Donotneedawriting.Canbeoral.Onlyneedawritingifitisgoingtolastlongerthanayear.Partnershiphastobelegal.Truewithall:LimitedPartnership,LLC,p.321UniversalPointtoknow4.01gNewpartner:apersonmaybecomeapartneronlywiththeconsentofallotherp.3142.03a:sharingprofits,intentexpresstobepartnersparticipationsharinglossescontributingoragreeingtocontributemoney2.03b:NotapartnershipReceivingprofitsbutreceivingthemaswages,compensationortopayadebt.PayingrentPayinginterestonaloanPayingoffaformerpartnerReceivingpaymentforthesaleofsomethingtothepartnership2.03c:Itisnotnecessarytohaveanagreementtosharelosses.Youonlyhavetohaveanagreementtoshareprofits.Why,becauselossesfollowprofits.Example:Aownsavilla;Busesitasanartgallery.Arequires15%ofsalesofartwork.Needmorefactstodetermineifthisisapartnershiporlandlord/tenant.CASE:MartinV.Peytonp.28Peyton,Perkins,Freeman$2,500,000instokesinbonds9K.N.&K.Inreturn:K.N.&K.wasgoingtogivePeytoncollateral(speculativesecurities)andtheyweregoingtopayPeyton40%ofprofitsfromtheS&B(liquidassets).K.N.&K.wastousethesehighqualitysecuritiestogetbackontheirfeetandsecureloans.Despitethis,K.N.&K.wentunder.DebtorsarecomingafterK.N.&K.Peytontookoutalifeinsurancepolicyonthemanager(asadditionalcollateral)p.30Terms:Courts: NeededtodeterminedwhetherornotPeyton/FreemanandK.N.&K.arepartnersornot.Andisthe$2,500,000partnershipmoneyornot?Didtheytakeitoutaspartnersorasacreditor?Peytonhassomecontrolovertheirbusiness(abilitytoveto)EachmemberassignedtheirpartnershiptoPeytonandFreeman(theycanfireanyonewhenitwants),Peytonalsohasoptiontobecomeapartner.PeytonhadcontrolofK.N.&K,(theycanvetoloans),profits,Theydeterminethatitisacreditor(lender)protectingtheirloanbyhavingcontroloverabusinessthatputthemintroubleinthefirstplace.CASE:Lupienv.MalsbendenCarwaspaidforbutneverdelivered.Question:wasthisapartnership?Canyouhaveapartnershipbyestoppel?ABC(Principal/Pamtership)D(representstoaTPthattheyareapartner-eventhoughtheyarenotBank(TP)Dnevertoldthebankthattheyweren'treallyliablesowhenABCdefaultsonloan,Dwillbeliablebyestoppel.ABCD(ABCtellsTPthatDisapartner)Bank(TP)DdoesnotpaybackloanbuttoTPDisapartnerbecauseABCsaidso.ThereforeABCisliable.Sameasabove,butAdoesnottellTPthatDisapartner.Dcan'tpaybacksoonlyB&Careliableasindividual.PartnershipPropertyIfthepropertywaspurchasedinthenameofthepartnershiporA,asmemberofpartnershipthenitispropertyofthepartnershipIfpartnershipmonies/creditwereusedtopurchaseitispartofthepartnershipBuyitinthenameofapartnerwithnoindicationthattheyaretakingitaspartnersitwillbecomepropertyofthesoleindividual.p.323s5.01■PartnerisnotacoownerinpropertyoPartnerdoesnotownthepropertythatthepartnershipownsjustbecauseheisamemberofthepartnership.oApartnerownsaninterestinthepartnershipwhichmeansthatyouareentitledtoashareoftheprofits.(Creditorcoulduseachargingordertogetapieceofthoseprofitsforanindividualloan)p.312s1.0113■PartnershipInterest:op.323s5.02a■Apartnerspartnershipinterestisp.3204.01b■ABCpartnersA:$60kB:$30kC:$10k■Profitsthisyearare$9kAbsentofanagreementtheprofitsaresharedequallyAbsentofanagreementthelossesaresharedequally(lossesfollowprofits)Welooktohowprofitsaresharedandthatwilldeterminelosses.P.323s5.03aActivetransferofpartnershipinterestispermissibleoJusthavetomakeadeliveryandhaveacceptance,oWritingwillhelpbutisnotnecessaryIfyoutransferyourpartnershipinterest?oABtransfersC'sinteresttoD(Disnotapartnerbecauseallpartnersmustagree)oDwouldbeanassignee(notabadthingtobe)RighttoparticipateinManagementSituation:$60,$30,$10:hasapurchasedcontrol?p.320s4.01dEachpartnerhasequalrightsinbusinessandmanagementandconductofabusinesspartnership.oEveryonehasarighttobeconsultedSectionhAdecisionarisinginthemajorityofinterestinthepartnershipcontrolsoIftheycan'tagree,$60controls.oTheoneorcombinationofthosewhoholdmajorityinterest.p.322s4.04bCASE:Meinhardv.Salmonp.53(DutyofLoyalty)Property:intersectionon5thand42nd,HotelBristolGerryenteredintoaleasewithSalmon(1902)Salmonbroughtinajointventurer-Meinhard(forlimitedamountoftime).Gerrydidnotknowanythingaboutit.Gerrydied,andinterestwenttoElbridgeGerrywhoownedadditionalpropertiestangenttotheHotelBristol.Hedecidedthathewantedtogetsomeonetofurtherdevelopallofthepropertiestowardstheendofthelease(1922).SohelookstoSalmonandtheysignanotherleasefor80years.Profitswillbesplit.SalmondidnottellMeinhardaboutthenewdeal.Meinhardisupsetandsaysthatpartnersowedutiesandloyalty.TheCourtsareincensedthatSalmonwasthemanagingpartnerandhadadutytonotifyMeinhard.Especiallybecausethecaseflowedfromthefirstone.Page54paragraph2-oneofthemostfamous.Conveysthemeaningofthecourt:ajointventurerlikeapartnerowesadutytotheothertoputtheinterestofthepartnerabovehis/herown.Page57:p.322s4.04cPartnersarenotautomaticallyentitledtoasalary.PartnersareentitledtobereimbursedPartnersareentitledtolookatthebooksPartnerscansuethepartnershiporotherpartners(oftenwhenotherpartnersfeelliketheyarebeingcheated)o4.06boActionforAccounting:partneraskaTPtocomeinadecidewhatmoniesbelongtothepartnershipandindividualAgency,regardingTPandwhattheybelieveaboutauthority:oPartnerhaswhateveractualauthoritythatthecontractgiveshim.oCanhaveimpliedorexpressauthorityNotallstateslookatmajorityofinterest.Somelookatmajorityofmembers.CASE:Summersv.Dooleyp.38Summersthinksthatweneedtohighersomeoneasanemployee,DooleydisagreedsoSummershireshimanywayandpayshimoutofhisownpocketSummersthenwantsDooleytostartpayinghalfandhedoesn'twanttosoSummerssueshim.CourtsaysthatyouhavetohavemajorityofpartnersagreeanddecidesforDooley.CASE:Sanchezv.Saylorp.40■2partnersthatcan'tagree:dissolutionistheonlysolutionQUESTIONp.41■Dependsonwhatthestatuesays,majorityofinterestormajorityofpartners.NextClass:Moretimeonpartnership.Wewillgettonumber3andafewpagesintonumber4(read20pagesofthat)BLAW53302-6-07RevisedUniformPartnershipAct(p.41)?NotesfrompageoneaboutmajorityinterestormajorityofpartnersCASE:NorthmonInvestmentCompanyv.MilfordPlazaAssociatesp.44Someofthepartnershaveenteredintoaleasefor99yearsandotherpartnersobjectedLawsuitamongstpartnersDotheyhavearighttocomplainaboutit?Yestheydo.Theyhavetherighttoatleastbeconsultedandaninputandavote.Evenifthesepartnersobjectwerenotthemajorityininterestorpartnerstheystillhadtheabilitytoblockwhatwasdonebecausethepartnershipdoesnotlastthetimeofthelease.Theywouldinfactbeextendingtheirtimeaspartnerssotheyhadtherighttovetothevote.ApparentAuthorityInherentAuthorityDuderanch-partnerentersintoauthorityNoteknowledgeandnotice.p.313-1.023sIfyoutellanyonepartnersomething-aslongasheisinthebusinessofactingforthepartnerthenthepartnershipknows.Similartoagency.Knowledgegiventoonepartnermeansthatallpartnersknow.LiabilitiestothePartnersYouareliableforwhatotherpartnersdoUFAStates-UniformPartnershipActPA,OH,NYExample-ABCDmakeuppartnershipContractualLiability:partnershiphasenteredintoacontractoMustsueallbecausetheyhavejointliabilitySomestatesthathaveUPAhavestatutespermittingsuitagainstpartnershipalso-goingfortheirassetsTortLiability:partnershiphasinjuredsomeone?Cansueany,someorallmembersofthepartnershipoPartnershipisjointandseveralRUPA-RevisedUniformTXExample-ABCDmakeuppartnershipContractandtortoMustsuethepartnershipfirstandmustattempttocollectfor90daysoThenyoucansuetheindividualsoJointandseveralliability(cansueany,oneorall)oMustsueboth!Canbeconcurrent.■DownsideinPartnershipisthatyourpersonalassetsareatstaketoo.QUESTION:NewPartnerEntersHavepartnership,newmemberjoins(p.318s3.07)Theygetsuedonpre-existingeventIsnewpartnerliable?No!oHemaylosehisinvestmentinthepartnershipbuthewillnotbepersonallyliableunlesstheyenterintoanewobligationPartnerLeavesYouareresponsiblefordebtIfacreditoragreestoletapartnergowesaythatthereisaNovation(p.328s7.03)Asapartnerthatleavesyouaregoingtowanttonotifytheworldthatyouarenolongertheresothatyouarenotliable.CASE:DavisV.Loftusp.46Incomepartnersdonotshareinprofitsbuttheycontributeanamountofmoneythattheycantakewhentheyleave-althoughitisnotaugmentedbyadditionalfunds.Theydonotmakedecisionsaboutanything.Thecourtsaidthatwithregardtotheseindividuals-theywerenotpersonallyliablebecausetheyweremorelikeemployees.WhatIFoneoftheincomepartnersdidsomething,whowouldbeliable?Theentirepartnershipbecausetheywereanagent(apparentauthority)oRespondeatSuperior-themasterhastoanswer.DissolutionofPartnershiporanImbedofWithdrawalUPADissolutioniscausedwhenapartnerleaves(death,losealicense,justsaythatyouwanttogo,bankruptcy,chargedwithcrime)apartnerceasestobeorhavearelationshipwiththeotherpartners.PartnershipterminatesThismeansthattheyshouldstopdoingnewbusiness.oWindingupoldbusiness,fulfillcontractsandpayobligations.Notifyallcreditors.oDonotdonewbusinessunlessyouaredoingittoavoidfinancialcatastropheoTermination:sellassets,payofcreditors,notify,paypartners.Partnershipagreementcansaythatifpartnershipleaveshereiswhathappens.Buttechnically(eyeblink)itterminatesitreforms.CASE:GirardBankv.Haleyp.57ShewantedtoleaveandpartnershipsaidnoCourtsaidno-itisapartnershipatwillanddissolutionhasoccurred.RUPA-Dissolution?Eventsofwithdrawal:oPartnershipcontinuesopartnerisnolongerapartneroDissociation:jettisonoP.342s6.01-thelistofeventsWanttoleaveSomethingcausingthepartnerswithdrawalYoukickhimoutCourtkickshimoutDieYourexistenceterminatesoP.325s6.02LeavewrongfullyCanbeconsideredabreachofcontractandcanwithholdmoniesdueoP.325s7.01Ruleforpayingpeopleo仔K:deferralofpayment-unlesso7.03?EventsthatrequirewindingupoWindingupoTerminationoP.328s8.01-listDefinitetermMajorityofinterestscallitquitsifitispartnershipatwillo8.01gorc?Continuationofpartnership?P.327-8.02ApparentAuthorityoOneyearfromthedateyouleaveGeneralnoticeinpapersDirectnoticetocreditorsCASE:Creelv.Lillyp.58Maryland-RUPACreelstartedanoralpartnershipandhehadalotofinventoryonhandandcontributedit.Hediedandtheremainingpartnerstookinventoryandtoldwidowthattheyweregoingtostartanewpartnershipandtheyaddeduptheassets.ShewantedthemtofollowUFAandsellallassetsandgivehertheirshareCourtagreesthatitmaybewastefuloNewpartnershipisasuccessfulpartnersoWifeisentitledtobepaido仔FallsbetweenUPAandRUPA-courtsinterpretthelawJointVentures(p.64)Aretypicallytreatedasapartnership.Itisusuallyprojectspecificandwhentheprojectisoverthejointventureisover?CASE:Pagev.Pagep.65BusinessisinvolvedingarmentoruniformmaintenanceforthemilitaryandothersPartnershipconsistedofA&BTheneededacashinfusionfromcorporationandtheyowethecorp.$47koBowns100%ofcorpThispartnershiphadbeenintheredoNoagreementsoprofitsweresharedequallyAirForceBasewasestablishednextdoorBwantedtobringanactiontodissolvepartnershipandAopposesthatsayingthatheisdoingitinbadfaithbecauseyouaretheonlybuyer.AndIwillhavetopayyou(asownerofthecreditor)AsaysthatBwascontenttosharethelossesbutnowhedoesn'twanttoshareprofitsCourtsaysthattheyagreewithA.TheLawwillsayalwaysthatyouhaverightstodothingsbuttheymayalsosaythattheywillnotauthorizeitbecauseyouaredoingitforabadpurpose.p.68-readCASE:Drashnerv.Sorensonp.70Drashnerwoulddrinkalot,causeproblems,demandingmoneybeyondagreement.HeoncesaidWrongfullywithdrawal-partnersCourts:theyconcludethathiswithdrawalwaswrongfulandisnotentitledtoshareingoodwill.Andshareiszero.WhenpartnershipsbreakupYoupayoffallcreditorsfirst(includingpartners)Thenyougivethepartnerstheircapitalaccountsback.Ifthereisnotenoughmoneyleftthanthepartnersmustsharethedebtasdeterminedintheiragreement.CHAPTER3TheCorporateFormCharacteristicsoftheCorporationLegalentityRightsofdueprocess,freespeechAdvantages:LimitedLiabilityTransferownershiprightsManagementStructureinplaceCanlastforeverDisadvantagesStepstoformitTaxes(unlessitisanscorporation)Hardertomakedecisionsanddothingsquickly.HowdoyouArticlesofIncorporationwithSecretaryoftheState?Definespurposeandstructure(public)P.28s2.23?Establishbylaws(notpublic)?AdoptedbyBoardofDirectorsDeJure:doyoucomplywitheverythingDeFacto:youarecorporationandwewilltreatyouthatwaybutyoureallyhaven'tcompliedwitheverything.CorporationbyEstoppel:FactsHowdoyoubecomeaDeJurecorporation:Musthaveanincorporator:he/shefilesthearticlesofincorporationP.46s3.02defineswhatmustbeinthearticlesMusthavecorporationinyournamesothat3rdpartiesknowwhotheyaredealingwith2.06:youcanreservethatnamefor120daysbeforeyoustartdoingbusinessInitialdirectors:1directormandatoryinTXPurpose:maybespecificandleaveabackdoortoexpandCapitalstockstructureNameandaddressofcorporateagent(thiswillbethepersonsued)NameandaddressoftheincorporatorsAfteryoucomplywithallofthis(itcanbeelectronically)theSecretarymustapproveCallthefirstmeetingwiththeBoardofDirectors?StartdoingbusinessrightawayDelaware:Welldevelopedcourtsystemfordealingwithcourtmattersorbusinessmatters.ThecourtsappearfavorboardofdirectorsovershareholdersUnderDelawarelawitisveryhardtosueadirectoroEvenifyouaregrosslynegligentyoucannotbesuedP.79PreemptiveRightsoAcmeCorpo1,000sharesissuedandoutstandingA:600B:300C:100?Corporationdecidestoissuenewstockat1,000sharesD:E:F:A,B,andC?p.27s2.221AShareholdershavearighttoacquireadditionalsharesifitisincorporatedbefore101-2003unlessthearticlestakeitwayIfincorporatedafter10-1-2003youdonothavetherightsunlessgiventoyou.READALLOFTHIS:CommonStockVotingrightsNosetpricePreferredStockEntitledtoadefinitepaymentMaybecumulativeornotMayhaveabilitytovoteornotCanparticipateindividendsPaidfirstuponliquidationInitialDirectors:p.84States