Term
|
Definition
duty to cooperate
A principal must assist and cooperate with the agent in the performance of his duties and do nothing wrongful to prevent performance. |
|
|
Term
|
Definition
| other courts hold that while a principal may not interfere with an exclusive agent by appointing another agent to compete, the principal herself can compete with the agent. |
|
|
Term
|
Definition
| A principal is clearly not responsible for compensation to a subagent if there was no authority to hire the subagent. Nor is the principal liable for compensation to a subagent merely because the agent was authorized to hire subagents. The subagent must look to the agent for compensation. |
|
|
Term
|
Definition
| dale hires amber to decorate his home. dale authorized amber to hire subagents. Hired carpet people lay carpet and try to recover compensation for dale. Since the carpet people were performing the work of amber, they must look to her for compensation. |
|
|
Term
|
Definition
| The principal has the duty to indemnify the agent in accordance with the terms of the agency contract and for all expenditures or losses incurred by the agent in the discharge of his authorized duties. If the agent acted without authority, then his right to indemnification arises only if the principal benefited from the transaction. |
|
|
Term
| Duty to deal fairly and in good faith |
|
Definition
| A principal has the duty to deal with the agent fairly and in good faith, including a duty to provide the agent with the information about risks of physical harm or loss that the principal knows, or has reason to know, or should know are present in the agent's work but which are unknown to the agent. |
|
|
Term
| indemnification by principal |
|
Definition
| The agent is entitled to indemnification from the principal pursuant to the terms of the agency contract and for all expenditures or losses incurred in performing authorized duties on behalf of the principal. |
|
|
Term
| no right to indemnify for unauthorized or illegal acts |
|
Definition
| The agent is generally not entitled to indemnify for losses resulting from the acts that are unauthorized and do not benefit the principal. Additionally there is no right to indemnification if the agent acted illegally or negligently. |
|
|
Term
|
Definition
| If indemnification is otherwise proper, an authorized subagent can recover against the principal or agent, because the subagent is a fudiciary of both. If the subagent proceeds against the agent, the agent has a right to indemnity in turn against the principal. |
|
|
Term
| Lien against property of prinicpal |
|
Definition
| absent an agreement to the contrary, the agent has a right to a lien on the principal's property in his lawful possession up to the amount of his compensation (or right to indemnity). |
|
|
Term
|
Definition
| The subagent has a lien against the agent's property inher possession for services and expenses and against the principal's property in her possession to the extent of the agent's rights in such property. |
|
|
Term
|
Definition
| in addition to the above rights, an agent may be entitled to withhold further performance under the agency contract, to claim a set off or counterclaim in any action brought by the principal, or to demand an accounting by the principal. |
|
|
Term
|
Definition
| express ad implied contractual duties, reasonable care in performance, obedience, notification, loyalty, segregation and accounting of property, and confidentiality |
|
|
Term
|
Definition
| express and implied contractual duties, cooperation, compensation, indemnification, aviodance of negligence, and to deal fairly and in good faith. |
|
|
Term
|
Definition
| marriage is a personal relation arising out of a civil contract between a man and a woman to which the consent of the parties capable of making that contract is necessary. |
|
|
Term
|
Definition
| the renewal of his group term life insurance policy is not property when the insured has no enforceable right to renew. If he would of become unisurable, it could of had community value, if he would of had the right to continue his policy. |
|
|
Term
| seperate ownership/property and exceptions |
|
Definition
| the property was acquired by gift (exception:gift traceable to labor can be community property and another exception is classification rules can be altered by agreement between the spouses). |
|
|
Term
scope of employment
relevant factors |
|
Definition
| whether the act was authorized by the employer, the time, place and purpose of the act, whether the act was one commonly performed by employees on behalf of their employers, the extent to which employer's interests were advanced by act, whether the employer furnished the means (truck) by which the injury was inflcited, whether the employer had reason to know that the employee would do the act in question, whether the act involved the commission of a serious crime. |
|
|
Term
|
Definition
| gratuitous acts are treated the same as other acts within scope if it advances employer's interests. |
|
|
Term
| exception-fraud or duress |
|
Definition
| an agent who assists his prinicpal in the commission of fraud or duress is not liable to the injured party if the agent had no knowledge of fraud or duress. The knowledge of the fraudulent prinicpal is not imputed to the agent. |
|
|
Term
|
Definition
| an invalid marriage wherin one or both acted in good faith. If both the parties at least go through marriage ceremony, good faith is presumed. |
|
|
Term
| effectof one party's lack of good faith |
|
Definition
| a spouse aware of the invalidity of the marriage probably could not invoke the rules applicable to putative marriage, although the other spouse in good faith would be able to do so. |
|
|
Term
| the courts look for a sunjective belief and a? |
|
Definition
| objectively reasonable belief for a marriage. |
|
|
Term
| putative surviving spouse |
|
Definition
| get's worker's compensation and pension and retirment benefits (as long as no lawful spouse claims it). |
|
|
Term
| no common law marriage in california |
|
Definition
| unlike sevral states, california does not recognize non ceremonial common lain california. It must be objectively reasonable. |
|
|
Term
|
Definition
| an employer or other principal is subject to tort liability for any loss sustained by 3rd persons as a result of misrepresentations made by an employee or other agent whenever the making of representations was actaully expressed or impliedly or apparently authorized. |
|
|
Term
|
Definition
| akways remember to check to see whether you can hold the principal directly liable for the tort. Ask yourself if the principal did something or failed to do something that makes her directly responsible for the agent's tort. |
|
|
Term
|
Definition
| a principal is liable for the torious act of her agent if the prinicpal was negligent in hiring, training, or supervising the agent, the principal was charged with care of the person injured by the agent's act, or the principal fails to exercise due care in handling a fact or condition of which the agent has knowledge and which knowledge is imputed to the principal. |
|
|
Term
| non-respondeat superior liability of principal for agent tort's |
|
Definition
| authorization-a principal isliable for the tortious act of her agent if she authorized or directed the agent to perform the act. |
|
|
Term
|
Definition
| if a man and woman in california meet the requirments of common law marriage and no marriage ceremony was attempted. 1st look to see where the common law marriage occured. If it occured in a jurisdiction where common law marriage is lawful, then the marriage is valid in cal. if not it is not even considered to be a putative marriage in cal. due to the objective reasonableness requirement. |
|
|
Term
| park north general hospital v. hickman |
|
Definition
| plaintiff sued hospital for negligently hiring doctor. Since hopsitals have a duty to appoint doctors with care for patients well beong the hospital can be held directly liable |
|
|
Term
| aluminum co. of america v. ward |
|
Definition
| The rule for borrowed servants is total control in which in this situation the general employer still had partial, so liabitlity sticks with general employer. |
|
|
Term
| exception-employee immune from liability |
|
Definition
| indemnity is denied if the employee was immune from liability in the first place. |
|
|
Term
| employer's right to indemnification |
|
Definition
| if the employer is held liable for an employee's torts, the employer can hold the employee in turn, the employer has a right to indemnification against the employee for any damages the employer must pay to a 3rd person because of the employee's wrongful acts. |
|
|
Term
|
Definition
| moreover, if the employee is exonerated or released from the liability, this generally operates to release the employer from vicarious liability as well. |
|
|
Term
|
Definition
| however, the victim is entitled to only one recovery against eiher party will bar recovery against the other. |
|
|
Term
|
Definition
| because this liability is imposed for the protection of 3rd perosns, the employer cannot contract with her employee to insulate herslef from liability. |
|
|
Term
|
Definition
| such liability is join and several with that of the employee for his won acts:the employer can be sued alone, or she can be sued togther with the negligent employee. |
|
|
Term
|
Definition
| the primary characteristic of an independent contractor is that the employer has no right to control how the work is to be performed. |
|
|
Term
|
Definition
| a minor may make a valid pre marital agreement or other marital property agreement if the minor is emnacipated or is otherwise capable of contracting marriage. |
|
|
Term
| statute innaplicable to mixing situations |
|
Definition
| no writing is required where ownership changes due to a mixing of community and seperate funds. (852). |
|
|
Term
|
Definition
| had home in joint tenancy-husband dies-his will says the house was in community property and his half should go to his kids- the rule is you cant have any hidden intentions and the property remains in joint tenancy. |
|
|
Term
|
Definition
| prior to 1975-w and h have a home-in both their names. half is wifes, and half of husbands half is wife's also. Wife gets to keep her seperate property. |
|
|
Term
|
Definition
| where there is no proof as the time of acquisition of an asset, a few cases have held that proof that either spouse possessed the asset during marriage will give rise to the general pro-community presumption. |
|
|
Term
|
Definition
| wife complained house was bought with community funds-house was purchased during marriage- there was a presumption of community property- and husband failed to meet the burden of proof because he could not trace- the court found the house to be community property. |
|
|
Term
|
Definition
| at least one spouse believed in good faith that the marriage was valid, but in fact it was void or voidable, due to an impediment (the belief also must have been objectively reasonable). |
|
|
Term
|
Definition
| quasi marital property would apply here where acquisitions divided as it were community property. Has legal status of spouse and can sue for wrongful death of spouse unless there is a lawful spouse. Has right to recieve alomony as long as the partner acted in good faith. |
|
|
Term
|
Definition
| quantum meruit is probably unavailable for household services rendered with expectation of monetary reward if supplying sex was an inseperable part of the arrangement. |
|
|
Term
|
Definition
| a non-marital partner may recover in quantum meruit for the reasonable value of household services rendered (less the reasonable value of support recieved) if it can be shown that he or she rendered services with the expectation of a monetary reward. |
|
|
Term
| legal status of cohabitant |
|
Definition
| legal strangers (cannot sue for male's wrongful death, not entitled to female's unemployment compensation), and cannot collect for tort damages. |
|
|
Term
| result if parties agree to simply share ownership |
|
Definition
| under marvin decision- a general sharing agreement can be implied from the conduct of male and female and would be classified as tenancy in common. |
|
|
Term
| public policy limitations |
|
Definition
| a contract between the parties will be unenforceable if the sexual acts form an inseperable part of the consideration for the agreement. In an express marvin contract, the parties may agree to mutually support eachother financialy so long as both live together- no alimony |
|
|
Term
|
Definition
cohabitants agreed(expressly) or impliedly to share ownership of the acquisition of each during their relationship. If law did no create co-ownership at the moment of acquisition by labor of assets, a court will divide them 50-50.
No legal status and cant sue for wrongful death, no alimony, unless the agreement expressly creates this right. |
|
|
Term
| result if there is no proof of agreement |
|
Definition
| absent proof of an express or implied sharing agreement, each cohabitant own seperately his or her acquisition. |
|
|
Term
Marvin relationship(not putative)
agreement by cohabitants to share acquisitions |
|
Definition
| where two persons live together in sexual intimacy and have an express or implied contract to share ownership of the acquisition of each during the relationship- their cohabitation can be called a marvin relationship. Cohabitation is essential to marvin based claims, but it need not be full time. |
|
|
Term
| if husband dies testate (cohabitated with both wife and putative wife) there is 4 possible solutions: |
|
Definition
1. 50% to w-1, 50% to w-2, and none to legatees
2. 25% to w-1, 25% to w-2, and 50% to legatees
3. 1/3 to w-1, 1/3 to w-2, and 1/3 to legatees
4. 3/8's to w-1, 3/8's to w-2, and 1/4 to legatees
|
|
|
Term
|
Definition
| the earning of wife 1 and husband are community property. W-2 has no authority to claim 1/2 Husband from W-1. |
|
|
Term
|
Definition
| husband's earnings are both community property and quasi marital property at same time (w-1 and w-2 each recieve one half). |
|
|
Term
|
Definition
| the earnings of w-2 are her seperate property-quasi marital statute does not cover two wife situations where husband is cohabitating with both. If he were to recieve half, w-1 has a logical claim to 1/2 of this half, since acquisition occurred during lawful marriage while spouses cohabitated and was not by gift, will or inheritance. |
|
|
Term
| living apart doctrine usually determines result |
|
Definition
| in most bigamous marriages, the twice married person, say husband, will have seperated from w-1, before marrying w-2. Under the living seperate and apart doctrine w-1 has no claims to husbands post-seperation acquisitions by labor, although on his death she can claim as heir part of his seperate property. And w-2 can have no claims on pre-second marriage acqusitions. |
|
|
Term
|
Definition
| when analyzing the property rights of participants in a putative marriage, you should 1st determine whether either participant is still legally married to another person. Property acquired during a putative marriage may be divided differently if one spouse is still married. |
|
|
Term
|
Definition
| if a putative marriage is invalid, because it is bigamous, there may be a lawful spouse of one or both of the parties, who can also by claim to acqusitions of the bigamist spouse. |
|
|
Term
| the term widow or surviving spouse in death includes: |
|
Definition
|
|
Term
family code 770
seperate property of married person |
|
Definition
seperate property of a married person inlcudes 1. all property owned by the person before marriage 2. all property acquired by the person after marriage by gift, bequest, device or descent. 3. the rents, issues, and profits of the property described in this section.
4. a married person may with out the consent of the person's spouse convey the persons seperate property. |
|
|
Term
sec 220. def. of a servant in determining whether one acting for another is a servant or an independent contractor:
|
|
Definition
| 1.the extent of control over the details of the work 2. whether the one employed has a distinct business 3. the work is supervised 4. skill required 5. who supplies the instruments 6. length of time employed 7. method of payment 8. whether the work is part of the regular business of the employer 9. if parties believe they created a master/servant relationship 10. whether the principal is or is not im business. |
|
|
Term
| the first step in applying the doctrine is to: |
|
Definition
| determine whether the agent is an employee as opposed to an independent contractor. The key is control, does the employer retain control over the manner in which the agent performs? If so, the agent is an employee, if not, he is an independent contractor. |
|
|
Term
|
Definition
| 852- a transmutation of real or personal property is not valid unless made in writing by an express declaration that is made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected. Rolls royce went to son, and property went to evelyn as her seperate property. 1. a writing that satisfies the statute of frauds and an expression of intent to transfer a property interest. |
|
|
Term
| exception to pro-community presumption |
|
Definition
| 802. provides where a person dies more than 4 years after divorce, the presumption that property acquired during marriage is community property (of the former marriage) does not apply to the assets in the person's estate. |
|
|
Term
| termination of putative marriage by death of a spouse |
|
Definition
| the surviving putative spouse has the same right as a lawful spouse to elect against the decedent's will in order to cliam half of what would have been community property had there been a lawful marriage. surviving spouse also has full intestate rights to mate's death. |
|
|
Term
| remedies at annulment of putative marriage |
|
Definition
| some older cases have allowed a good faith spouse to assert quasi-contractual claims against the other party for the value of services rendered in excess of consideration recieved. |
|
|
Term
| effect of knowledge of the impediment |
|
Definition
| one case has said that good faith or putative status ends the moment she learns of the impediment to the marriage. |
|
|
Term
|
Definition
| within scope if act advances employer's interest |
|
|
Term
|
Definition
| the recipient must have had a good faith belief in the marriage to get alimony. |
|
|
Term
| marriage of mctiernan and dubrow |
|
Definition
definition of goodwill- property of an intangible nature, expectation of continued or futured patronage.
Unique skill- lawyers are a dime a dozen. An inventor or artist is unique for example. We can contest goodwill if the service is unique. |
|
|
Term
|
Definition
| husband went to law school, wife wants reimbursement for the community. 2641- has to enhance the earning capacity. |
|
|
Term
| employee going to and from work |
|
Definition
| an employee's actions of going to and from work or meals is ordinarily considered outside the scope. |
|
|
Term
| exception- special errand rule |
|
Definition
| however, when the employee's going to or from work also involves some service for employer is with in scope |
|
|
Term
| exception- traveling salespeople |
|
Definition
| likewise, a traveling salesperson compelled by work for long perods of time is within the scope the entire time he is away, even while not actually at work, as when he is returning home. |
|
|
Term
| substantial departure required |
|
Definition
| again, the ceses turn on the degrees to which the employee was serving his own interests. Only a substantial deviation or departure from the employer's business will take the employee outside the scope. If the main purpose of the activity is still the employer's business it does not cease to be with in the scope merely because of incidental personal acts, slight delays, or deflection from the direct route. |
|
|
Term
|
Definition
| in many cases, the employee may be acting partly for his own interests and partly for his employer. If any substantial part of the act was done for purposes of the employer, that is generally sufficient to impose liability on employer. |
|
|
Term
|
Definition
| eli instructs sally to delver goods in town and sally decides to go to the bank on way to perform both tasks, sally injures person, eli is liable. |
|
|
Term
|
Definition
| a principal is liable for the tortious act of her agent if 1. at the time of the act, the agent purported to act on the principal's behalf 2. the principal accepts the benefits of the act knowing all relevant factors. |
|
|
Term
|
Definition
| within the scope if any substantial part of the act was done for purposes of the employer. |
|
|
Term
| acts that depart from the employer's business |
|
Definition
| with in scope if departure is minor. |
|
|
Term
|
Definition
| within scope if employee was on a special errand for amployer or employee is on a business trip. |
|
|
Term
| use of unauthorized instrumentalities |
|
Definition
| within scope unless instrumentality is substantially different from that authorized. |
|
|
Term
| use of employer's instrumentalities |
|
Definition
| within scope if use is for purposes of advancing employee's interests. |
|
|
Term
|
Definition
| within scope if act is incidental to employee's performance of assigned work or employer exercises control over personal act, even if off work premises and times. |
|
|
Term
|
Definition
| treated the same as affirmative acts- within scope if it advances employer's interests. |
|
|
Term
|
Definition
| within scope if act is related to carrying on employe's business. |
|
|
Term
|
Definition
| when the pro-wife presumption arises but evidence of community ownership is received, the special presumption converts to a rule placing the burden of proof on the pary seeking a community characterization. |
|
|
Term
|
Definition
| he was acting on ships business with mixed motives-the meaning of actions and intentions is the test- he thought he was furthering the ship's business when he called hands to deck as he was authorized to do so. Because he was yelling to turn to-this was evidence of his intentions. |
|
|
Term
|
Definition
| Mrs. cox telephone installer. The employer instructed cox not to employ a assistant with out express authority and therefore she was not in scope. In contracts employer can delegate scope but not torts. |
|
|
Term
|
Definition
| flipping knife- intentions are all about self gratification and greed. court found even employees can take pauses or breaks and exhibit objects, its in the nature of people, and people should be expected to flip and fiddle with things which employer's should forsee. |
|
|
Term
|
Definition
| chevron found to have an employee employer relationship. Duck test- sub agent must have authority, necessity, and emergency to which they had that here. Chevron had a sign out front- apparent authority- it created the appearance that chevron was employer therefore must by vicariously liable. |
|
|
Term
|
Definition
| when control is split is meaningless- reliability must be on the employer that can best bear the risk. But regardless both special employer and general were found liable due to control. |
|
|
Term
| 850-transmutation by agreement or transfer |
|
Definition
| subject to sections 851 and 853- inclusive married persons may by agreement or transfer with or without consideration any of these: transmute community to seperate, transmute seperate to community, transmute seperate from one to the other. |
|
|
Term
| advantages of non-contractual remedies |
|
Definition
| in seeking quantum meruit, the non-marital partner claims as credito rather than as a co owner and can reach seperate property. Could also might be able to get constructive trusts. |
|
|
Term
|
Definition
| husband uses community proerty to make a mortgage payment on land in his name, all prior payments having been made with husbands seperate funds. The community buys in to title to the property despite no express writing. |
|
|
Term
|
Definition
| 852- a transmutation of real or personal property is not valid unless in writing by an express declaration and is not a gift of substantial value. |
|
|
Term
|
Definition
| dale is to drive mary into town with truck, he takes car instead, dale is still liable because there is no greater risk of harm. |
|
|
Term
| distinguish permissive use statutes as to vehicles |
|
Definition
| some jurisdictions have permissive use statutes that impose liability on the owner of a vehicle for any damages negligently aflicted by a person driving it with owner's permission (owner's express or implied consent) if consent doesnt need to be within scope. |
|
|
Term
| presumption wife is not the only transferee |
|
Definition
| if the pre-1975 written instrument names wife and one or more other transferees as owners, section 803 presumes that wifes interest in the contenacy is her seperate property. |
|
|
Term
| definitions: premarital agreement and property |
|
Definition
| premarital agreement means an agreement between prospective spouses made in contemplation of marriage and to be effective upon marriage. Property means an interest present or future, legal or equitable, vested or contigent, in real or personal property, including income and earnings. |
|
|
Term
|
Definition
| two prong test- the objective test- what have you shown to the world you want a divorce. |
|
|
Term
security bank v. cooper
elk lodge members-non profit |
|
Definition
| they signed the bylaws and therefore were active members |
|
|
Term
| implied authority-"incidental representations" |
|
Definition
| when the principal authorizes another to deal on her behalf in transactions where representations about subject matter are customarily made, she is deemed to have impliedly authorized all such representations unless that authority was specifically with held. |
|
|
Term
|
Definition
| principal wil be liable if agent had authority to make statements and made false ones. |
|
|
Term
| lawful wife may benefit financially |
|
Definition
| the half of the female's earnings that would go to husband under any sharing contract between husband and female will be community property of husband and wife. If he has not sperated from her during the living arrangment of wife and female. If female earns more than husband, wife might thereby benefit monetarily from the marvin sharing contract. |
|
|
Term
|
Definition
| eli sends dale to deliver a package to tom. dale stops at gas station and pucnhes someone. The act was not related to job, eli not liable. |
|
|
Term
|
Definition
| eli hires randy to repossess a car. Randy punches owner to get car. Owner can sue eli because randy was in nature and furthering interest of eli. eli is liable. |
|
|
Term
|
Definition
| again, the factual issue is whether the intentional act is related to carrying forth the employer's business. Was there personal reasons or was there employer's business. |
|
|
Term
| inentional torts by employee |
|
Definition
| liability under respondeat superior extends intentional acts by the employee only if the acts occur with in the scope of employment. |
|
|
Term
| distinguish representations |
|
Definition
| authorization is of crucial importance when liability for the representations of another are concerned. |
|
|
Term
| violations affecting authorization |
|
Definition
| however, when the employee in violating the employer's instructions goes beyond the duties for which he is hired, his act may be outside the scope of his employment, and the employer is relieved of liability for the tortious consequences. |
|
|
Term
|
Definition
| on the same theory, even acts that are specifically forbidden by the employer may be within scope, an employer cannot avoid responsibiltity for an employee's negligence by telling the employee to act carefully, or to never commit a tort. |
|
|
Term
|
Definition
| 803- husband bus driver, wife realtor:all property acquired by a married woman before 1975-even though property was bought with community funds is wife's seperate property. |
|
|
Term
|
Definition
| 2640-in 1984 was enacted and after 1985 you can retain your seperate property in contributions. |
|
|
Term
| respondeat superior is a rule of civil liability-the doctrine does not apply in criminal law |
|
Definition
| the employer cannot be held criminally liable for employees act unless she somehow participated in the act. |
|
|
Term
| employee's use of employer's vehicle, equipment etc. |
|
Definition
| the employer is liable only when the instrumnetality is being used for the purpose of advancing the employer's business interests, rather than the employee's personal affairs. (must be within scope). |
|
|
Term
| direct liability v. vicarious liability |
|
Definition
duty-breach-damage is direct liability
employee employer relationship is all you need for vicarious liability. |
|
|
Term
|
Definition
| the ca. supreme court has unequivocally held that the burden of proving seperate ownership canbe met by a mere preponderance of evidence. Nevertheless, some court of appeals cases incorrectly say that only a clear and convincing evidence will meet the burden. |
|
|
Term
|
Definition
| while the employer-employe relation is usually created by an express agremment, whether oral or written, it may also be implied from the circumstances or conduct of the parties. |
|
|
Term
|
Definition
| if a 3rd peron hurts an employee, the employer could sue for recovery for loss of work. |
|
|
Term
| employment by estoppel (apparent or ostensible employment) |
|
Definition
| If a person inentionally or negligently creates appearance that another is in her employ, and a 3rd perosn is hurt, the employer would be liable. |
|
|
Term
| statutory benefits for registered domestic partners |
|
Definition
| surviving partner recieves the same share as would a lawful surviving spouse would. |
|
|
Term
|
Definition
| time,energy and skill is a community property-she gets 1/2 ranch. |
|
|
Term
special presumptions
transfers to married women |
|
Definition
| In addition to the general pro-community presumption, there is a special presumption favoring seperate property classification for transfers to married women in writing prior to 1975. (803). |
|
|
Term
|
Definition
| the mere fact that one party has not requested the other to render services does not prevent an employer employee relationship, from arising if the employer knows that services are being rendered and accepts the benefits. |
|
|
Term
|
Definition
| generally, any person having the capacity to contract may employ an agent or employee. Thus minors, and incompetents, lacking contractual capacity cannot appoint employees and cannot be held vicariously liable. |
|
|
Term
| authorization by emploer not required |
|
Definition
| it is not necessary to show that the employer authorized or permitted the particular act that caused the injury if the act occurred in the scope of the employee's regular duties and employment. |
|
|
Term
|
Definition
| an employer may be liable for injuries caused by an employee's personal acts (smoking) if the act is incidental to the employee's performance of assigned work. Moreover, even a personal act performed off the employer's premises and while the employee is not engaged in work will be considered to be within the scope of employment if the employer exercises control over the employers perosnal acts. |
|
|
Term
| eli gives sandy a bike to go to work, sandy rides her bike to park on weekend and injures someone. |
|
Definition
|
|
Term
| allocation of burden of proof when general presumption does not arise |
|
Definition
| if no general presumption arises, the burden of proof would be governed by the normal rules of evidence. |
|
|
Term
|
Definition
| earnings and accumulations during period of seperation are seperate property |
|
|
Term
|
Definition
| normally, a general employer who lends or leases her equipment with an operator to a special employer is presumed to retain right to control over operator. hence would be liable, unless the operator must take orders from the special employer. |
|
|
Term
|
Definition
| whoever has the right to control is liable |
|
|
Term
| emergency authority to hire |
|
Definition
| even an ordinary employee may have authority to hire and employ a subservant in an emergency. And employer is liable. |
|
|
Term
| distinguish employer negligent in hiring physician |
|
Definition
| the employer may be liable if it appears the employer was negligent in hiring the physician. This is not an application of respondeat superior but rather is a case direct liability. |
|
|
Term
| an employer is generally notliable for the torts of a physician |
|
Definition
| because too skilled of a profession to be able to control duties. |
|
|
Term
|
Definition
| the employer employee relation requires that the employer have the right to control employee's services and means of doing work. Thus, if the employer is merely bargaining for a result and retians no such control it is independent contractor. |
|
|
Term
|
Definition
| if the agent was not authorized to emply another, there is no relationship between the employer and the subagent hired, no liability |
|
|
Term
| void marriage, effect on agreement |
|
Definition
| if a marriage is determined to be void, an agreement that would otherwise have been a premarital agreement is enforceable only to the extent necessary to avoid an inequitable result. |
|
|
Term
|
Definition
| however, no special capacity is required to be an employee, therefore an amployer can be held vicariously liable for torts of minors. |
|
|
Term
| doctrine of respondeat superior |
|
Definition
| under the respondeat superior an employer will be liable for all torts committed by her employee within scope of employment. |
|
|
Term
|
Definition
| a specific type of principal one who employs agents to perform services in her affairs and who has the right to control the physical conduct in performing services. |
|
|
Term
|
Definition
| a specific type of agent that is employed to render services of any type other than the pursuit of an independent calling and who remains under control of the employer in perfoming such services. |
|
|
Term
|
Definition
| pre-marital agreement cannot promote divorce-against public policy. |
|
|
Term
| def. of community property |
|
Definition
| except as provided in statutes, defining seperate property, all property real and personal, wherever situated, acquired by a married person during marriage while domiciled in this state is community property. |
|
|
Term
| possession plus long marriage |
|
Definition
| finally, another case has held that the general presumption can apply (despite failure to show acquisition during marriage) if the evidence shows possession of the property by either spouse at the end of a long marriage. |
|
|
Term
| change in form may meet the during marriage test |
|
Definition
| note, that even under the during marriage test, a change in the form of the asset supplies a new acquisition date that should raise the procommunity presumption. |
|
|
Term
| rides to unauthorized passengers |
|
Definition
| generally not within scop unless employer authorized invitation to passenger. |
|
|
Term
| specifically forbidden acts |
|
Definition
| within scope if employee is acting within scope of duties for which he was hired. |
|
|
Term
|
Definition
| community presumption only should arise if acqusition during marriage can be shown. |
|
|
Term
| effect of contrary evidence on general presumption |
|
Definition
| if evidence is there presumption is wiped out. |
|
|
Term
|
Definition
| the partnership generally cannot recover against third parties for negligent injuries to one of the partners. |
|
|
Term
| effect of husband wife agreement on thrid parties |
|
Definition
| all transmutations that are valid between the spouses are also binding on 3rd parties who become creditors after the transmutation occurs. |
|
|
Term
|
Definition
| employee employer relationship + act within scope |
|
|
Term
|
Definition
| lady sueing newspaper- there was no necessty, emergency or authority and the court concluded bruce was not an employee of paper and therefore not liable for him. |
|
|
Term
|
Definition
| e tells m to use bus. M drives car and hits someone; is substantially different. e is not liable. E would of been liable of he had not told m what to drive. |
|
|
Term
| summary of 4 approaches to treatment of quasi marital property before annulment |
|
Definition
1. treat property the same as community property unless one spouse acted in bad faith then her acquisitions are treated as community and the other spouse in good faith treated as seperate peoperty.
2. treat property as a tenacy in common
3. treat property acquired through the spouse's business as partnership property and treat the rest of the property as seperate property.
4. treat property as seperate property until annulment, unless title is taken in joint tenancy. |
|
|
Term
| conduct of a servant is within the scope of employment, if and only if: |
|
Definition
a. it is of the kind he is employed to perform.
b. it occurs substantially within the authorized time, space and limits
c. it is actuated, at least in part, by a purpose to serve a master
d. if force is intentionally used by the servant against another, the use if force is not unexpectable by the master. |
|
|
Term
|
Definition
| if the facts of a question show acquisition during marriage, you should state that this raises the pro-community presumption. If the facts do not show the itme of acquisition, note that the during marriage test is most often the law. |
|
|
Term
|
Definition
| one of the most likely ways in which your professor will test scope of employment is to have an employee deviate from the employer's business and undertake personal business. While undertaking the personal business, the employee will commit a tort. Be sure to discuss whether there was a substantial deviation (frolic) or a minor (detor) from the employee's business. The greatwe, the more likely it will be considered outside of scope and e not liable. |
|
|
Term
| distinguish independent contractor |
|
Definition
| an independent contractor, like an employee is hired for physical services and not in a representative capacity. However, the independent contractor contracts with the employer only as to the specific results to be accomplished, not as to the means by which the work is to be performed. Ind. contractor renders services in the cause or an independent occupation or calling. |
|
|
Term
|
Definition
| the principal can be held liable for negligently hiring, training, or supervising the agent, appoints a contractor to do a non-delegable act, or a highly dangerous activity, or the principal will be liable for misrepresentations the agent makes authorized by the principal. |
|
|
Term
|
Definition
| if the special employer directs the employee to perform a specific act, he will be liable as well. |
|
|
Term
|
Definition
| presumption of community property only should arise after evidence that posession during the marriage has been found. |
|
|
Term
|
Definition
| whoever had the right to control is liable |
|
|
Term
| factors to consider in determining who has the right to control |
|
Definition
| 1.the extent of control either employer exercises over the employee's work 2. does the employee provide a unique service 3. who has primarily control over the employee's work 4. is there a stated duration for the employment 5. whether paid salary or a certain sum for a particular task 6. whether the equipment is supplied by the general or special employer. |
|
|
Term
|
Definition
| the agreement and the writings executed was not done under duress, fraud, or undue influence, and the parties did not lack capacity to enter into the agreement. |
|
|
Term
|
Definition
| anesthesiologist and doctor being prosecuted. captian of the ship doctrine-the physician in charge has right to control over all when operating. |
|
|
Term
| overcoming pro-wife special presumption |
|
Definition
| if community funds were used it could be overcome. |
|
|
Term
| acquisition while living seperate and apart |
|
Definition
| id facts show acquisition before divorce but after seperation and cannot trace, is probably community property but not definite. |
|
|
Term
| result if parties agree to live in community |
|
Definition
| if male and female want things to be community like a marriage, the contract is not necessarily void. If male uses credit charges like he is her husband, the husband could be estopped to creditors that earnings are tenancy in common so that male's creditors can reach all such earnings. |
|
|
Term
|
Definition
| where husband is named transferee along with wife and the instrument describes them as husband and wife but does not specify the form of ownership-it is community property under 803. |
|
|
Term
| community property with right of survivorship |
|
Definition
| a document of transfer can expressly annex a right of survivorship to community property. This right is severable in the same manner as a joint tenancy. Community property with right of survivorship is subject to the management and creditor's rights rules of community property, not those applicable to joint tenancy which is a form of seperate property. |
|
|
Term
|
Definition
| may not waive right to recieve alimony unless represented by independent counsel when the agreement was signed, and not done under duress and must be conscionable. |
|
|
Term
| effect of wife's signature |
|
Definition
| post 1984, not enough, pre-1984 was enough to be conisidered a transmutation. |
|
|
Term
|
Definition
| title in a wife's name raised a presumption of seperate ownership by her. |
|
|
Term
| situations in which transmutation may be inferred or presumed. traditional gifts |
|
Definition
| if one spouse gives the other a present on a holiday, wrapped under pre 1985 law could be considered a transmutation. But the nature of the funds used to purchase the asset would control classification of the property. |
|
|
Term
|
Definition
| was agent authorized to make representations, if instructed (express authority) or representations are customarily made (implied). If neither can still be liable if principal placed the agent in a postion to decieve. |
|
|
Term
|
Definition
| not effective because a will does not have legal effect until the testator dies. |
|
|
Term
| possession plus long marriage test |
|
Definition
| another case has held that the general presumption can apply,despite failure to show acquisition during marriage, if the evidence shows possession of the property by either spouse at the end of a long marriage. |
|
|
Term
|
Definition
| normally, a general employer who lends or leases her equipment with an operator to a special employer is presumed to retain the right to control the operator. Unless the operator takes orders from the special emplyer. |
|
|
Term
|
Definition
| while the employer employee relationship is usually created by an express agreement (whether oral or written) it may also be implied from the circumstances or conduct of the parties. |
|
|
Term
| possible unlimited presumption |
|
Definition
| pro-community ownership attaches without any proof |
|
|
Term
| conduct of a servant is in scope if: |
|
Definition
| 1. it is of the kind he is employed to perform. 2. it occurs substantially in the authorized time, space and limits. 3. it is actuated, at least in part, by a purpose to serve the master 4. if force is intentionally used by the servant against another, the use of force is not unexpectable by the master. |
|
|
Term
| effect of husband and wife agreement on third parties |
|
Definition
| all transmutations that are valid between the spouses are also binding on 3rd parties who become creditors after the transmutation occurs. |
|
|
Term
| requirements for general pro-community presumption |
|
Definition
| the proof that must be presented by the party seeking to rely on the pro community presumption is unclear. |
|
|
Term
| pro-community presumption |
|
Definition
| proof that the asset was acquired during marriage |
|
|
Term
|
Definition
| a representative relationship is one that enables a person to acquire rights and duties by consensual transactions on behalf of somebody else. |
|
|
Term
|
Definition
| domestic partners do not have putative spouse rights/recognition. |
|
|
Term
|
Definition
punitive damages should punish wrong doing-we shouldnt punish an employer for being an employer.
-complicity rule-a. the principal authorized the doing b. agent was unfit and principal was reckless in hiring him c. the agent was employed in a managerial capacity and was in scope d. the principal or the managerial agent ratified or approved the act. |
|
|
Term
|
Definition
| this is the power that the principal manifests to third parties that the agent has. A principal will be bound by an agent's acts if a third party reasonable believes, based on the principal's manifestations to the third party, that the agent had authority. |
|
|
Term
|
Definition
| arises when the principal intentionally or carelessly causes a third party to believe another to be his agent, and the third party detrimentally relies on the belief. whereas apparent authority contractually binds the principal, estoppel merely makes the principal liable for the third party's resulting losses. |
|
|
Term
| even if an agent's authority has terminated, any apparent authority: |
|
Definition
| continues until third parties are notified of termination. |
|
|
Term
| actual authority ends when: |
|
Definition
| agnecy temr expires, agency accomplishes purpose, change of circumstances, by death or incapacity upon notice, by agreement of the parties, or of a suspension of powers. |
|
|
Term
| exception to pro-community presumption |
|
Definition
| 802, provides where a person dies more than 4 years after divorce, the presumption that property acquired during marriage is community property (of the former marriage) does not apply to the assets in the person's estate. |
|
|
Term
|
Definition
| when there is a pro wife presumption- burden of proof lies on person trying to say it was community. |
|
|
Term
|
Definition
| remember that community property law will not apply even though male and female agree to share community. Such acquisitions will likely be held in tenancy in common, unless the couple is estopped from denying community status to creditors who would benefit from such a status. |
|
|
Term
|
Definition
| was not fully advised of financial status and obligations of the other party, did not waive such lack of disclosure in writing, could not reasonably have obtained the info. on her own. |
|
|
Term
|
Definition
| when analyzing the validity of an antenuptial agreement, watch out for a party who is not represented by counsel. If so the agreement will be held involuntary unless certain requirments are met. In addition all waivors of alimony will be invalid if not represented by counsel when the agreement was signed. |
|
|
Term
|
Definition
| the antenuptial agreement will be involuntary if not represented by counsel at the signing, unless that party was advised to consult an attorney and expressly waived that right in a seperate document having had 7 days to examine document and seek counsel. Also, was fully informed of the basic effect of agreement and rights he was giving up and signed a statement stating this. |
|
|
Term
| exceptions- no writing required |
|
Definition
| 852- a gift between the spouses of clothing, wearing apparel, jewelry, or other tangible articles of a personal mature, used soley and principally by the spouse to whome the gift was mad and not substantial in value of marriage. |
|
|
Term
| employee's use of unauthorized instrumentalities |
|
Definition
| a more difficult problem arises when the employee uses some vehicle, equipment, etc. in performing the employee's business and the employer has not authorized the use. The cases hold that if the instrumentality used is substanitally different from that authorized, the use of the instrumentality must be deemed outside the scope and employer not liable. What is substantially different is generally measured by determining whether any greater risk is involved in the instrumentality used. |
|
|
Term
| authority to make representations |
|
Definition
| The injured party need only establish that the agent had authority to make statements cocnerning the subject matter invloved. Such authority may be express or implied from the circumstances or based on the principal placing the agent in a position to deceive. |
|
|
Term
|
Definition
| pro-community presumption, pro-wife presumption and presumption against joint tenancy in common at the divorce. |
|
|
Term
|
Definition
| if on the exam you encounter a situation in which the employee was driving employers car, ask was he advancing employer's business, if not employer not liable unless a permissive use statute applies. |
|
|
Term
|
Definition
| during marriage w gives sister a necklace, w divorces h, husband wants half of necklace. Since h cannot say when necklace was acquired he doesnt meet his burden of proof and loses. |
|
|
Term
| acquisition after dissolution |
|
Definition
| a party must show that the post dissolution acquisition was itslef acquired during marriage, possessed during marriage, or possessed at the end of a long marriage. |
|
|
Term
| 852 validity of transmutations |
|
Definition
| a transmutation of real or personal property is not valid unless made in writing by an express declaration that is made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected. Is not effective as to 3rd parties with out notice there of or recorded. This section does not apply to gifts between the spouses of clothing, wearing apparel, or jewelry,or other tangible articles of a personal nature that is used solely or principally by the spouse and that is not substantial in value considering the circumstances of the marriage. |
|
|
Term
|
Definition
| joint tenancy is half the seperate property of each spouse, and the creditor of one spouse alone can reach only half whereas all the community property could be reached. Creditors do have standing to rebut the joint tenancy presumption and have succeeded by showing that the couple did not know the difference between joint tenancy and community property. |
|
|
Term
| there is no right of survivorship in: |
|
Definition
|
|
Term
| at divorce a tenancy in common property is treated like? |
|
Definition
|
|
Term
| exception for joint bank accounts |
|
Definition
| 5305 provides that the spouses joint tenancy bank account is presumptively community property but that the presumption can be overcome by tracing to seperate funds that were deposited into the account. |
|
|
Term
|
Definition
| if work in question requires no particular skill or discretion so that the employer had attached no special significance to the identity of the employer, and if the services of the subservant are with in the scope of the agent's employment for the employer and are performed under the agent's supervision, the employer may be liable for subservant's acts. |
|
|
Term
| rule applies only to property titled in decedent |
|
Definition
| sec. 802 applies only to property to which the decedent had title at death. This it is directed at the surviving ex spouse who cliams against the decedent's estate that an asset not divided at divorce was former community property still half owned by the surviving ex spouse. sec. 802 presumes the property was during the marriage seperate property of the decedent. |
|
|
Term
|
Definition
| agency usually arises consensually with the principal and agent agreeing that the agent shall act on the principal's behalf. In such a case, the agent has the right to bind the principal to the extent that the principal and agent have agreed. Such a right is known as authority and the principal will be bound even if the third party with whom the agent deals does not know the agent has authority or that the agent is acting as an agent. |
|
|
Term
|
Definition
| most courts use the term actual authority to denote authority. |
|
|
Term
|
Definition
| is simply the ability to effect the legal relations of the principal regardless of the right to do so. |
|
|
Term
| a principal can also be bound in certian situations where the agent does not have actual authority. In such a situation, a true agency relationship may or may not exist. There may not be a mutual agreement between the principal and the agent. |
|
Definition
| but as between the principal and the third party with whome the agent dealt, the court will act as if the agent had authority by finding that the agent had the power to bind the principal. |
|
|
Term
| when confronted with the question of whether a principal will be bound by his agent's acts, the first matter to be dtermined is whether the agent has the power to bind the principal. If the agent had actual authority, power is assumed and the principal will be bound. If no actual authority then " |
|
Definition
| it must be determined whether some other source of power is available. Power can arise from apparent authority, estoppel, or ratification. |
|
|
Term
|
Definition
| arises from consent from the principal to the agent to accomplish a task and is controlled by the agent;s reasonable beliefs. The courts have referred to two types of actual authority:implied and express. |
|
|
Term
|
Definition
| is actual authority expressly granted by the principal and the agent. |
|
|
Term
|
Definition
| often grants of authority contain extravagant phases that could be construed as giving the agent extremely broad powers, example to do any business. Courts have generally limited this language to only the business actually intended by the parties. authority to sign for a transaction for the business does not include authority to sign for stuff unrelated to the business. |
|
|
Term
|
Definition
| perhaps the clearest example of express authority is a power of attorney, which is a written instrument that states an agent's authority. |
|
|
Term
|
Definition
| any authority implied by the agent from the words or conduct between the principal and the agent. |
|
|
Term
| incidental to express authority |
|
Definition
| in most cases, the principal does not expressly grant detailed authority to the agent. Instead, the agent is given a general authority or objective- to sell the prinicipal's goods or to purchase on the principal's behalf. Such an express grant includes the implied authority to act in any way that is natural. It includes all acts reasonably necessary to accomplish the given objective. This sort of implied authority is called incidental or inferred authority. |
|
|
Term
| implied from principal's manifestations |
|
Definition
| actual authority may be impliedly conferred by the manifestations of the principal through words or conduct indicating his intention to confer it, or by otherwise causing the agent to believe that she possesses it. |
|
|
Term
|
Definition
| for many years pam has delivers her cattle to alison. Alison has sold the cattle for the best price. Upon pam's current delivery of cattle, in the absence of instructions, alison has implied authority to sell the cattle. |
|
|
Term
|
Definition
| peter's secretary andrew, without previous authorization, has purchased office supplies, and peters has paid without objection. Andrew has implied authority to continue to purchase necessary office supplies for peter. |
|
|
Term
| implied from custom or usage |
|
Definition
| unless directed otherwise, an agent also has implied authority to act in accordance with general custom or usage, provided the agent has knowledge of the custom or usage. |
|
|
Term
|
Definition
| pat appoints aron as manager of his business. Aron has implied authority to carry out all of the normal operative functions of a manager in that type of business. |
|
|
Term
| implied because of emergency |
|
Definition
| in an unforseen emergency, where the agent cannot contact the principal to obtain additional authority, the agent is impliedly deemed to have the authority to do all acts reasonably necessary to protect or preserve the property or rights of the principalI including the right to delegate authority and appoint subagents). |
|
|
Term
|
Definition
| peter ships his crops to al. Upon arrival, al notes that the crops are infected and must be treated. If al cannot reach peter, al has implied authority to order the necessary treatment on peter's behalf, and pater is liable for the cost. |
|
|
Term
|
Definition
| if your exam requires you to determine whether the agent had actual authority, dont just look for express authority, the agent also has actual authority to do anything that a reasonable person in the agent's position would presume was authorized based on the communications or conduct between the principal and agent.(implied). |
|
|
Term
| implied authority checklist |
|
Definition
| a. incidentally from express authority b. from principal's manifestations (words or conduct) c. from custom or usage d. from an emergency situation |
|
|
Term
specific examples of implied authority
-agency to sell |
|
Definition
| an agent who is given authority to sell can make warranties, receive payments, deliver goods, negotiate, conclude sale. |
|
|
Term
|
Definition
| an agent authorized to sell property on behalf of the principal is empowered to make such warranties concerning the property as are implied by law or customary in the community in connection with sales of such property. |
|
|
Term
|
Definition
| an agent is not necessarily prevented from making additional terms as long as such terms are more advantageous than or at least not inconsistent with the specified terms. |
|
|
Term
| mechanical or ministerial acts |
|
Definition
| an agent has authority to delegate when the act delegated is purely mechanical or ministerial. |
|
|
Term
|
Definition
| peter authorizes ali to inventory peter;s incoming merchandise and issue reciepts. These acts are purely mechanical and ali can delegate the task to a subagent. |
|
|
Term
| agent cannot perform act herself |
|
Definition
| when the act is such that the agent cannot lawfully perform it herself, the agent has authority to delegate the act to a subagent who can perform it. |
|
|
Term
|
Definition
| pete engages amber to auction off peter's goods, knowing that only a licensed auctioneer is permitted to conduct such a sale. If amber has no license she can delegate the authority to conduct the sale to any licensed auctioneer. |
|
|
Term
|
Definition
| the agent has authority to appoint subagents whenever it is customary or necessary to do so. |
|
|
Term
|
Definition
| if pete employs broker ali to sell his property, it is customary for brokers to appoint each other as subagents to procure buyers for listed properties. Ali has authority to appoint any other broker as her subagent. Any broker so appointed has the same authority as ali to negotiate a sale. |
|
|
Term
| subagent not party to agency agreement |
|
Definition
| even though an agent has the power to delegate her authority to another, the subagent is not a party to the principal agent agreement. The subagent yesenia generally has no right to sue the principal for the compensation that the principal agreed to pay the agent for performance of the agency services, yesenia's claim being against the agent who hired her. |
|
|
Term
examples of implied authority
-selling agent |
|
Definition
| make warranties,receive payment, deliver goods, negotiate terms and conclude sale. |
|
|
Term
examples of implied authority
-purchasing agent |
|
Definition
| make warranties, pay purchase price, accept goods and conclude purchase. |
|
|
Term
|
Definition
| mechanical and ministerial acts, agent cannot perform and custom or necessity. |
|
|
Term
|
Definition
| when the agent deceives the principal into granting her authority-for example if amber falsley represents her qualifications as a sales agent to pete, and in reliance pete authorizes amber to sell goods, amber has valid authority and any sale effected by amber is binding on pete. |
|
|
Term
| discovery of fraud by principal |
|
Definition
| if pete discovers fraud before any sale, he may revoke the authority even if the authority would otherwise be irrevocable. |
|
|
Term
| instructions-limitations on actual authority |
|
Definition
| directions given by the principal to the agent- does this create a limitation on the agent's authority or is it just mere advice to the agent? theres no answer and courts will look at principal's intent and whether he could be reached. |
|
|
Term
| termination of actual authority |
|
Definition
| an agent's actual authority can be terminated by 1. expiration of agency term or accomplishement of purpose 2. by change of circumstance or death/incapacity of party 3. by act or agreement of the parties. |
|
|
Term
| apparent (ostensible) authority |
|
Definition
| a principal will be bound by his agent's unauthorized acts if the principal has manifested to a third party, through words or conduct, that the agent has authority, and the third party reasonably relies on this manifestation. |
|
|
Term
| apparent (ostensible) authority |
|
Definition
| there is a general rule in agency law that a third party delas with an agent at his on peril, the third party has the duty of determining the scope of the agent's authority and willbear the loss if the agent acts outside that scope. |
|
|
Term
| effect of apparent authority |
|
Definition
| apparent authority gives the agent the power to bind the principal, but not the right, which can be derived only from a grant of actual authority. Thus, although a principal will be bound by anagent who acts with apparent authority, the principal usually can hold the agent liable for breach of duty. |
|
|
Term
| relationship to actual authority |
|
Definition
| while actual authority focuses on the agent's power to bind the principal by virtue of the principal's manifestations to the agent, apparent authority is based on the principal's manifestations to third parties. |
|
|
Term
|
Definition
| pete writes to amber, directing her to act as pete's agent for the sale f a ranch. Pete sends a copy of this letter to tom, a prospective purchaser. Amber has actual authority to sell the ranch to anyone, and as to tom, amber has apparent authority as well. |
|
|
Term
| relationship to actual authority |
|
Definition
| it is often said that an agent's apparent authority is usually consistent with her actual authority becuase the principal's manifestations to the third party are often similar to his manifestations to the agent. |
|
|
Term
|
Definition
| pete leaves his car with amber, directing amber to find a buyer for the car but not to accept any offers without pete's approval. Subsequently, buyer asks pete about the car, and pete tells buyer that he should work out a deal with amber. In this situation amber has no actual authority to sell, but she does have apparent and pete is bound if she sells the car to buyer. |
|
|
Term
| note:technically apparent authority only arises in the absence of: |
|
Definition
|
|
Term
|
Definition
| be sure to remember that in an apparent authority situation, you need to discuss what transpired between the principal and the third party. This differs from an actual authority situation, where you would be discusiing what transpired between the principal and agent. Ask yourself what the principal did to indicate to the third party that the agent had authority. |
|
|
Term
requisities for apparent authority
-holding out by principal |
|
Definition
| there must be some act by the principal that causes the third party to reasonably believe that the agent has authority. An agent cannot create apparent authority by her own acts. |
|
|
Term
|
Definition
| regardless of whether apparent authority is based on estoppel or the objective theory of contract, the principal will be bound only if the third party reasonably relied on the principal's manifestation of authority. If the third party knew or had reason to know that the principal was in error, no apparent authory will arise. |
|
|
Term
|
Definition
| the test for reliance is what a reasonable person under circumstances would have belived- a test that is sometimes difficult to apply. |
|
|
Term
|
Definition
| customer cali calls pete's office and asks for the price of pete's product. Pete's secretary answers the phone and supplies bad prices. If cali relies on the prices on bidding, is pete bound by the bad prices? This depends on whether a reasonable person in cali's position would have believed that pete's secreatry was authorized to supply such info. (perhaps so for a small business, not for a lare corp.). |
|
|
Term
|
Definition
| if an apparent authority situation presents itself on an exam, you must look for and discuss two requirements for apparent authority:the principal held the agent out to a third party as having authority, and the third person in fact reasonably relied on the holding out. |
|
|
Term
apparent authority may arise in certain circumstances even though the agent has no actual authority
-imposters |
|
Definition
| if the principal negligently permits an imposter to be in a position where the imposter appears to have authority to act for the principal the imposter may have apparent authority. |
|
|
Term
|
Definition
| an agent whose actual authority has been terminated will have apparent authority as to person who knew of the agent's prior authority but were not properly notified of the termination of actual authority. |
|
|
Term
where the agent has some actual authority
-prior acts |
|
Definition
| if the principal has previously allowed the agent to act beyond her authority and the principal knows that a third party is aware of this fact, the principal is bound by the agent's unauthorized act. |
|
|
Term
| amber, a janitor in pete's employ, has no authority to employ other people. on two prior occasions, amber hired tom to do some painting in pete's building. pete paid tom with no protest. If amber hires tom to do more painting, pete will be liable because of amber's apparent authority. |
|
Definition
|
|
Term
|
Definition
| when an princiapl appoints an agent to a position that customarily carries with it certian authority and a thrid person sees him in that position, even though he wasnt granted certain authorites employer would still be bound. |
|
|
Term
| liability for false factual warranties |
|
Definition
| if the warranty is a representation of an existing fact subsequently proved false, the principal may be liable under either a tort theory of misreprentation or a contract theory of breach of warranty. |
|
|
Term
|
Definition
| tort liability requires proof of scienter(knowledge of falsity or reckless disregard of truth) by either the principal or agent. |
|
|
Term
estate of leslie
-can get inerest in husband's seperate property but how much depends |
|
Definition
| a surviving spouse has the same rights as a real wife, therefore putative wife gets deceased husband seperate property but depends if their is an heir to the interest. If no children gets 100%, if 1 child, gets 50%. If 3 children, wife gets 50% and other children split 50%. |
|
|
Term
|
Definition
| rule: it owuld seem both logical and equitable to divide the property equally, awarding the putative wife the half to which she presumably contributed and giving to the legal but deserted wife the half over which the husband normally has testamentary control. |
|
|
Term
| termination of apparent authority |
|
Definition
| apparent authority is not terminated merely by giving notice to the agent. Rather, notice of the termination of apparent authority must be given to the third party to whom authority was originally manifested. |
|
|
Term
|
Definition
| p appoints a as agent to sell home to t. p revokes a's authority. This would terminate actual authority. However, until p tells t, a's apparent authority will persist and any contracts entered into between t and a on behalf of p would be binding. |
|
|
Term
|
Definition
| notice need not come to the third party directly from the principal. Motice of termination will be effective as long as it is from any reliable source. |
|
|
Term
| expiration of stated limitation |
|
Definition
| if apparent authority is originally conditioned as to time or events, an expiration of the time period (or occurence of the event) will terminate the authority. |
|
|
Term
|
Definition
| the death or incapacity of a principal does not autimatically terminate the agent's apparent authority if the third party has no notice of the death and belives the agent is acting with actual authority. |
|
|
Term
|
Definition
| estoppel is a remedy applied to prevent a principal who has misled another from profiting from his own misconduct. estoppel may be invoked whenever the principal has intentionally or carelessly caused or allowed a third party to believe that his agent has authority to do that which in fact the agent is not authorized to do so, or fails to take reasonable steps to notify the third party when he has notice of the third party's belief, and the third party detrimentally relies so that it would be unjust to allow the principal to deny the agent's authority. |
|
|
Term
|
Definition
| pete learns that amber, who has no authority to sell pete's land, is negotiating for its sale with tom on the representation that amber is pete's agent. Pete does nothing. Pete is bound to deliver the equipment to tom at the agreed price, and he is also liable to tom of breach of any warranty customary in such a sale. Pete is bound to perform as if amber was his agent, being estopped to deny such authority. |
|
|
Term
| one of the most important tested questions on an exam is whether the agent had the power to act on behalf of the principal. In answereing such a question, you should look first to: |
|
Definition
| actual authority, then apparent, and then see if the employer can be estopped. Finally look to see if the principal ratified the agent's act and if the agent's authority has been terminated or not. |
|
|
Term
termination of actual authority
-reasonable time |
|
Definition
| if no time is specified by the parties, a reasonable time is implied and the authority terminates at the end of a reasonable period. example- pam authorizes ceslie to cell car- 10 years elapses, the agency would be deemed terminated. |
|
|
Term
| once the agent fullfills his purpose: |
|
Definition
| is terminated, but note agents must have notice that the purpose was fullfilled. |
|
|
Term
|
Definition
| if the house burnt down the agency is terminated. |
|
|
Term
| change of circumstances affecting value |
|
Definition
| similarly if there is a basic and unforseen change of circumstances that substantially affects the value of the subject matter, or otherwise makes it apparent that the principal would not wich the agent to sell authority is terminated. Example: pam authorizes amber to sell land for 10,000. Then minerals are discovered tripling the value, Amber's authority to sell for original amount is terminated. |
|
|
Term
|
Definition
| war, bankruptcy, changes of law and ambezzlement or disloyalty of the agent. |
|
|
Term
|
Definition
| if prinicpal loses the capacity to do an act, then the agent's actual authority to do the same act is terminated. But has to be notified. |
|
|
Term
|
Definition
| an agent's authority is not necessarily terminated if agent becomes mentally incapacitated. Only if she cannot do the particular act authorized. |
|
|
Term
|
Definition
| if on an exam you have to determine whether an agent's authority to act for a principal is terminated due to incapacity, ask yourself if the agent can still perform the act authorized by the principal even though she is incapacitated. If so the agent's authority will not terminate. |
|
|
Term
|
Definition
| agency powers may be held to be irrevocable by the principal because the agency is really for the benefit of the agent. Such powers do not terminate on the death or incapacity of the principal or agent, and their exercise therefore binds the principal's estate. |
|
|
Term
| by act or agreement of the parties |
|
Definition
| because the agency is consensual, it can terminate if either or both parties agree or communicate an intention that the authority shall end. |
|
|
Term
| revocation of authority by principal |
|
Definition
| principal can terminate egency at any time |
|
|
Term
| principal may terminate agent's contract at any time but may be held |
|
Definition
| liable for breach of contract because the principal had the power but not the right to revoke authority. |
|
|
Term
| termination when power is given as security for the benefits of the agent |
|
Definition
| cannot terminate when principal dies because it is in agent's benefit. |
|
|
Term
| termination of apparent authority |
|
Definition
| continues despite the termination of actial authority until it is no longer reasonable for the third party with whom the agent deals to believe that the agent continues to act with actual authority. |
|
|
Term
|
Definition
| in cases where the agent;s apparent authority arose from representations by the principal to the public at large, notice by advertisement or similar means is generally sufficient to terminate the agent's apparent authority. |
|
|
Term
|
Definition
| if thw writing granting the agent authority has been recorded, the principal must record a revocation of the authority. |
|
|
Term
|
Definition
| if a written authorization indicates specific conditions upon which the agent;s authority will terminate (such as a date) and the third party learns of this, that is all that is necessary. |
|
|
Term
| only the principal may ratify and the act being ratified must be one that can be performed by an agent (illegal acts cannot be ratified). |
|
Definition
| The principal must have all the facts at the time of consent otherwise its not a ratification. |
|
|
Term
| you can only ratify the act if: |
|
Definition
| I was alive(existed) and had capacity |
|
|
Term
| a ratification is the yes by a person of a prior act supposedly done on his behlaf, but was not authorized. |
|
Definition
| the essence of ratification is that the prior unauthorized act is treated as if it had been authorized by the principal. |
|
|
Term
| agreement treated as offer |
|
Definition
| the third party's agreement with the agent is deemed to be no more than an offer to the principal. |
|
|
Term
| no ratification- no contract |
|
Definition
| it follows that if the principal never ratifies there is no contract between the third party, and the agent can be liable. |
|
|
Term
| ratification -acceptance of offer |
|
Definition
| if the principal ratifies however he is deemed to have accepted the third party's offer and becomes bound by the contract. |
|
|
Term
|
Definition
| ratification may establish both the agent's authority and the agency relationship. Thus after ratification the principal becomes liable for the agent's act and the agent is relieved of liability to the principal. |
|
|
Term
|
Definition
| the traditional rule is that once an agent's act is ratified, it is treated as though it had been authorized from the outset. All rights and liabilities are therefore said to relate back to the date of the original unauthorized act. In other words, ratification is retroactive. |
|
|
Term
| when ratification is not effective |
|
Definition
| ratification is not effective if it benefits a person who engaged in misrepresentation or other conduct that would make a contract voidable, the principal ratified the transaction to avoid a loss and the resulting benefit is in favor of the agent( for example if the agent's unauthorized act forces the principal to take action to avoid a loss, the agent is not exonerated and the principal's act in avoiding the loss does not operate as a ratification of the agent's act or it would prejudice innocent persons who acquired rights in the transaction prior to ratification. |
|
|
Term
| act on principal's behalf |
|
Definition
| the act ratified by the principal must have been undertaken by a person who acted or purported to act on the principal's behalf. Thus ratification may create a relationship of agency where none existed before. when the actor is not an agent and does not purport to be one, neither agency law nor ratifiaction applies. |
|
|
Term
|
Definition
| amber poses as the owner of land and sells it to tom. Later pam, the real owner, discovers that a,ber has done and decides to affirm the sale to tom. No ratification results and tom is not bound to purchase from pam because amber was not purpoting to act as pam's agent. |
|
|
Term
| undisclosed principal cannot: |
|
Definition
| ratify, and has no power to accept |
|
|
Term
| partially disclosed principals |
|
Definition
| if the agent discloses the fact that she is acting as an agent for some principal but does not disclose the identity of the principal, the restatement second provides that only the person whom the agent intended to be the principal can ratify. |
|
|
Term
|
Definition
| only acts that can be performed by agents may be ratified. An act cannot be ratified if it is currently illegal or contrary to public policy. |
|
|
Term
|
Definition
| there can be no effective ratification unless the principal has actual knowledge of all material facts at the time of ratification. the principal can revoke only if there is no detrimental reliance from third party. |
|
|
Term
| principal may assume risk of lack of knowledge |
|
Definition
| if the principal's ignorance of the facts arises from his own failure to investigate, under circumstances in which a reasonable person would have made an investigation, he is held to assume the risk of his lack of knowledge. The ratification is effective despite the fact that the principal did not know certain material facts. |
|
|
Term
|
Definition
| a principal can ratify an act if the principal existed at the time of the act and had capacity at the time of ratification. Thus a principal who was not in existence at the time of the agent's act cannot ratify. |
|
|
Term
|
Definition
| when determining whether the principal has capacity to ratify, remember that capacity is determined at the time of ratification- the principal need not have had capacity to ratify at the time of the act. Thus, the principal can ratify an act even if there is no capacity until after the act. |
|
|
Term
| partial incapacity-contracts voidable |
|
Definition
| if the principal's incapacity makes his contracts voidable, he may ratify after the incapacity is removed. for ex. amber buys a car for 17 year old tom. When tom becomes 18 he can ratify and will be bound. |
|
|
Term
| principal must manifest intention to be bound |
|
Definition
| ratification requires some words or condcut by the principal that manifests his intention to be bound by the agent's act. Statements or conduct by the agent or some other third person will not suffice. |
|
|
Term
| ratification need not be communicated |
|
Definition
| it is not necessary that the principal notify or communcate affirmation to the agent. Just accepting the benefits is good enough. |
|
|
Term
|
Definition
| notifying agent or third aprty is sufficent for express ratifiaction. |
|
|
Term
| implied affirmation- ratification be conduct |
|
Definition
| if no words, that if conduct by the principal that sufficiently evidences the intent to affirm the transaction. |
|
|
Term
|
Definition
| voluntary accpetance of benefits is a good ratification |
|
|
Term
| exception- involuntary retention |
|
Definition
| if retention is involuntary-there is no ratification. For example amber buys fertilizer and spreads it on pam's land. Pam knows nothing of this. This is not a ratification. |
|
|
Term
| failing to act when duty to do so |
|
Definition
| without authority amber places an order wit tom, pam learns of this but does nothing to stop it, he ratifies. |
|
|
Term
|
Definition
| if the issue in an exam question is whether the principal has indicated an intention to be bound by his agent's unauthorized act, remember that the principal does not have to expressly affirm the agent's act (by notifying the agent or third party that he wants to accept the deal) to be bound by it. Rather the principal often impliedly affirms the act. Therefore, be sure to check the facts to see if the principal retained the benefits to the act, brought suit to maintain a defense, or failed to repudiate the act when he had duty to do so, the principal has ratified the agent's act. |
|
|
Term
| entire transaction must be ratifed |
|
Definition
| a contract or other single transaction must be ratified in its entirety to have an effective ratification. The principal cannot just ratify the good parts. |
|
|
Term
|
Definition
| the death or incapacity of the third party will also terminate the principal's power to ratify. |
|
|
Term
change of circumstance
-if principal ratifies and after a material change occurs that would make it inequitable to subject the third party to liability, the third party can avoid the transaction despite ratification. |
|
Definition
| for example- house burns down a day after you accepted offer. Ratification of contract will not bind buyer. |
|
|
Term
|
Definition
| a change of circumstance occuring after ratification by the principal will not be sufficient to avoid ratification. |
|
|
Term
|
Definition
| a princiapal's ratification will be ineffective if the principal does not ratify the entire transaction, the third party revokes the offer before the principal ratifies, or the circumstances change before ratification so that it would be inequitable to hold third party liable. |
|
|
Term
| estoppel to deny ratification |
|
Definition
| a principal is estopped from denying a ratification if the ratification induces a third party to detrimentally change his position. |
|
|
Term
| notice is a concept that includes: |
|
Definition
| notification and knowledge |
|
|
Term
|
Definition
| involves an act intended to bring to the principal knowledge that affects her legal rights. |
|
|
Term
|
Definition
| 1. if the agent that had apparent or actual authority has gotten notified than the principal should be considered to have also have recieved 2. notification will not become ineffective because of the passage of time. |
|
|
Term
|
Definition
| is subjective. 1. An agent's knowledge will be discussed with the principal only if it concerns the subject matter of the agency and is within the scope of the agent's actual authority. 2. becuse knowledge is subjective, it may become ineffective because of the passage of time. |
|
|
Term
|
Definition
| a person has notice of a fact if he knows of it, has reason to know it, should know of it to fullfill a duty owed to another person or has been given notification of it. |
|
|
Term
|
Definition
| is subjective and involves an awareness |
|
|
Term
| an agent has a duty to inform the principal of all matters in connection with the agency that the principal would desire to know. If the agent breaches this duty, the principal will have to accept the consequences of the agent's breach not the innocent third party. |
|
Definition
| because the principal chose this agent. The principal is deemed to know all that the agent should know. |
|
|
Term
|
Definition
| the principa`l is not charged with knowledge of facts learned by the agent before or after his employment, must be during the period of agency. |
|
|
Term
|
Definition
| it is immaterial when the agent acquired the knowledge. The issue is whether he had the knowledge in mind when it became relevant in his work in mind. |
|
|
Term
| interest must be substantially adverse |
|
Definition
| many courts have held that the agent's interest must be substantially adverse to the principal 's interest in order to prevent imputation of knowledge. |
|
|
Term
|
Definition
| despit the fact that the agent is acting adversly to the principal a principal can be liable if 1. knowledge is necessary to protect the rights of a third party who dealt with the principal in good faith and without knowledge of the agents adversity 2. the principal has ratified the agents actions 3. the principal knowingly retained the benefits from the agents actions. |
|
|
Term
|
Definition
| 1. subjective awareness of a particular fact 2.(authority required for imputation) principal will be charged with agent's knowledge only if agent had actual authority in the transaction to affect principal's rights 3. may become ineffective because of the passage of time 4. (effect of adverse agent) knowledge not imputed to principal because agent was acting outside the scope of authority. |
|
|
Term
|
Definition
| 1. an act calculated to give information to another that affects the legal relationship between the parties. 2. (authority required for imputation) principal will be charged with notification given to agent if agent had any actual or apparent authority in the transaction to recieve notification. 3. continues indefinetly and does not become ineffective because of passage of time. 4. (effect of adverse agent) notification still imputed to principal unless third party knew agent was acting adversely. |
|
|
Term
| the agent can be held liable in a number of circumstances |
|
Definition
| if the agent lacked authority, even if the agent acted with authority sometimes can be liable, if the principal is disclosed the agent can be held liable if her name appears on the contract as a party and not merely as an agent, if the principal is unidentified or undisclosed. |
|
|
Term
| the third party generally can be held liable only by the principal. |
|
Definition
| if agent fraudulently conceals the principal's identity the principal may not be able to enforce the contract. |
|
|
Term
|
Definition
| if the agent purports to act on behalf of a principal when entering into a contract with a third party but is in fact acting without authority or in excess of her authority (by making unauthorized representations), the principal generally cannot be held liable to the third party absent some other source of agency power. In such cases, the agent alone is liable. Depending on the situation, the agent's liability may be based on the breach of warranty, on the contract, or both. |
|
|
Term
| agent's liability for breach of warranty-disclosed or unidentified principal |
|
Definition
| An agent who purports to enter into a contract with a third party on behalf of a principal impliedly warrants that she has authority to bind her principal. If the agent was not authorized or exceeded her authority, so that the principal is not bound, the agent may be liable to the third party for breach of the warranty of authority. |
|
|
Term
|
Definition
| obviously, there can be no breach of warranty liability in an undisclosed principal case. In that case, the agent does not warrant that she has any authority to act for another (in fact the third party doesnt even know that there is a principal). Thus, you should consider the warranty theory only in a disclosed or unidentified situation. |
|
|
Term
|
Definition
| it is essential that the third party rely on the warranty, example an agent is not liable if the third party knows that the agent was mistaken as to her authority. |
|
|
Term
|
Definition
| under this warranty theory of liability, the agent is liable even though she belived in good faith that she was authorized. Moreover, if the agent intentionally misrepresents that she has the requisite authority, she may also be held liable in tort for deceit. |
|
|
Term
| No warranty of performance |
|
Definition
| The agent's implied warranty of authority, does not include a warranty that the principal will perform the contract, or even that he is capable of performing it (ex:has money to perform). |
|
|
Term
| distinguish- warranty of competence |
|
Definition
| The implied warranty of authority,however, is deemed to include the agent's warranty that the principal is not legally incompetent. (if the principal were incompetent, he would not have the capacity to appoint an agent or grant authority to the agent in the first place).If an agent makes a contract on behalf of a non=existent or incapacitated principal, the agent becomes a party to the contract. |
|
|
Term
| contract liability to third parties |
|
Definition
| did the agent have authority to bind the principal- yes-- was the principal disclosed, unidentified or undisclosed---- disclosed meaning principal is liable and agent is not unless she agreed to be personally bound. If undisclosed or unidentified--- than both the principal and agent are liable on the contract, but thrid party is entitled to one recovery. Note an undisclosed principal cannot ratify the contract. |
|
|
Term
| contract liability to third parties |
|
Definition
| did the agent have authority to bind the principal---if no than did the principal ratify the contract---if no then principal is not liable; agent liable for breach of warranty if she purportedly acted on behalf of the principal; agent liable on the contract if the principal was unidentified or undisclosed. |
|
|
Term
| agent's liability on contract- undisclosed or unidentified principal |
|
Definition
| distinct from an agent's liability for breach of warranty is the agent's liability on the contract itself. An agent who without authority enters into a contract with a third party is liable to the third party on the contract if the principal is undisclosed or unidentified. If the principal is undisclosed the agent is the only party on the contract (she is the promiser) and therefore she is liable on the contract. |
|
|
Term
| distinguish- disclosed principal |
|
Definition
| however, if an agent purports to act on behalf of a disclosed principal when contracting with a third party, and the agent in fact acts without authority or in excess of her authority, the agent is not liable on the contract. The agent was not intended to be personally liable; the agent purported to be acting on the principal's behalf, and the parties intent was that the principal be bound. Recall, however, that the agent can be liable for breach of warranty. |
|
|
Term
|
Definition
| on your exam, if you see an agent contracting without authority or in excess of authority, be sure to consider both possible ways for the agent to be liable to the third party: breach of warranty and on the contract. Remember that i the principal's existence has not been disclosed, the agent can only be liable on the contract. If the principal's existence and identity have been disclosed, the agent can be liable only for breach of warranty. If the principal's existence has been disclosed but not his identity, the agent canbe liable both for breach of warranty and on the contract. |
|
|
Term
| agent's liability to third part when acting without authority |
|
Definition
1.disclosed principal situation----agent liable for breach of warranty not on contract.
2. unidentified principal situation--- agent liable for breach of warranty and on contract.
3. undisclosed principal situation---agent not liable for breach of warranty but liable on contract. |
|
|
Term
| principal's liability-when third party has performed |
|
Definition
| as noted, a principal is generally not liable on a contract entered into by an agent acting without authority or in excess of authority. However, if the agent exceeds her authority, but the third party renders full or part performance under the contract, the third party may be entitled to sue the principal in quasi contract for the value of the benefits conferred on the principal, even though the third party cannot enforce the contract itself against the principal absent the principal's reatification. |
|
|
Term
|
Definition
| your exam will likely have an agent enter into a contract with a third party for a principal and ask you to determine if the agent and/or principal is liable to the third party and to whom is the third party liable.In this situation, you will have to be prepared to discuss the type of principal (disclosed,unidentified, or undisclosed) involved in the transaction, because the agent's liability depends on the type of principal. You also should consider the intent of the parties when determining their liability, because the parties intent controls. |
|
|
Term
| contract in name of principal (disclosed principal cases) |
|
Definition
| If the agent negotiates a contract in the name of the principal, the agent is not a party to the contract unless the agent and third party agree otherwise. Thus she is not liable on the contract and is not entitled to enforce it aginst any other party or to otherwise assert any rights under it. The other party to the contract is liable directly to the principal and vice versa. |
|
|
Term
|
Definition
| amber executes a contract that makes clear that amber is executing the contract solely on pam's behalf. If amber acts are authorized, she is not liable for pam's nonperformance of the contract, nor is she entitled to assert any rights under the contract. |
|
|
Term
| need not specify principal |
|
Definition
| if the third person knows or should know the identity of the principal, the principal is disclosed even though his name does not appear on the contract or the agent does not specifically state that she is acting for a principal. (the agent is not party to this contract). |
|
|
Term
|
Definition
| tom knows that pam is amber's employer and the owner of a horse that amber is offering to sell. If tom buys the horse from amber, he cannot hold amber as a party to the sale. |
|
|
Term
|
Definition
| an exception to the genral rule that an aget is notliable on a contract that he enters into in the name of the principal occurs when the parties intend the agent to be personally liable; however, the parol evidence rule may prohibit the use of extrinsic evidence to establish intent if a written contract is involved. |
|
|
Term
| exception-ambiguous contracts |
|
Definition
| extinsic evidence is admissable when contract terms are ambiguous. To determine if a contract is ambiguous, courts look at the entire contract, but often start by examining the form of the agent's signature. Generally, the agent is personally liable when his signature does not indicate that he signed in a representative capacity. If the signature clearly indicates thathe signed only in a representative capacity, the principal alone is liable. |
|
|
Term
contract in name of agent only(undisclosed and unidentified principal cases)
-undisclosed principal |
|
Definition
| In undisclosed principal cases, both the fact of agency and the principal's identity are undisclosed, and the agent is generally liable as a party to the contract. However, the agent may have a right to indemnifcation from the principal if an agency agreement exists. If no agency agreement exists (ex:gratuitous agent), but the principal accepted the benefits of the contract, the agent may recover from the principal in quasi contract. |
|
|
Term
| liability of principal to third party |
|
Definition
| Once the principal's identity is made known, he may also be held liable on the contract if the agent's acts were authorized. Thus, the third party may hold either the principal or agent liable. The modern view is that the parol evidence rule does not apply to prohibit the admission of extrinsic evidence to show that one signed as an agent. The statute of frauds however, does apply in that if the contract the agent is enteringinto must be writing, so must the agent's authority. |
|
|
Term
| Requirement of election by third party |
|
Definition
| although the third party has a right against either the principal or agent, he can recover from only one of them. The modern rule is that the third party can file suit against both, but upon objection of either party, the third party must elect prior to judgement which party he wishes tohold liable. The minority view holds that suit filed against one acts as an election to release the other party from liability. |
|
|
Term
| principal still undisclosed |
|
Definition
| if the third party obtains a judgement against the agent withotu knowledge of the principal's indentity, and the judgement is unsatisfied, the third party can later sue the principal when the principal's identity is discovered. |
|
|
Term
|
Definition
| either the principal or agent can enforce the contract against the third party, but the principal is entitled to all benefits of the contract )as if he were the assignee to the agent's rights). However, the 3rd party has a right to revoke the contract if the agent fraudulently represented that she was contracting for herself or if enforcement by the principal would impose an added or different burden of performance on the 3rd party. Note that fraud is involved only if the principal hides his identity because the third party would not deal with him otherwise. |
|
|
Term
| exception- powers given for benefit of agent |
|
Definition
| if the agent's powers are irrevocable because she has some interest in the subject mater the agent rather than the principal is entitled to any recovery from the third party. |
|
|
Term
| agent's personal performance |
|
Definition
| the third party may refuse a tender of performance from the principal and can insist upon personal performance by the agent if the duties under the law of contracts are nondelegable ( example- credit of personal service contracts) |
|
|
Term
|
Definition
| in certain cases, the third party knows that the agent is acting as an agent but does not know the identity of the principal. If the agent has signed or described herself as an agent of another, the agent is a party to the contract unless otherwise agreed. Extrinsic evidence is admissible to show whether the parties intended the agent to be personally bound. |
|
|
Term
|
Definition
| is admissable only if there is ambiguity. Extrinsic evidence includes the acts, declarations, and relationships of the parties and the circumstances surrounding the execution of the contract. |
|
|
Term
exam tip:before you determine that an agent contracting on behalf of a disclosed principal is notliable on the contract, you must frist examine the intent of the parties. You can examine the intent of the parties by looking at the contract and the surrounding circumstances (extrinsic evidence). But remember that if the contract is in writing, the parol evidence rulemay prohibit the admission of extrinsic evidence of intent:
|
|
Definition
| in which you must solely look to the contract. But note that if the contract is ambiguous (form of agent's signature not clear) you may look to extrinsic evidence in determining the parties intent. |
|
|
Term
| exam tip: in determining who is liable to the third party on a contract entered into by an agent for an undisclosed principal, remember that the third party may sue both the principal and agent, but the third party is entitled to only one recovery: |
|
Definition
| (the third party may not satisfy a judgement against both the principal and the agent). |
|
|
Term
| exam tip: watch out for a situation where a 3rd party refuses to perform on a contract entered into by an agent for an undisclosed principal. Although the general rule is that the third party is liable to the principal on the contract -because the rights and benefits of the contract flow from the agent to the principal-there are exceptions- |
|
Definition
| to the rule. Remember that the 3rd party does not have to perform if the agent fraudulently concealed the principal's identity, the performance to the principal would impose a great burden on the third party or the agent's authority is coupled with an interest. If any these apply the 3rd party is not liable to the principal. |
|
|
Term
| agent acting with authority |
|
Definition
| 1. disclosed- the third party should know principal's identity. Principal is on contract only unless agreed that agent is also. Principal can enforce contract. Agent has no contracts rights. Parole evidence is not admissable unless there is ambiguity. |
|
|
Term
| agent activity with authority |
|
Definition
| 1. undisclosed- third party does not know that there is an agency nor principal's identity. Principal and agent are on contract. Principal can compel third party's performance unless agent fraudulently cocnealed principal's identity, or performance would impose a greater burden on 3rd party, or agent's authority is coupled with an interest(only agent can compel performance). Agent has contract rights of indemnification or relief based on quasi contract. Parole evidence is admissable to show agent was acting on behalf of principal. |
|
|
Term
| agent acting with authority |
|
Definition
| 1. unidentified- third party has notice that agent is acting as agent but does not know principal's 3rd indentity. Principal and agent are on contract unless agent and 3rd party agree agent is not party. Principal can enfroce terms. Agent can enforce terms. Parole evidence is admissable to show parties intented agent to be bound or not. |
|
|
Term
| an agency is generally defined as the relationship that arises when one person, the principal, manifests an intention- |
|
Definition
| that another person, the agent, shall act on the principal's behalf. The manifestations can occur by express or implied agreement between the principal and the agent, or after the fact by the principal's ratification of the agent's act. |
|
|
Term
| even if there is no agreement or ratification, an agency can arise from the principal's conduct toward third ---- that causes them to believe that the principal has appointed someone to be his agent(apparent or ostensible). |
|
Definition
|
|
Term
| there are a few other requisites for the creation of an agency: |
|
Definition
| the principal must have the capacity to contract(the agent need not have such capacity), and although no consideration is required and generally no writing is required (except where the statute of frauds or an equal dignities rule applies), the agency must be formed for a legal purpose. |
|
|
Term
| scope and purpose of agency |
|
Definition
| agency is a device that allows one person to appoint another person to act for him in such a way as to effect legal acts and liabilities. Regardless of the setting, the law of agency concerns the rights and liabilites created when one person acts for another. |
|
|
Term
|
Definition
| agency is defined as the fiduciary relationship that results from the mutual manifestation of consent that one person (the agent), shall act on behalf of and subject to the control of another person (the principal). It does not matter what the principal truly intended, rather the agency relationship depends on what the agent believed the principal intended. Thus an agency relationship can arise even if the principal subjectively intended no relationship. |
|
|
Term
|
Definition
| a principal is disclosed if the third party with whom the agent is transacting business knows that the agent is acting for a principal and knows the principal's identity. |
|
|
Term
|
Definition
| a principal is unidentified if the third party with whom the agent is transacting business knows that the agent is acting for a principal but does not know the principal's identity. |
|
|
Term
|
Definition
| a principal is undisclosed if the third party with whom the agent is transacting business does not know that the agent is acting for a principal. |
|
|
Term
|
Definition
| is an agent authorized to conduct services of transactions involving a continuity of service. Example:pam is the owner of a grocery store. Pam hires amber to manage the grocery store. Amber will hire employees, order produce and other merchandise, etc. Amber is a general agent of pam. |
|
|
Term
|
Definition
| a special agent is an agent authorized to conduct only a sinlge transaction or a series of transactions not involving a continuity of service. Example: pam is a collector of art. A vase that pam wanted ofr years has been put up for auction. Pam and Amber agree that Amber will attend the auction and purchase the vase. Amber is a special agent for Pam. |
|
|
Term
|
Definition
| sometimes an agent will appoint another to perform functions undertaken by the agent for the principal. The appointee is a subagent if the appointing agent acted with the authority of the principal in making the appointment.The apointment of a subagent involves the delegation of power by the appointing agent; thus, the subagent has two principals-the appointing agent and the principal. The appointing agent is primarily liable for the acts of the subagent, and the principal is secondary liable. But note:if a subagent is not authoried to appoint a subagent, but neverless appoints a person to perfomr a function for the principal, the appointee is not a subagent, but rather the agent's agent, and the principal is not liable for the acts of the appointee. |
|
|
Term
|
Definition
| whenever an exam question presents an agent who appoints another to do his work, be sure to check the facts to see if the principal expressly or impliedly authorized the agent to do so. Remember that an agent's appointee is not a subagent of the principal (and the principal is not liable for the appointee) unless the principal gave the agent the authority to appoint a subagent. |
|
|
Term
|
Definition
| principal hires an accounting firm to prepare its tax returns. The firm hires a CPA to prepare the forms. The firm is the agent and the CPA is the subagent. |
|
|
Term
| employer employee relationship |
|
Definition
| the key to determining whether a person is an employee or independent contractor is whether the principal has control over the person's performance. |
|
|
Term
| consent- agency relationships arise by prior agreement between the principal and the agent because they are consensual in nature. However, consent also can occur -- |
|
Definition
| after the fact by ratification, and estoppel can serve as a substitute for consent. (example:an apparent or ostensible agancy). |
|
|
Term
| respondiat superior has torts and agency has |
|
Definition
|
|
Term
| a principal has to have:for an agency relationship to exist: |
|
Definition
1. capacity-to contract (an adult, not insane or enebriated).Agent doesnt have to have this but principal does.
2. assent/consent-both principal and agent must agree, is a fidicuary relation and the agent's consent seals the deal.
3. control-is ambiguous, agent is acting on behalf of principal,principal can say general things, principal has control over when to fire him. Principal is in charge.
4. action-agent cannot act on his own behalf |
|
|
Term
|
Definition
| an oral authorization is sufficient for any purpose, except that and authority to enter a contract required by law to be in writing can only be given by an instrument in writing. |
|
|
Term
| the key agency issue is whether there is: |
|
Definition
|
|
Term
| threshold question:did principal relation exist? |
|
Definition
| p/a (CACA) + authority (what was the agent's scope of authority) = contract binding to principal |
|
|
Term
| in general the agency relationship is consensual but not necessarily contractual;therefore, not every contractual formality --- |
|
Definition
| is required for its creation. |
|
|
Term
| consent- agency relationships ordinarily arses by prior agreemeent between the principal and the agent because they are consensual in nature. However, consent also can occur after the fact by ratification, and estoppel can serve as a substitute ---- |
|
Definition
| for consent(an apparent or ostensible case). |
|
|
Term
| agency by agreement- an agency by agreement must be based on some indication by the principal to the agent that the principal consents to have the agent act on her behalf. A similar manifestation of consent by the agent to act for the --- |
|
Definition
| principal must be indicated as well. |
|
|
Term
| express vs. implied consent |
|
Definition
| the agency agreement may be express or it may be implied from the conduct of the parties (if farmer habitually leaves her crops with produce broker she has impliedly appointed produce broker as her agent for the purpose of selling the crops at the market price). |
|
|
Term
|
Definition
| an agency also may be created by ratification. This results whenever the principal accepts the benefits or otherwise affirms the conduct of one purporting to act on the principal's behalf, even though there is no agency agreement and no authority was given for the act. Ratification retroactively creates the effects of actual authority. |
|
|
Term
|
Definition
| ratification is deemed to supply the consent required for the principal agent relationship. Thus to find such consent or affirmance of the agency,there must be some objective evidence that the principal knew of the act in question. The principal will not be bound if the ratification is made without knowledge of the material facts, although knowledge may be inferred from the acts. Ratification does not apply to future acts. |
|
|
Term
| express vs. implied ratification |
|
Definition
| of course, an express approval of the transaction is the clearest evidence of consent. However, consent will also be found whenever the principal accepts the benefits of the transaction (by electing to take title to property purchased by an unauthorized agent), or otherwise obtains an advantage from the transaction with knowledge of it. |
|
|
Term
|
Definition
| a principal cannot ratify the beneficial aspects of an agent's conduct while refusing to affirm the rest. If she ratifies at all, she ratifies the entire transaction. In other words, ratification is an all or nothing proposition. |
|
|
Term
|
Definition
| ratification may also expose the principal to tort liability for the agent's misrepresentations. |
|
|
Term
|
Definition
| if the principal causes a thrid person to believe another to be her agent, and the third person so relies in dealing with the supposed agent, at least as between the principal and the third person, the court will act as if an agency existed. To recover against the principal, the third person's reliance must be reasonable and must rely on acts of the principal and not those of the agent alone. |
|
|
Term
|
Definition
| an ostensible agency (also called agency by estoppel) arises if the principal 1.intentionally or carelessly causes a third person to believe that the agent has authority or 2. upon notice, fails to take reasonable steps to notify the third person that the agent does not have authority, and 3. the third person makes a detrimental change in position (expends money or labor or incurs a loss) based on reliance on the agent's purported authority. |
|
|
Term
|
Definition
| note the distinguishing factor differentiating apparent agency from ostensible agency. In the apparent agency situation, the principal manifests that the agent has authority. In the ostensible agency situation, the principal makes no such manifestation, but instead fails to use reasonable care in preventing a third party from relying on an agent's erroneous assertion of power or fails to notify the third person that the agent has no authority. |
|
|
Term
|
Definition
| a principal must have the capacity to individually perform the act that he delegates to the agent. This usually requires contractual capacity. On the other hand, any person may ordinarily act as an agent provided she has the ability to perform the actions. Minimal mental capacity is sufficient;contractual capacity is not required. |
|
|
Term
|
Definition
| because a minor generally does not have the capacity to contract, she cannot validly appoint as her agent, except to the limited extent of contracting for her necessities of life. However, a minor can be appointed as another's agent. |
|
|
Term
|
Definition
| similarly, a person who is legally incompetent does not have the capacity to contract and cannot appoint an agent. However, it is possible that if the incompetent person is in fact capable of performing the necessary agency functions, he might be appointed as the agent of another. |
|
|
Term
|
Definition
| notice the different capacity requirements: a principal must have contractual capacity but an agent need not. Remember that whenever an exam question involves a minor or incompetent person, that person generally may be an agent but cannot be a principal. |
|
|
Term
|
Definition
| no consideration is necessary for either party to create an agency relationship. Thus a person may act as an agent without receiving any compensation or other benefit. |
|
|
Term
| effect of not having required writing |
|
Definition
| if the agent's authority is required to be evidenced by a writing, but it is not, any contract executed by the agent is unenforceable against the principal, even though the contract itself is in writing. |
|
|
Term
|
Definition
| written authority usually is not required if the agent acts mechanically, example if the agent does not have discretionary authority to enter into a contract, but ismerely authorized tosign the principal's name to a contract already made. Another example, pam negotiates a contract with x, but leaves town before the agreement has been drawn up. If pam authorizes amber to sign pam's name to the agreement, the authority is valid even though oral. |
|
|
Term
| public policy requires principal to perform |
|
Definition
| a principal cannot delegate to an agent acts that public policy requires the principal to perform personally (example-voting in a public election). |
|
|
Term
|
Definition
| similarly, performance in a personal services contract with a third person cannot be delegated to an agent (example-singer cannot delegate her duty to sing a concert to another singer). |
|
|
Term
| if your exam question involves the breach of a duty by an agent or principal, you should consider the following: |
|
Definition
| duties of agent/rights of principal: a compensated agent owes the principal the duty to perform with reasonable care. If the agent does not so perform, he may be held liable for breach of duty in both contrac and tort negligence. |
|
|
Term
| duties of agent/rights of principal |
|
Definition
| an uncompensated agent generally does not have a duty to perform, but once he preforms, he may be subject to tort liability if he improperly performs. Additionally, every agent is a fiduciary, whether or not he is compensated. As such he has a duty to 1. notify the principal of all matters that come to his knowledge affecting the subject of the agency, and 2. be loyal to the principal, which includes avoiding conflicts of interest. If an agent breaches his duties, the principal may among other things seek damages, recover the agent's ill gotten profits, and withold the agent's compensation. |
|
|
Term
| duties of principal/rights of agent |
|
Definition
| a principal also owes duties to her agent. Generally, the principal must deal with the agent fairly and in good faith and act in accordance with the terms of the agency contract. A principal has a duty of compensation to the agent and reimbursement. The principal must cooperate with agent and not prevent the agent from doing her duties. If the principal breaches these duties, the agent may seek indemnification from the principal, put a lien on his property, etc. however, the agent cannot obtain specific performance. |
|
|
Term
agent's duties to principal
-contractual duties and duties implied by law |
|
Definition
| because the agency relationship is consensual, the agent has the duty to abide by the express and implied terms stated in the agency agreement. |
|
|
Term
| the following duties are implied by law from the agency relationship and exist whether or not the principal is known or disclosed to any third party: |
|
Definition
| duty to perform-an agent has a duty to perform-which includes the duty to perform with reasonable care-and to refrain from conduct that will cause damage to the principal. An agent must act within the scope of her actual authority and has the duty to obey her principal's lawful and reasonable instructions. However, there is no duty to abide by instructions that will subject the agent to civil, criminal, or administrative liability. |
|
|
Term
|
Definition
| agent has the duty of care, competence and diligecne excercised by agents in similar circumstances to be carried out. |
|
|
Term
| effect of careless performance or non performance- |
|
Definition
| if the agent fails to perform all duties assigned to him, he is generally liable only for breach of the agency contract. However, is he performs the assigned duties, but in a careless or imperfect manner, and thereby causes loss to the principal, he may be liable for negligence (tort) as well as for breach of contract. Example:an insurance agent who fails to obtain coverage ordered by the principal and places orders for wrong insurance is liable for negligence as well as breach of the agency contract. |
|
|
Term
|
Definition
| a gratuitous or uncompensated agent owes to the principal the same duties of a compensated agent. |
|
|
Term
| exception-detrimental reliance |
|
Definition
| even though a gratuitous agent generally has no contractual duty to perform, if the principal detrimentally relies on a gratuitous agent's promise to perform, the principal may recover contract damages sustained by the agent's refusal to perform. Example amber suppose to sell stocks at 50 per share, doesnt. pam can sue her to recover contract damages. |
|
|
Term
|
Definition
| on an exam pay attention to the status of the agent. Remember that a paid agent can be subject to both contract and tort liability, whereas an unpaid agent is generally subject only to tort liability unless the principal can show that he detrimentally relied on the agent's promise. |
|
|
Term
|
Definition
| in addition to the basic duty to perform the contract and render services with reasonable care, he owes the principal a fiduciary duty as well of faithful service. |
|
|
Term
|
Definition
| what the agent's knows the principal knows, notice to the agent is imputed to the principal. |
|
|
Term
|
Definition
| an agent must be loyal on all matters connected with the agency. |
|
|
Term
|
Definition
| agent cannot unless agency has ended and action is not wrongful. |
|
|
Term
|
Definition
| after termination of his employment he can compete with principal and work for competitor, unless he has agreed otherwise. |
|
|
Term
|
Definition
| a former agent cannot use or disclose trade secrets or other confidential information obtained during his employment. |
|
|
Term
| limitation-dishonest principal |
|
Definition
| note, however, that the duty of loyalty does not obligate an agent to shield a dishonest principal. |
|
|
Term
|
Definition
| the agent's fiduciary duty likewise dictates that he may not take a position adverse to that of his principal without the principal's consent.The principal's consent does not relieve the agent of his loyalty though. |
|
|
Term
|
Definition
| an agent does not breach the duty of loyalty if he acts on behalf of an adverse party in a ministerial capacity that does not require the exercise of judgement, descretion, or skill. He does breach the duty if he has an economic interest in a party with whom the principal deals or if the principal is angaged in a transaction with a party in whom the agent has an interest (relative or close friend of the agent). |
|
|
Term
| acquiring material benefits |
|
Definition
| cannot, it is all property of the principal, because he is working on his behlaf and for his benefit not the other way around unless the principal gives consent. |
|
|
Term
| personal purchase by sales agent |
|
Definition
| an agent authorized to sell land cannot buy it himself, because he might hav obtained a better price from someone else. |
|
|
Term
|
Definition
| on discovering the agent's interest, the principal can rovoke the sale and recover the property. If the property has been resold by the agent, the principal canhold the agent liable for its value or collect and profits realized by the agent from the sale, plus damages for any harm. |
|
|
Term
|
Definition
| an agent acting for more than one principal, the buyer and seller is conflicting interest and fraud can happen. Therefore only if both parties are fully informed and consent to it can the agent collect commissions and make transaction valid. |
|
|
Term
duties owed by subagents
-authorized subagent |
|
Definition
| if the principal has authorized the agent to hire a subagent, the sub agent owes the same duties to the principal as the agent. The agent is responsible to the principal for any violation of duty by the subagent, even if the agent exercised good faith in selecting the subagent. |
|
|
Term
| duty of sub agent to agent |
|
Definition
| the subagent owes the agent who hired her the same duties as she owes to the principal, and she is liable to the agent for losses because of her improper performance. |
|
|
Term
| principal's liability to third parties for acts of subagent |
|
Definition
| a principal is liable to third parties for the acts of an authorized subagent to the same extent as if the act had been performed by the appointing agent. This is known as the principal of transparency. |
|
|
Term
|
Definition
| principal not liable, there is no agency relation |
|
|
Term
| duty of agent to principal |
|
Definition
| agent who hired subagent without principal's authority is liable. |
|
|
Term
|
Definition
| whenever you see an agent appointing someone else to perform one or more of his tasks, check to see whether the principal authorized the hiring of a subagent, because this will affect the duties and liabilities of the parties. Only an authorized subagent owes duties to the principal;an unauthorized subagent does not. Likewise, the principal is liable to third parties only for the acts of an authorized subagent. |
|
|
Term
|
Definition
| all agents whether compensated or gratuitous, may be held liable in tort for damages resulting from careless performance or breach of fiduciary duty. |
|
|
Term
|
Definition
| if malice or bad faith is established, punitive damages may also be awarded against the agent. |
|
|
Term
|
Definition
| principal can revoke sell of property if she learns the agent purchased it for himself. A principal can revoke any transaction that violates the agent's fidicuary duty. |
|
|
Term
| note-identity of principal discovered |
|
Definition
| there are exeptional situations in which third persons may refuse to proceed with the contract when the identity of the principal is fraudulently concealed. |
|
|
Term
|
Definition
| if the principal is held liable for damages to a third party because of the negligent conduct of her agent, she can sue the agent for the amount of the damages. |
|
|
Term
|
Definition
| if the agent is hired to develop inventions or patents, any and all rights belong to principal, however, if developing such an item is not a primary part of the agent's duties (example-the agent was not hired to invent or solve a particular problem )any patent or invention is the property of the agent rather than the principal. |
|
|
Term
|
Definition
| nonetheless, if the patent or invention was perfected on principal's time and with his money and materials, and is related to principal's business, the principal is deemed tohave shop right to the patent and an irrevocable right to use the idea or invention which does not terminate when the employment ends. |
|
|
Term
| proof of acquisition by inheritance, devise or bequest |
|
Definition
| under california family code section 770, property received by one spouse alone at any time by will or intestate succession is seperate property. In certain cases, however, such acquisition recieved during marriage may be shown to be onerous(acquired by labor or other community consideration). If so, the property would be a community asset.for example wife contracts with father to care for him and in return bequeath his entire estate. This is community property. Services rendered after dissolution or while living seperate is not community. |
|
|
Term
|
Definition
| even if the item at issue was acquired with cash or other property during marriage, it will be seperate property if the consideration given can be traced back to a bequest, inheritance, or other source of seperate property. |
|
|
Term
| proof of acquisition by gift to one spouse alone |
|
Definition
| a gift to a spouse is seperate propert but the donative intent must be proved in court. |
|
|
Term
|
Definition
| where a donor makes a gift to one spouse in the sense that he has no enforceable obligation to part with title, yet his motive is to show appreciation for services rendered, the asset is community property on theory it is really the fruit of a spouse's labor. |
|
|
Term
| where donative intent is unclear |
|
Definition
| where there is substantial doubt as to donative intent because the donor's motive seems to be advancement of his own inerests, the general pro-community presumption should still apply.example:where wife is given a kitchen appliance on a radio show the pro-commuity presumption is not rebutted. |
|
|
Term
|
Definition
| when deciding whether property is seperate because it was a gift, the key question is whether the transferor had donative intent. If the transferor's motivation was to give appreciation for past services rendered or to benefit herself, the property will not be considered a gift, and it probably will be community property. |
|
|
Term
|
Definition
| suppose husband's aunt intending that husband and wife co-own the diamonds as community property-delivers the diamonds to wife before the wedding that establishes the community. Ownership must be a tenancy in common because of the acquisition before marriage unless husband's aunt's delivery was conditional upon, and title would not pass until the marriage. |
|
|
Term
|
Definition
| when one spouse recieves an asset after seperation, ownership of it can be community, if it can be traced to a pre-seperation community source. |
|
|
Term
|
Definition
| although physically seperated, the intent of the spouses governs whether they are trually seperated or not. They could be living seperate for years, but have hope they will reconcile, property of this type might be deemed community. |
|
|
Term
| permanent seperation required |
|
Definition
| section 771 should not apply until at least one spouse regards a seperation as permanent. |
|
|
Term
| apportionment of income during section 771 seperation |
|
Definition
| if section 771 is triggered, and this is prior to a divorce, and husband and wife own a business together, an apportionement of income (example: a return on seperate labor aand a return on community capital) is required. |
|
|
Term
|
Definition
| one case holds that a reconciliation, means that a seperation is not permanent and hence section 771 never applied to the seperated spouses. This unsettling rule means that until a divorce is final, no third party can rely on h's or w's post seperation acquisition as being seperate property no matter how defunct the marriage appears, because reconciliation is always possible. |
|
|
Term
| establishing seperate ownership by tracing to pre-marriage source |
|
Definition
| a change of form does not change ownership, and th profits generated (without labor) are treated as part of the captial that produced them. |
|
|
Term
1.pre-marriage source-seperate
2.source unknown-presumed community
3.gift-seperate unless remunerative (example:givent to show appreciation for services rendered).
4. inheritance, bequest or devise-seperate property unless onerous (example:acquired by community labor or other community consideration). |
|
Definition
5.post seperation source (temporary seperation(neither spouse views seperation as permanent) -community.
6. permanent seperation (at least one spouse views seperation as permanent)-seperate property (unless traced to pre-seperation community source).
7. post-divorce source- seperate (unless traced to pre-seperation community source). |
|
|
Term
| commingling and uncommingling of assets |
|
Definition
| commingling refers to the mixing together of seperate and community assets, usually money. Commingling itself does not change the character of seperate property to community, but the pro-communty presumption usually makes the comingled mass presumptively community. The party seeking to establish seperate property status has the burden of uncommingling the funds into seperate and community shares. |
|
|
Term
| test for other situations-drawer's intent |
|
Definition
| the current judicial test for uncommingling where withdrawals have been made is the drawer's intent test is applied to mix. |
|
|
Term
| uncommingling where no withdrawals |
|
Definition
| uncommingling is often easy when no withdrawal has been made from the commingled mass. Where each known deposit is still present and can now be withdrawn, each can be given its intitial classification (seperate or community). |
|
|
Term
|
Definition
| where there is no direct evidence of drawer intent in withdrawing funds from a commingled account, it will be presumed that community funds were withdrawn to pay for expenses of maintaining the household. |
|
|
Term
| flexible application of doctrine |
|
Definition
| what constitutes a family expense depends on the relative wealth and customary standard of living of the family. (maid, gardener, trips abroad, etc)-are presumed to have been paid for by community funds. |
|
|
Term
| exception-spouse reimbursed of post seperation funds used |
|
Definition
| an automatic reimbursement is presumed where the funds used to pay family expenses or other community debts are seperate property under the living apart and seperate rule 771. |
|
|
Term
|
Definition
| in summary, when trying to discover whether commingled property is community or seperate, first check to see whether any withdrawals have been made from the commingled mass. If not, the intitial classification of the property that has been commingled governs. If there have been withdrawals, look to the intent of the spouse making the withdrawal to determine whether community or seperate property was withdrawn. If the spouse's intent it unknown look at the spouse's use of the property, if it is used for household purposes, then community property was withdrawn. If the property is used to make investments, courts follow one of the five following approaches: |
|
|
Term
|
Definition
when deciding which test to apply when apportioning rents or profits from seperaate capital, following these guidelines:
1. if community labor was the chief contributing factor to gain, use the formula most favorable to that estate (example:pereira where the gain is great, and van camp where the gain is small compared to similar type investments).
2. If seperate capital was the chief contributing factor to gain, likewise apply the formula most favorable to the seperaate estate- which wouldmean van camp where the gain was relatively large and pereira where the gain was relatively small.
3. If the gain is average in amount, the only apparent guideline is the mandate of beam, to choose the formual what will achieve substantial justice. The general presumption favoring community property would suggest that neither labor nor capital can be considered the chief contributing factor, the formula most favorable to the community should be used. Remember that substantial justice might be achieved by adjusting the pereira interest rate up or down from the legal interest and by compoinding the interest. Similarly some flexibility in the vaan camp formula could be obtained by calculating simple or compound interest for community earnings retained in the business. |
|
|
Term
| rents or profits from seperate capital: |
|
Definition
| rents and profits from seperately owned capital, generated without applying community labor, are 100% seperate property, due to tracing to the capital. But where labor of either spouse plays a part in generating the gain, it will be apportioned into seperate and community components by either the pereira formula or the van camp formula. |
|
|
Term
|
Definition
| the approach developed in pereira takes the value of the seperate capital and calculates an annual return on it at a particular interest rate over the period for which apportionment is sought. This gives the total seperate return, with all remaining profits being community owned (example:the seperate return is fixed and the community return floats). If profits are unusually large, the community benefits by use of the pereira formula, but if profits are small, the entire gain may be classified as seperate. |
|
|
Term
|
Definition
| the second approach toapportioning earnings places a value usually per year on the community labor given to the business. The resulting fair salary figure is the community share of the gain while all remaining earnings are seperate property. Under the van camp formula therefore the community share is fixed and the seperate share floats so that van camp is favorable to the community where the gain is small and favorable to the seperate estate where the gain is large in comparison to the amount of capital and labor involved. |
|
|
Term
methods of apportioning business profits
-h owned and managed business valued 100 k at the time he married w. marriage lasted 10 years. At the time of divorce the marriage was worth 400,000. |
|
Definition
van camp accounting:
(use if the character of the business was the primary cause of its substantial growth).
value of h's services-300,000 (30,000/yr.)
-less family expenses paid from business earnings (200,000/ yr.)
-equals community property- 100,000
-remaining 300,000 of business's value is h's seperate property. |
|
|
Term
|
Definition
(use if h's mangement was the primary cause of the business's substantial growth).
-reasonable rate of return (10%/yr.)-100,000
-plus original principal -100,000
-equals h's seperate property interest-200,00
-remaining 200,000 of business's value is community property. |
|
|
Term
| establishing seperate property share in mixed consideration cases |
|
Definition
| both the community and the seperate estate of one or both of the spouses may contribute consideration toward an item of property acquired during marriage. A pro-rata share is applied and the property is co-owned as tenancy in common (although the community portion therof is community owned) Example:during marriage h uses 2,000 of his seperate property and 3,000 in community funds to buy a painting. The painting is owned 40% by h's seperate estate and 60% by community, so that h effectively has 70% ownership and w 30%. |
|
|
Term
| purchase by installment contract |
|
Definition
| husband buys land and agrees to pay 800 a month. 5 years passes, then h marries. w and h pay for 20 years. When title to blackacre passes, a percentage of the land will be owned as h's seperate property and a percentage as community property. |
|
|
Term
| only payments toward principal apply, not to interests. Example:when paying a car off, the first years are mostly interest that is being paid. |
|
Definition
| payment on interests do not buy into the title. |
|
|
Term
| acquisition by purchase money mortgage-an overview |
|
Definition
| In the usual situation where the down payment is community and borrowed funds used to complete acquisition were one spouse's seperate property, with title taken in that spous's name, subsequent community funds used for mortgage payments will buy out the seperate property interest. |
|
|
Term
| community funds spent on improvements now buy in to title to land as well |
|
Definition
| a subsequent expenditure of community funds to improve that property can result in a buy in to title. To qualify for a buy in to title, the improvement must increase the value of the property; one court seemed to say that the community could get reimbursed if the payment did not increase the value of the property. Usually reimbursement is the common remedy not a buy in to title. |
|
|
Term
| passive increase in value of a community asset after seperation islikewise: |
|
Definition
|
|
Term
| bono overrules scores of older cases holding that reimbursement, not buy in to a share of title, was the community's remedy when it paid for an improvement to: |
|
Definition
|
|
Term
|
Definition
| when evaluating whether payments of community funds for seperately owned real property buy in to a share of title in the property, always analyze the nature of the community's payment. If the payment iss a mortgage payment, the community buys in to a share of title only if the mortgage is a purchaase money mortgage and only to the extent of the principal portion of the payment. If the payment is for an improveement to the property, the community buys in to title only if the improvement increases the value of the property. |
|
|
Term
| when getting a divorce and one spouse has paid a down payment for a house- |
|
Definition
| reimbursement not buy in to title is the remedy. |
|
|
Term
| reimbursement for improvements |
|
Definition
| imrovements made with seperate funds must be reimbursed without interest according to 2640. |
|
|
Term
| reimbursement given only for principal |
|
Definition
| reimbursement rule of 2640 only applies to the principal component of payment, not interests or taxes paid. |
|
|
Term
| waiver of right to reimbursement |
|
Definition
| section 2640 provides that a spouse may give up the right of reimbursement by a waiver made in wiritng or by a signed writing having the effect of a waiver. A deed signed by h conveying his seperate property as community as a gift is not enough to qualify as waiver. |
|
|
Term
|
Definition
| when determining whether purchase money money mortgage payments or improvements on property result in a buy in to title, it is first important ti determine the ownership of the property and payments. If community funds are used to pay the mortgage on or improve seperate property, the community generally buys in to the title in proportion to the amount of funds used to pay principal or pay for the improvement (as increase of subsequent value to the property). However, if seperate funds are used to pay the mortgage on or improve community property, no buy in occurs.Instead, if the parties are divorced the seperate estate is entitled only to reimbursement of the funds used to pay principal or to pay for the improvement; at times other than divorce, the seperate estate generally is entitled to nothing at all, unless an agreement between the parties states otherwise. |
|
|
Term
| there is no presumption of gift in the: |
|
Definition
|
|
Term
| reimbursement without interest is usually a less desirable remedy than a buy in to title, and pro-rata sharing of ownership is usually: |
|
Definition
|
|
Term
| apportionment of pension benefits |
|
Definition
| a pro-rata apportionment is used to determine the respective interests of the community and seperate estates. Inception of title is not used here. Most courts form the pro-rata fraction based on the time (ex:number of months or years) of participation in the plan while single (and seperated) as compared to the time of participation while married. |
|
|
Term
|
Definition
| apportionment is through pro-rata, where some premiums have been paid with seperate funds and some with community funds. |
|
|
Term
death benefits
-spouse healthy enough to be reinsured |
|
Definition
| older cases applying pro-rata apportionment to death benefit, based on the total of seperate and community funds used to pay premiums, are no longer followed. Instead, for an insured spouse who remains healthy enough to obtain a new policy, the death benefit coverage is treated as a series of distinct contracts. The type of funds used (seperate or community) to pay the premium for the present period of coverage controls classification of the contract and of death benefits paid if the insured spouse dies during the time period. |
|
|
Term
| establishing seperate interest in credit acquisitions |
|
Definition
| borrowed money or items purchased with borrowed money may have to be characterized as seperate or community property at various times, Example:at dissolution by death or divorce, or when a creditor levies execution. Items purchased on credit are treated as if the buyer had borrowed money from the seller and then used the money to purchase the property in question. In calif., characterization in such credit transactions turns on the state of mind of the creditor vendor in the lender. Example: did she expect to be repaid with community or seperate funds?If the lender indicates that she was relying on both sources, the loan proceeds are not apportioned. Rather, the court determines which source was primarily relied on, and this controls classification of all the proceeds. |
|
|
Term
|
Definition
| community presumption of loan proceeds during marriage can be overcome only by proof that the lender relied solely on seperate assets of one of the spouses for repayment. A primary rather than sole reliance test will be employed. |
|
|
Term
| effect of other spouse's signature on loan document |
|
Definition
| suppose h seeks a loan and the lender demands w's signature as well on the prmissory note. Since h alone could obligate the community, it may well be that the lender was looking primarily to w's seperate property (which her additional signature obligates) for repayment, and if so, the acquisition would be her seperate property. |
|
|
Term
|
Definition
| under the creditor's intent test the manner in which an unsecured loan is repaid is irrelevant in characterizing the assets at issue (although it may well have a bearing on reimbursement claims). Thus for example, if the lender relied primarily on h's seperate property for repayment, the credit acquisition will be considered seperate even if the unsecured loan is actually repaid with community funds. If proceeds of the loan were used to make a purchase and the lender took a security interest in the item so acquired, different rules apply. |
|
|
Term
| where consideration for a purchase is mixed(part seperate and part community) ownership of the property is generally apportioned between the: |
|
Definition
|
|
Term
| improvements to personal property |
|
Definition
| The improvement is absorbed into the item and no change of ownership occurs. The item is likely now more valuable, however. The remedy to the estate paying for the improvement is reimbursement,almost always without interest. |
|
|
Term
| presumption of gift rejected |
|
Definition
| there should be no broad presumption of gift in any kind of improvement cases. |
|
|
Term
| use of community funds to improve seperate property- in real property community generally buys in to title for amount spent on improvement (increases as value of property increases). |
|
Definition
| Use of community funds to improve seperate property- in personal property is reimbursement without interest (possibly limited to amount of value added if costs of improvement is greater than amount of value added). |
|
|
Term
| use of seperate funds to improve community property- for real property is reimbursement without interest if spouses are divorced. At other times, there is no recovery at all unless agreement between parties states otherwise. |
|
Definition
| use of seperate funds to improve community property in personal property is reimbursement without interest (possibly limited to amount of value added if cost of improvement is greater than amount of value added). |
|
|
Term
| presumption when source of improving funds is unkown |
|
Definition
| The one calif. case on point holds that there is no presumption at all, which apparently means that the estate seeking reimbursement must prove the nature of the funds spent. |
|
|
Term
|
Definition
| under the basic tracing principles, recovery from a tortfeasor for damage to property takes on the same character as the property damaged, for example if w's seperate property is wrecked, recovery on a judgement for this loss is also her seperate property. |
|
|
Term
|
Definition
| the starting point in classifying recovery ordered is the time when the tort ocurred, example-when the cause of action arose. |
|
|
Term
|
Definition
| when determining whether a tort recovery should be characterized as community or seperate, be sure to first categorize the tort recovery (or portions of it) as either property damages or personal injury damages, because each is treated differently. Property damages have the same character as the property damaged (example, recovery for damages to seperately owned car would be seperate property). Personal injury damages are catergorized according to the time the tort ocurred (example-recovery for pain and suffering due to injury of spouse in car wreck that ocurred during marriage would be community property). |
|
|
Term
| tort ocurring before marriage |
|
Definition
| If the recipient souse can show she owned the tort cause of action before the marriage, the presumption is dispelled by the tracing process, and the damages are also seperate property of the victim. |
|
|
Term
|
Definition
| Note however, that if a portion of the tort recovery is for lost earnings and the period of disability extends into the time when the victim was married and cohabitating, some part of this recovery for lost earnings is lofically community (since it is to replace what would have been community earnings). The same goes for medical bills. |
|
|
Term
| tort occuring during seperation when living seperate and apart at the time of the tort- |
|
Definition
| the cause of action is the seperate property of the victim. |
|
|
Term
| limited statutory right to reimbursement |
|
Definition
| provides that if the spouse of the victim has used his seperate property or community property to pay medical or other expenses generated by the accident, a right to reimbursement without interest is appropriate. |
|
|
Term
| tort occuring during marriage |
|
Definition
| if the cause of action arises during marriage and cohabitation, it (and damages received under it) is presumptively community property. Logically, at least portions of the recovery could obtain seperate classification by tracing back beyond the cause of action and the time it arose to the victim's body, something she owned before marriage and that was seperate property (example-if her leg was cut off and she got money for it, her leg was seperate property). |
|
|
Term
| tracing for personal damage recovery and classifications is only good |
|
Definition
| when getting divorced, and at no other time. |
|
|
Term
|
Definition
| as indicated, section 2603 labels all the personal injury damages on hand or yet to be recieved community property at divorce. However, it goes on to call for an award of such assets in most instances as if they were seperate rather than community property (which must be divided 50-50 at divorce). Section 2603 requires that all damages be awarded to the victim spouse, unless interests of justice require another disposition or unless the recovery has been commingled with other assets of the community. The statute provides that the inerests of justice notwithstanding, the victim spouse must be awarded at least half the funds on hand that had been paid as tort damages. |
|
|
Term
|
Definition
| if community earnings of w or h or seperate funds of the nonvictim spouse were used to pay medical expenses of the victim spouse after a tort that occured during marriage reimbursement without interest or apportionement is appropriate under the interest of justice proviso. |
|
|
Term
| where recovery is recieved after dissolution by death |
|
Definition
| the death of the nonvictim spouse converts a cause of action for the surviving spouse's personal injuries from the community property (if tort ocurred during marriage and cohabitation) to the survivor's seperate property. And the decedent's estate has a right to reimbursement for any community funds spent for medical care or lost earnings. |
|
|
Term
| death of victim does not change classification |
|
Definition
| the death of the victim spouse prior to recovery will not change characterization of any recovery her estate may obtain on a cause of action surviving death. |
|
|
Term
when did the personal injury occur
-during marriage=the pro-community presumption applies.
-at divorce=the pro-community presumption applies, but the whole recovery is given to the victim spouse unless the interests of justice require otherwise or the recovery was commingled with community assets.
-after death of a spouse= if the recovery recieved after the death of the nonvictim spouse, the recovery becoems the survivor's seperate property. If the recovery is receieved after the death of the victim spouse, the property retains its character regardless of the death. |
|
Definition
Was the recovery recieved before or during marriage?
-before marriage=the recovery is seperate property of the victim.
-during marriage= the pro-community presumption is easily rebitted by tracing back to the victim's pre-marriage ownership of the cause of action. |
|
|
Term
| when did the personal injury occur? during seperation? |
|
Definition
| The recovery is the victim's seperate property, although the nonvictim spouse or community must be reimbursed for payments for medical expenses or other related costs. |
|
|
Term
| recovery by one spouse from the other |
|
Definition
| calif. section 781 proveds that all recovery for personal injury that one spouse recieves from the other by judgement is seperate property. |
|
|
Term
| recovery for loss of consortium |
|
Definition
| each spouse has a cause of action against a tort feasor who injures the other spouse so that the couple is unable to engage in marital sex. Recovery ought to be community property, since the right invaded depends on marriage, and the damages awarded cannot be traced to any seperate property right. |
|
|
Term
| private disability contracts |
|
Definition
| are apportioned if paid with community funds |
|
|
Term
| term life insurance cases |
|
Definition
| if for 20 years is paid with community funds and the last year premium was paid with seperate funds, is considered sepertate if husband becomes disbaled. |
|
|
Term
| recovery for wrongful death |
|
Definition
| the characterization should properly depend on the nature of the claim. If husband obtains a wrongful death recovery of his son from a prior marriage, this recovery should be seperate property of h.(just because happened during marriage isnt good enough here and can rebut the during marriage presumption). |
|
|
Term
| effect of seperation or divorce |
|
Definition
| if the wrongful death of a child occurs after seperation of the spouses, damages must be proved by each parent and recovery of each is seperate property. If the death occurs during marriage but recovery is obtained after divorce the recovery should likewise be charcterized as seperate property. |
|
|
Term
| exception- statutory pension plan |
|
Definition
| under section 2610- which provides that only the legal spouse of the participant and not an ex-spouse has a right to post death benefits. In such a case, the divorce court cannot award the participant's ex-spouse a share of post death benefits. |
|
|
Term
| educational degrees and licenses to practice |
|
Definition
| not capable of community ownership, but reimbursement for community funds used to educate or train one of the spouse's so as to increase her earning capacity is appropriate. |
|
|
Term
| calculating the reimbursement amount |
|
Definition
| reimbursement must be reduced or eliminated if the community has substantially benefited from the spouse's education or training, although it is presumed that there has been no such benefit from expenditures made less than 10 years before the dicorce action is filed. |
|
|
Term
| classification of unpaid educational loans |
|
Definition
| at divorce, unpaid educational loans are classified as the seperate debt of the educated spouse except to the extent there has been substantial benefit to the community from the education (subject to the 10 year presumption above). |
|
|
Term
|
Definition
| that a court cannot order educated h to pay any reimbursement to w's estate when she dies days after he recieves his medical degree following extensive community expenditures for his medical education. Since the statute bars reimbursement to the community when the marriage ends by death, common law reimbursement for seperate property contributions to college tuition and the like probably will not be granted in the death context. |
|
|
Term
| distinguish-business goodwill |
|
Definition
| is deemed community property to the extent that it is generated by labor during marriage. Therefore it should be valued as community property and awarded to the professional spouse who developed it with an offsetting award to the other spouse. |
|
|
Term
| certain fringe benefits of employment are- |
|
Definition
| not community property-such as use of an employer's healthclub, discounts on meals at employer's cafeteria because they cannot be reduced to cash. |
|
|
Term
|
Definition
| can be community property even though employer or governement can revoke it. |
|
|
Term
| tips or gratuities or bonus's |
|
Definition
|
|
Term
|
Definition
| a future raise could be deemed community because it was earned when married. |
|
|
Term
-pensions in general-apportioned community and seperate
-stock options-aportioned
-term life insurance proceeds-trace to last premium
-seperate property insurance proceeds- seperate property(but right to reimbursement for premiums paid from community) |
|
Definition
-tort recovery against third party-community property if cause of action arose during marriage(note divorce exception)
-disability pay-community property(to extent replacing pre-seperation earnings)
-severance pay-trace to all labor performed under basic employment contract providing the benefit;if specially negotiated apply in lieu tracing at time of severance
-educational degrees-not community)but right of reimbursement under certain circumstances)
-business goodwill-community |
|
|
Term
| in general, each spouse has exclusive management of his or her seperate property. The owner-spouse may expressly or impliedly confer agency power- |
|
Definition
| on the other spouse to deal with the property. |
|
|
Term
|
Definition
| where the two spouses (or one spouse and the community) are concurrent seperate owners of the property (such as tenants in common), a seperate interest in the property can be sold only by the owner spouse. However, each co-owner has a right of enjoyment and use of the whole- and therefore a good deal of management pwer over all of the property. |
|
|
Term
|
Definition
| equal managment of all community personal property is the basic california rule. This means that either spouse without consnet of the other can sell an item of community personalty, make contracts with respect to it and the like. In this summary, management refers to the power to deal with the property in that manner; control means the pwer to prevent the other spouse from dealing by withholding a required consent. |
|
|
Term
|
Definition
| be sure to remember that equal management does not mean that each spouse has to agree with the way in which the property is run. Rather, each spouse independently has full authority to manage the property (ex:sell or lease it) without the spouse's involvement, even if the other spouse objects. |
|
|
Term
| exceptions-business managed by one spouse alone |
|
Definition
| calif. section 1100 provides that a spouse who is operating or managing a business or an interest that is all or substantially all community property has the primary management of the business or interest. This rule extends to community personalty that is part of a business also involving real property. |
|
|
Term
| primary management defined: |
|
Definition
| primary management means exclusive management with one exception: The managing spouse must advise the other spouse in writing of nay proposed sale,lease,exchange,or encumbrance of all or substantially all community personalty in the business. If a transfer is made without notice when it should have been provided, the transfer itself is valid but the nonmanager spouse has a cause of action for damages. |
|
|
Term
| Bank and savings and loan accounts |
|
Definition
| a number of statutes provide that a bank or savings and loan account in the name of a married person shall be free from the control of any other person. However, the other spouse usually can obtain a court order adding the spouse's name to the account as a co-depositor. |
|
|
Term
|
Definition
| on an exam, dont be quick to conclude that spouses have equal management of funds, deposited in a bank account, even if the funds clearly fit the definition of community property (example salary payments). If the bank account is titled in the name of one spouse only, that spouse may have complete control of the money. |
|
|
Term
| right to seize control of community assets |
|
Definition
| by practical necessity, some community rights and properties may not lend themselves to equal management, and in such cases one spouse may be able to seize control of the right or property. An employee spouse appears to have exclusive control over pension contracts. Similarly if one spouse say h-files a lawsuit in his name to recover what would be community damages, it is doubtful that a purported dismissal filed by w would have legal effect. And in situations where third parties are involved in continuing relationships with h or wife, the courts are likely to find that one spouse has seized control (example, if w hires dean to do chores, it is doubtful that dean must take orders from h or that h can fire dean). |
|
|
Term
| transactions requiring consent of both spouses |
|
Definition
| equal management does not apply to sales or encumbrances of community furniture, household furnishings, clothing of the nonacting spouse, clothing of the children, or fittings of the family dwelling. All such transactions require written consent of the nonseller spouse. |
|
|
Term
| effect of violating section 1100 |
|
Definition
| if husband sells household property without the consent required by section 1100, husband has to account and can be sued to recover. |
|
|
Term
| participation by both spouses could suffice |
|
Definition
| if both spouses deal with the buyer, written consent would notbe needed. |
|
|
Term
| determining spouse's management power over personal property |
|
Definition
| Is the property a business managed by one spouse alone? If yes, then the managing spouse has primary (exclusive) management of the business (although the managing spouse must give written notice of a proposed sale, lease, etc., of the property). |
|
|
Term
| is the property a bank account? |
|
Definition
| the spouse with title to the account has sole control of the account. |
|
|
Term
| Is one spouse selling or encumbering community furniture, household furnishings, clothing, or fittings of the family dwelling? |
|
Definition
| written consent of both spouses is required. |
|
|
Term
community real property
-general rule-equal management
|
|
Definition
| Ordinary day to day management of community realty is subject to the equal management rule. Thus, one spouse acting alone may properly cut down a tree on the community realty, license an invitee to enter upon the property and the like. |
|
|
Term
| dual management for alienation |
|
Definition
| by statute, one spouse alone lacks the power to convey, encumber, or lease for more than one year community realty, in such transactions, both spouses must join in executing any instrument of conveyance. Note that a spouse will not be permitted to avoid this rule by unilaterally conveying or encumbering a half interest in community property on the theory that it is that spouse's alone. |
|
|
Term
|
Definition
| if the community owned a leasehold interest, both h and w would have to execute an instrument of assignment or sublease for more that one year (unless the term was one year or less). Leasehold is realty under all community property statutes. |
|
|
Term
| presumption of validity where one spouse signs |
|
Definition
| if one spouse alone signs the instrument but that spouse has record title to the community real property, section 1102 presumes a valid conveyance in favor of a lessee, purchaser, or encumbrancer in good faith without knowledge of the marriage relation. Note that a good faith belief that the property is seperate is not enough if the purchaser does not also believe that the grantor or lessor is unmarried. |
|
|
Term
| did a spouse with a record title sign the instrument and convey, lease, or encumber the property to one without knowledge of the marriage relation? |
|
Definition
| If yes, the transaction probably valid despite basic rule requiring joinder. |
|
|
Term
| did one spouse orally consent to the other's conveyance, resulting in a third party's reasonable detrimental reliance on the consent? |
|
Definition
| if yes, transaction probably valid despite rule requiring joinder. |
|
|
Term
| did one spouse arbitrarily refuse consent or was the consent unable to be obtained (example:because the nonconsenting spouse was insane)? |
|
Definition
| if yes, court will dispense with joinder requirment. If no, both spouses must execute the instrument. |
|
|
Term
|
Definition
| where title property is in the name of one spouse and the other is concerned about operation of the presumption, there is a remedy in 1101, authorizing a court to order the titled spouse to change the title so that both spouses are named as owners. The add a name statute does not apply to interests of a general partner or shareholder in a professional corporation. Nor does it apply to any asset in a business subject to section 1100. |
|
|
Term
| oral consent may be sufficient |
|
Definition
| a spouse may be estopped to invoke section 1102 if he orally consents to the other spouse's conveyance and a third party acts in detrimental reliance on the consent. However, the reliance must be reasonable. |
|
|
Term
| joinder waived by the court |
|
Definition
| 1101 authorizes a court to waive joinder requirment where consent has been arbitrarilty refused or cannot be obtained because spouse is insane or has vanished, and the proposed transaction is in the best interest of the community. |
|
|
Term
| remedy agianst grantor spouse |
|
Definition
| if the signing spouse acted in bad faith in making the conveyance without joinder, the nonjoining spouse probably has a cause of action against the grantor spouse as an alternative to suing to void the transaction. Damages may be difficult to calculate, but one measure might be the increase in value enjoyed by the realty after conveyance compared to the increase realized by investment of the funds obtained from the buyer. |
|
|
Term
restrictions on management powers-gifts of property
-in general |
|
Definition
| even when an item of community property is subject to equal management genrally, calif. code section 1100, prohibits one spouse alone from giving or transferring the item for less than fair and reasonable value absent the written consent of the other spouse. The written consent rule does not apply to gifts mutually given by both spouses. However, if w asks h if she can give neecklace to her sister and h orally agrees, this is mere oral consent and does not constitute participation sufficient to eliminate the written consent requirement. |
|
|
Term
| transactions covered by restriction |
|
Definition
| section 1100 covers two types of transactions 1. a unilateral gift with donative intent, and 2. unilateral nondonative transfers without fair or lawful consideration (as where h uses community funds to pay gambling debts thatare legally unenforceable). |
|
|
Term
|
Definition
| if the nontransferor spouse sues the transferee before dissolution of the community, she can recover the full amount of the property. |
|
|
Term
| after dissolution of community |
|
Definition
| if the community has been dissolved by death or divorce, the nontransferor spouse or her estate may recover only half the property. If the transferor spouse is dead, (a promised payment would still be owed in the case of a contract to sell for unfair value). If the nontransferor were to die, her will could effectively bequeath only a half interest. |
|
|
Term
fiduciary duty of a spouse
-in general |
|
Definition
| Calif. code 1100 provides that spouses have to eachother a fiduciary relationship like that of persons in a confidential relationship (attorney client). Family code 721 states that each spouse must manage community property in the highest of good faith and that neither spouse when acting as manager shall take unfair advantage of the other. Section 721 also requires each spouse to account to the other spouse for any profit made in a transaction afffecting the community to which the other spouse had not consented. The fiduciary duties imposed by both section 1100 and 721 continue after seperation and until property is divided at divorce. |
|
|
Term
| w contibuted 200,000 to boat improvements on h's boat. W had h sign a reimbursement note saying he would pay her 250,ooo back. By statute spouses are entitled to reimbursement without interest. Her reimbursement is 200,000 not 250. W took unfair advantage of h in violation of section 721 and could: |
|
Definition
|
|
Term
| spouse deen not invest like a trustee |
|
Definition
| the fiduciary duty statutes doe not require h or w to invest community funds prudently like a trustee. A spouse also is not required to segregate community from seperate funds or keep the kind of detailed records required of a trustee. However, the spouse does have a duty to make productive community property under his sole control. And section 721 states that a spouse must account as and hold as trustee all profit or benefit from the transaction that concerns the community property that the other spouse did not consent to. |
|
|
Term
| spouses subject to duty of care |
|
Definition
| makes a spouse subject to the duties one business partner owes another. |
|
|
Term
| usurping a community opportunity |
|
Definition
| wwhere because of a community investment a spouse has an opportunity to make a further good investment, his using seperate funds to do so rather than available community funds violates the duty of good faith. |
|
|
Term
|
Definition
| under the earlier rule of exclusive male managment, h had a duty to account for community assets known to exist shortly before h and w seperated butmissing at the time of divorce. If h could not show that the assets were expended for community purposes, he was required to reimburse the community. This meant that w could collect the value of half of the missing assets from h's seperate property and h's half of the community property on hand. |
|
|
Term
| rule under equal management |
|
Definition
| undoubtedly, the duty to account recognized under male management now applies to both spouses with respect to community assets over which a spouse had obtained exclusive management power and possibly also with respect to other community assets known to be in the possession of one spouse at the time the parties seperate. By statute one spouse may at any time require the other to fully disclose all assets and debts affecting the community, or even the spouse's seperate assets and debts. The duty includes providing access to pertinent records and books. |
|
|
Term
|
Definition
| family code section 2602 provides that the divorce court, in lieu of making a 50-50 division of community and quasi community property, may invade the portion of divisible property that would have been awarded to a spouse who has deliberately misappropriated community property. The appropriate amount is awarded to the wronged spouse, and the result is an unequal division of divisible assets. |
|
|
Term
| gifts of quasi community property |
|
Definition
| if after the move to california the spouse used the quasi community property but could have used his seperate property as a gift , a misapportionament could be awarded under section 2602. (even though in common law states, quasi community property is deemed seperate property). |
|
|
Term
incompetency of one or both spouses
-equal management property |
|
Definition
| if one spouse becomes incompetent, the other sane spouse has exclusive control over community property formerly subject to equal management and apparently even over community property subject to the incompetent spouse's primary management (such as a single spouse business). If incompetent spouse gives conservator management powers, the conservator can sue the managing spouse for actions taken in bad faith to compel the managing spouse to apply funds to the support of the incompetent. |
|
|
Term
|
Definition
| if both spouses are incompetent, the conservator of each manages an undivided half interest in each community asset. |
|
|
Term
| dual management transactions |
|
Definition
| if one spouse is incompetent, a dual management transaction (example:a gift of community property) requires court approval or joinder in or consent to the transaction by the sane spouse and the incompetent's conservator. If both spouses have conservator's, each conservator must consent to or join in the transaction. |
|
|
Term
| a creditor's rights to the property of the debtor and debtor's spouse |
|
Definition
| The basic rule is that all community property and the debtor's seperate property are liable, but the seperate property of the debtor's spouse is generally not liable for the debt. |
|
|
Term
| community property liable |
|
Definition
| the general rule concerning liability for debts is that all communty property is liable for all debtss of a spouse regardless of who has management and control of the asstes at issue. Statutes then carve out a large number of exceptions to the general rule of liability. The family code provides that one spouse's quasi community property is liable in every situation in which communiity property is liable. |
|
|
Term
|
Definition
| when deciding whether a creditor can reach a spouse's community property, remember that a creditor generally can reach any community property, even if it is under the sole management or control of one spouse alone. For example, if w defaults on a loan to creditor, creditor having obtained judgment gainst w, can seize property from a bank account titled in H's name only, even though w would not be able personally to withdraw money from the account. |
|
|
Term
| seperate property generally not liable |
|
Definition
| a spouse's seperate property is liable for all of the owner's spouse's debts. Other than the general exemption statutes, there are no exceptions to this rule. Conversely, seperate property generally is not liable at all for the debts incurred by the nonowner spouse alone. |
|
|
Term
| seperate property liable for necessaries |
|
Definition
| contrary to the general rule, one spouse's seperate property is liable for a debt incurred for items called necessaries for the other spouse while they are cohabitating. If the spouses are living apart when the debt is incurred, seperate liability of the nonobligor spouse is limited to credit purchases of common necessaries defined in a statutory note as items necessary to susatin life. |
|
|
Term
| when doctrine does not apply |
|
Definition
| the necessaries doctrine does not apply when a couple has seperated pursuant to a formal agreement that does not require the spouse allegedly liable under the doctrine to support the other. The statute apparently eliminates the duty to support only where there is a written seperation agreement. |
|
|
Term
|
Definition
| if the spouses are living together so that liability under the necessaries doctrine extends to all necessaries and not just common ones, what constitutes a necessary depends on the couple's station in life. For example, for a couple used toliving like the very wealthy, servants havebeen held to be a necessary. |
|
|
Term
|
Definition
| if a necessaries creditor takes seperate property of a noncontracting spouse under the necessaries doctrine when nonexempt community or seperate property of the spouse in need was available, the spouse whose seperate property is taken has a statutory right to reimbursement. |
|
|
Term
| community earnings not liable for premarital obligations |
|
Definition
| a spouse's community earnings are not liable for any debts incurred by the other spouse before marriage. This exemption lasts only as long as the earnings are kept in a bank account from which the other spouse has no right of withdrawal and into which no nonexempt community funds are commingled. |
|
|
Term
| child support and alimony |
|
Definition
| child support and alimony obligations from a prior marriage are viewed as premarital debts, regardless of when a judgement for enforcement is rendered. Thus, the nonobligor spouse's community earnings are notliable. |
|
|
Term
| pecking order of liability for torts |
|
Definition
| the general rule that all community property plus all of a debtor spouse's seperate property is liable for the debtor spouse's debts also applies to tort liabilities. However, california family code section 1000 creates a pecking order of liability in this area that turns on whether a community or seperate tort is involved. But note that to the extent a spouse's tort liability is satisfied by liability insurance proceeds, the pecking order statute does not apply. |
|
|
Term
|
Definition
| if liability is based on an act or omission which occurred while the married person was performing an activity for the benefit of the community, liability shall be satisfied first from the community property and then from the tortfeasor's seperate property. |
|
|
Term
| broad scope of torts for the benefit of the community |
|
Definition
| states where community property has long been liable only for community torts hold that a spouse's recreational activity during marriage (with or without the other spouse) is an activity for the benefit of the community. Example: h negligently crashed airplane while taking flying lessons. |
|
|
Term
|
Definition
| if liability is not based on an act or omission involving an activity for the benefit of the community, the tortfeasor's seperate property is primarily liable and community property secondarily liable under 1000 section. The nontortfeasor spouse, given notice by the creditor, apparently has the burden of preventing a levy on community property by identifying seperate property of the tortfeasor subject to execution. |
|
|
Term
|
Definition
| if community funds are used to pay for a seperate tort, reimbursement under this section may be asserted more than seven years after the spouse claiming reimbursement learns how the tort debt was paid. |
|
|
Term
| spouses as joint tortfeasors |
|
Definition
| if both spouses incur tort liability in an activity not benefiting the community (example: they both attack someone who is obtaining judgement against them), section 1000 should not force the creditor to levy on seperate property. The community property is equally owned by the spouses and is therefore an appropriate source for paying a debt on which both are equally liable. |
|
|
Term
|
Definition
| torts in which liability is based on an act or omission involving an activity benefiting the community.Example: h is sued for personal injury occuring when h caused a car wreck while driving to work. Community property is primarily liable and seperate property is secondarily liable. |
|
|
Term
|
Definition
| torts in which liability is not based on an act or omission involving an activity benefiting the community. Example:h is sued for beating up a stranger he encountered on the street who cursed h. Community property is secondarily liable and seperate property is primarily liable. |
|
|
Term
| tort liability of one spouse to other |
|
Definition
| calif. family code section 782 provides that in the case of injury to a married person, where one spouse isliable to the other in tort, community funds may not be used to pay the liability until the tortfeasor's seperate property is exhausted. The same pecking order rule also applies to any sums that the tortfeasor spouse may owe by way of contribution to a joint tortfeasor who has paid the victim spouse more than his share of liability. |
|
|
Term
| payment with community funds |
|
Definition
| after the tortfeasor's seperate property is exhausted, the victim spouse can reach community property (which then becomes the victim's seperate property). Since the victim spouse already owns half of the community property, the recovery from such property would logically be two for one (so thatthe tortfeasor's share is the sole payor). example: if the remaining liability is 500$, 1,000$ in community assets would be required to satisfy it. |
|
|
Term
effect of seperation or divorce on liability for debts
-seperation |
|
Definition
| the fact that spouses begin living seperate and apart will have no effect on debtor-creditor relations except that the post seperation earningss of each spouse are seperate rather than community. This could come as an unpleasant surprise to a pre-seperation creditor fo one spouse who was relying on earnings of the other spouse as a source of repayment, but that risk is assumed by any creditor who fails to make both spouses contractual obligors. |
|
|
Term
| effect of future obligations |
|
Definition
| since the rights of a contract creditor do not depend on whether the debt is community or seperate, seperation of the spouses has no effect on post seperation creditors other than to convert post-seperation earnings into seperate property. Post seperation torts are likely to be seperate torts, so that the tort creditor canbe compelled tolevy first on the tortfeasor's seperate property. However, a seperation that makes subsequent earnings seperate under calif. family code section 771 does not alter the nature of community property already acquired; and a seperated spouse could still commit a community tort-example:while maintaining pre-seperation community real estate. Tort liability incurred in operating a community business after seperation should be considered at least partly community for pecking order purposes, since the reverse pereira van camp formulas make part of the earnings of the business after seperation community property. |
|
|
Term
| debt assigned by court to obligor spouse |
|
Definition
| if the divorcing spouse who incurred a debt is ordered by the court to pay it (the usual remedy), community property awarded the other spouse can no longer be reached by the creditor (calif. family code 916). The same is true of a seperate debt of the obligor spouse that could have been assigned only to her. |
|
|
Term
|
Definition
| at divorce there is a winding up of the community partnership much like that of a 50-50 business partnership. There are numerous rules of law for you to keep in mind, as you apply these rules to the facts of your question, remember that the purpose of the rules is to assure that a division of property is truly equal. Another important policy at work is the clean break, which favors an item by item division of the property so that the divorcing spouses do not remain co-owners. |
|
|
Term
|
Definition
| exam questions involving a death should alert you to consider the position of third parties. |
|
|
Term
division of property as divorce
-seperate property |
|
Definition
| calif. courts cannot award any portion of a spouse's solely owned seperate property to the other spouse. |
|
|
Term
|
Definition
| the general rule is that community property must be divided equally at divorce (family code 2550). However, the item theory of community ownership, applicable where the community is dissolved by death does not apply at dissolution by divorce. Accordingly, a spouse is merely entitled to recieve community assets with a value equal to half the community estate and has no right to a half interest in any particular asset. This is referred to as the aggregate theory of community ownership. |
|
|
Term
|
Definition
| when deciding how property should be divided after the termination of a marriage, be sure to determine the reason for the termination. If the marriage has been terminated due to the death of a spouse, community property will be divided according to the item theory of ownership, in which each piece of community property is divided in half and the surviving spouse owns the proerty as a tenant in common with the decedent's estate. However, if the marriage is terminated by divorce, the aggregate theory of property division will be used, and each spouse generally will recieve different community assets valued at half the value of the community estate. |
|
|
Term
| co-ownership of community pension inerests |
|
Definition
| where valuation is too dificult (or where the court prefers an alternative approach), each spouse can be awarded a fractional interest of future benefits if and when receieved. |
|
|
Term
| diminishing community fraction of benefits |
|
Definition
if the participant spouse continues on the job after divorse, this subsequent labor is atken into account in determining the seperate and fromer community interests. The formula for calculating the interest of the non-participant spouse (say w) on a time apportionment would be:
wife recieves half of all months h was on job all together(x) divided by months h was on job while married to w (y). w recieves 1/2 x x
----------
x + y |
|
|
Term
| result where participant does not retire at maturity |
|
Definition
| suppose h reaches the age at which he could retire and begin recieving benefits, but instead he elects to stay on the job. It is now settled thathe can be compelled to begin making payments to the ex wife under the decree recognizing her as owning a fractional interest of future retirement benefits. |
|
|
Term
|
Definition
| divorce courts may order an equalizing promissory note only when a true equal division would impair the value of community assets.(example: one asset alone is worth more than the entire estate, whoever posseses that asset at divorce could have to give other spouse difference in a promissory note). |
|
|
Term
| equalizing by assignment of debts |
|
Definition
| what must be equal in the division of property at divorce is the net value recieved by the spouses after deducting community debts that the spouses are ordered to pay. Assignment of debts to one spouse or the other can therefore equalize the aggregate division between the parties. |
|
|
Term
|
Definition
| if one spouse recieves community assets worth more than the other under the aggregate theory, the court can equalize the distribution by ordering the spouse receiving greater value to issue a promissory note covering the difference or assigning more of the community debt to the spouse recieving greater property value. |
|
|
Term
| where debt exceeds assets |
|
Definition
| calif. family code section 2622 provides that to the extent that community debts exceed total community and quasi communiity assets, the excess of debt shall be assigned as the court deems just and equitable, taking into account such factors as the parties relative ability to pay. |
|
|
Term
| effect of one spouse's bankruptcy |
|
Definition
| if one spouse say h has obtained a discharge in bankruptcy of certain community debts, the divorce court obviously cannot assign the debts to h but must assign them to w. By force of federal law, they must be treated as w's seperate debts and not taken into account in determining whether her net share of community property after division at divorce is equal to h's. |
|
|
Term
| classifying debts as seperate or community |
|
Definition
| at divorce each spouse is liable for his or her own seperate debts, and such debts are not considered when dividing community property. Calif. family code section 2627 provides that the benefit test of section 1000 is used to classify tort debts owed by h or w. Sections 2621-2625 provide that nontort debts are classified according to the following rules: 1. debts incurred before marriage by one spouse are the seperate debts of that spouse 2. debts incurred during seperation and before divorce are the seperate debt of the incurring spouse except that those incurred for the common necessaries of life for either spouse or the minor children of the marriage are community and 3. debts incurred during marriage but before seperation are characterized as seperate or community based on whether they were incurred for the benefit of the community. (2625). |
|
|
Term
|
Definition
| by statute, an educational loan is presumptively a seperate debt of the spouse so educated. However, a portion or even all of the amount of the loan unpaid at divorce may be classified as community debt on the basis of finding of community benefit from the education (a large community income). (family code section 2641). The presumption is against such benefit to the extent that the loan proceeds were expended for education less than 10 years before the divorce action was filed and in favor of the community benefit if expanded more than 10 years before filing. |
|
|
Term
| valueing assets and debts |
|
Definition
| community assets are assessed at market value rather than face value (same goes for promissory notes). |
|
|
Term
| time of valuing asssets-general rule |
|
Definition
| the basic rule is that community assets are to be valued for purposes of making the equal division, at the time of trial (family code section 2552). |
|
|
Term
|
Definition
| if the net value of the community and quasi community assets is less than 5,000 and the defendant cannot be located despite diligent effort, the divorce court may award up to all of the property to the plaintiff. |
|
|
Term
| treatment of out of state land |
|
Definition
| a divorce court is encouraged to divide property so as not to disturb any interests in out of state realty (family code 2660). The divorce court may 1. order the titled spouse to convey an interest in the out of state land as is necessary to make an equal division or 2. award the non-titled spouse a money judgement equal to the value of her divisible share. |
|
|
Term
| adjustment for monies owned one spouse by the other |
|
Definition
| although section 2552 calls for an equal division of community property in most instances, the divorce court has the power to order one spouse topay the other sums owned on reimbursement claims. The court may effectuate the payment of such claims by ordering an unequal division of the community. Moreover, since reimbursement claims are really creditor claims, the divorce court can hold the debtor spouse's seperate property liable and award appropriate portions thereof to the claimant. |
|
|
Term
| types of offsets permitted |
|
Definition
| a claimant spouse, say w, may press claims at divorce for half of the community's right to reimbursement for improvements made to h's seperate personal property with community funds, for gifts of community property not consented to in writing by w, or for h's failure to account formissing property under his exclusive management. The divorce court can also award damages or make offsets for violation by a spouse of the good faith standard of calif. family code sections 721 and 1100. |
|
|
Term
| reimbursement for payment of seperate debts |
|
Definition
| a spouse can also obtain reimbursement (apparently without interest) of half of the community's right to reimbursement for payments of seperate debts by the other spouse with community funds. For purpose of reimbursement, a debt can be partly community and partly seperate, so that only a portion of the community funds paid need be reimbursed. |
|
|
Term
| treatment of nondisctribuatable community assets |
|
Definition
| some community assets are not subject to disctribution, in that they can be owned by only one spouse (example:community owned good will of w's sole business). Likewise, federal law prohibits awarding any community interest in national service life insurance to the spouse of the insured. In these situations, the divorce court must value the community interest in the asset, order it distributed to one spouse, and award the other spouse community assets of equal value or if necessary a promissory note. |
|
|
Term
| effect of failure to distribute asset or assign debt |
|
Definition
| The divorcing spouses may agree in their own property settlement on how community assets will be distributed. If neither a spousal agreement nor a divorce court judgement deals with a particular item of community property, the effect of an entry of divorce is to convert it into tenancy in common property. |
|
|
Term
| effect of divorce on debts |
|
Definition
| if any community debts are not assigned by contract or decree to a particular spouse, each is apparently ultimately responsible for payment of one half thereof. If this were not the case, equal division of the community would not occur. Thus when either former spouse voluntarily or involuntarily pays such a community creditor, a right of reimbursement arises as to half the sum taken by the creditor. |
|
|
Term
| community property aand debts are divided at divorce accroding to: |
|
Definition
| agreement of spouses- if none, according to--division by the court (generally using aggregate theory)---if none then, each spouse holds community property as a tenant in common, and each spouse is responsible for one half of the debt (if a spouse pays more than half than she is entitled to a reimbursement from the other spouse). |
|
|
Term
devolution of property at death
-seperate property |
|
Definition
| a decedent spouse may by will dispose of her seperate estate (excluding quasi community property) as desired, subject to liability to creditors and to statutorty protections for the surviving spouse (like family allowances). At least one third of the seperate property passing intestate goes to the surviving spouse. |
|
|
Term
|
Definition
| watch for situations where a decedent spouse's will leaves property belonging to the surviving spouse to others. If this occurs, the surviving spouse has two choices: 1. she can either takee all that was bequeathed to her under the will and allow the transfer of her property to occur, or 2. She can elect against the will and take only her portion of the decedent's spouse's property under the item theory of distribution (example: an undivided hald interest in every item of community property). |
|
|
Term
| declarations of seperate ownership |
|
Definition
| if a will states directly or indirectly that an asset that is actually community is the decedent's seperate property and disposes of it, the surviving spouse is required to make an election. |
|
|
Term
|
Definition
| by her actions to accept the will, or by filing a formal document with the probate court either electing to take under the will or renouncing its gifts and asserting ownership of property the will attempts to dispose of. |
|
|
Term
| restrictions on interest of surviving spouse |
|
Definition
| as noted, the decedent spouse may not give to a third party any community property interest of the surviving spouse (unless the survivor elects to permit this result). Similarly the decedent may not by any type of instrument or transaction restrict the management power the survivor has over half of the community property after dissolution by death, unless the instrument or transaction has a substantial inter vivos purpose. |
|
|
Term
|
Definition
| all assets owned by a surviving spouse are of course his seperate property, but the pre-death characterization of such property may significantly affect succession when the survivor dies intestate. Special provisions in calif. probate code section 6402.5 (referred to as the ancestrial property rules) provide that former in laws of the surviving spouse may be entitled to inherit certain property in the survivor's estate (the property is returned to the predeaced spouse's family line. |
|
|
Term
| note that for purposes of section 6402.5 quasi community property is treated as: |
|
Definition
|
|
Term
| property required to be administered |
|
Definition
| property of a decedent passing to someone other than her spouse is subject to administrationin a probate court proceeding. |
|
|
Term
|
Definition
| forty days after the death of one spouse, the surviving spouse (or her guardian, conservator, or personal representative) obtains full power to sell, lease, mortgage, or otherwise deal with and dispose of community and quasi community realty subject to administration unless notice of a cliam is filed by a devisee under the decedent's will. These managment rights may be exercised by the survivor without regard to the form of title to the community realty. (even if it was held in decedent's name). The effect of the devisee's filing notice of a claim of interest is that the surviving spouse does not get the management power provided for by the 40 day statute. |
|
|
Term
| liability for debts at dissolution by death |
|
Definition
| unlike the situation at divorce, dissolution of the community by death does not absent failure of a creditor to assert his rights-releive any community property from liability for a debt imposed on it prior to the death. |
|
|
Term
| offsets and defenses to survivor |
|
Definition
| a surviving spouse personally liable for a decedent's debts may raise the same offsets and defenses that the decedent could have asserted against the creditor if he was living. |
|
|
Term
nature and formation of partnership
A. governing law
1. in general |
|
Definition
| most states rely on the uniform partnership act or the revised uniform partnership act as a basis for partnership law. Because the majority of states have adopted the RUPA, this summary is based on the RUPA, but the UPA provisions will be noted where they differ sunbstantially from the RUPA. |
|
|
Term
|
Definition
| The RUPA controls unless the partners have agreed otherwise. The RUPA however, limits partners ability to agree to certain key terms (to eliminate the duties of loyalty and good faith). |
|
|
Term
| relationship to agency law |
|
Definition
| partnership law is similar to agency law in many respects (example: a partner is an agent of her co-partners for certain purposes , imputing of acts, ets. |
|
|
Term
basic nature of partnership
-defined |
|
Definition
| a partnership is an association of two or more persons to carry on as co-owners a business for profit. The parties need not intend to form a business entity called a partnership:they need only intend 1. to form a for-profit business and 2. to own the business together. |
|
|
Term
|
Definition
| partners are co-owners of the business, while agents have no onership interests in the business. |
|
|
Term
| distinguish-joint venture |
|
Definition
| although members of a joint venture share profits and losses, it is ordinarily formed for a single transaction, whereas a partnership usually engages in a continuing business for an indefinite or fixed period of time. Although it is sometimes difficult to distinguish a joint venture from a partnership, the provisions of the RUPA are often applied to a joint venture. |
|
|
Term
| aggregate characteristics |
|
Definition
| partners are jointly and severally liable of partnership obligations, regardless of whether the partnership can be sued in its own name. Under the RUPA, partners are not co-owners of partnership property. The UPA provides that partners are co-owners, but individual partners cannot transfer or encumber specific partnership property. |
|
|
Term
|
Definition
| a partnership's income or losses are attributed to the individual partners because the partnership is not a tawxpaying entity, however, the partnership is a tax paying entity. |
|
|
Term
entity characteristics
-capacity to sue or be sued |
|
Definition
| The RUPA permits a partnership to sue or be sued in the name of the partnership. The UPA, however, does not address this matter, and under the UPA, a few states allow a partnership to be sued as an entity but prohibit a partnership from bringing suit in the partnership name. |
|
|
Term
|
Definition
| in federal courts, a partnership can sue or be sued in the partnership name if a federal question is involved. In diversity cases, the relevant state's law determines the capacity of the partnership to sue or be sued in its own name, and the citizenship of all partners is considered. |
|
|
Term
| effect of judgement against partnership only |
|
Definition
| a judgment against the partnership is not a judgment against any partner. Therefore, the judgement may not be satisfied from a partner's personal asset's unless there is a judgment against the partner. It is thus a good practice to join all parner's individually. |
|
|
Term
| bankruptcy of partnership vs. partners individually |
|
Definition
| destruction of a partnership as a bankrupt does not operate to declare the partners bankrupt. Nor does the bankruptcy of a partner extend to the partnership or its assets. |
|
|
Term
| capacity to convey property |
|
Definition
| a partnership can hold and convey title to real or personal property without all partners joining in the conveyance. |
|
|
Term
|
Definition
| a partnership, as a voluntary association, must generally be based on an agreement of the partners, thus making a contract (express or implied) essential. |
|
|
Term
|
Definition
| a written agreement is usually not required. A writing is required if the partnership agreement provides that it must continue for more than one year (statute of frauds) or for an agreement authorizing partners to deal in real property in order to bind third persons. |
|
|
Term
| capacity to become a partner |
|
Definition
| any person having capacity to contract to become a partner. A partnership agreement with a minor is thus voidable because a minor does not have the capacity to contract. The RUPA includes partnerships and corporations within the definition of a person who may become a partner. Other entities such as limited partnerships, limited liability partnerships, and limited liability companies, are aslo considered persons. |
|
|
Term
|
Definition
| a person may become a partner only with consent of all the partners. |
|
|
Term
| rules for determining existence of partnership |
|
Definition
| in determining whether parties intend to form as co-owners a business for profit, courts examine the intent of the parties by considering certain factors. A partnership is not established merely by joint ownership of property, contribution of capital, or the sharing of gross income. On the other hand, the RUPA states that the sharing of profits raises a presumption of partnership (unless they were received as payment for debts, rent wages, or retirement benefits, etc.). Similarily, under the UPA, sharing of profits is prima facie evidence of a partnership. The legal effect of a presumption is the same as that of prima facia evidence. |
|
|
Term
|
Definition
| a sharing of profits indicates a partnership only when no other business reason exists for the sharing (presumption of partnership will arise if the sharing is as rent or salary). |
|
|
Term
|
Definition
| the parties designation of their relationship as a partnership is not conclusive. Note that partnership liability cannot be avoided even by an express negation of the relationship if the evidence establishes the essential elements of a partnership. |
|
|
Term
partnership by estoppel
-in general |
|
Definition
| although a true partnership depends on a contract, parties who are not partners may be bound as if they were partners in dealings with third persons. |
|
|
Term
| liability of purported partner |
|
Definition
| a person who represents herself to be a partner in an actual or apparent partnership or consents to a representation that she is a partner is liable to any third person to whom the representation is made who extends credit in good faith reliance on the representation. There is generally no duty to deny partner status when, wihout consent, one is held out by another as a partner. |
|
|
Term
| extent of liability-holding out language |
|
Definition
| pursuant to the RUPA, a person who relies on a representation of partnership made in a public manner can hold the purported partner liable even if the purported partner is not aware of being held out as a partner to the person. The UPA rule is the same as the RUPA rule: when a person represents himself as a partner or consents to another so representing him, he is liable to any person to whom the representation was made, and if the representation was made in a public manner, he is liable to any person giving credit regardless of whether he was aware that the representation had been made to that person. |
|
|
Term
| liability of partners who represent a third person to be a partner |
|
Definition
| an actual partner who represents a nonpartner to be a partner constitutes that person as her agent with the power to bind her. however, any resultant liability binds only those partners who made or consented to the representative. |
|
|
Term
relations between partners
-fiduciary duty |
|
Definition
| a partner owes to the partnership and the other partners the fiduciary duties in good faith and with fair dealing. |
|
|
Term
|
Definition
| the duty of loyalty requires a partner to 1. account to the partnership and hold as a trustee for it any property, profit, or benefit derived by him in conducting or winding up partnership business, or in using partnership property 2. refrain from dealing with the partnership on behalf of an adverse party and 3. not compete with the partnership before dissolution. |
|
|
Term
|
Definition
| partners must refrian from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law in the conduct or winding up of partnership business. |
|
|
Term
|
Definition
| a partner who purchases or holds partnership assets in his own name does so as trustee for the partnership. |
|
|
Term
| transacting business with partnership |
|
Definition
| a partner may make loans to or transact other business with the partnership. Fiduciary duties are not violated merely because a partner's actions further his own interest. |
|
|
Term
| other rights and duties of partners to each other |
|
Definition
| absent provisions to the contrary in the partnership agreement, the law imposes the following rights and duties:management, books and records;information, profits and losses, distributions from partnership. |
|
|
Term
|
Definition
| each partner has equal rights in the management and conduct of partnership business. A majority vote of the partners is required to settle differences arising as to a matter in the ordinary course of business. For acts outside the ordinary course of the business and for amendments to the partnership agreement, a unanimous vote of the partners is required. By agreement, one person may be authorized to act as managing partner, and as such must deal fairly on behalf of all partners. |
|
|
Term
| books and records;information |
|
Definition
| each partner is entitled to access to the partnership books and records and may inspect and copy any of them. Such books and records must be kept at the partnership's chief executive office. Partner's must be given without demand, information necessary for the exercise of the partners' rights and duties. Under the UPA, partners are not obliged to provide info. regarding partnership business unless a demand is made for such info. A deceased partner's personal representative has the same rights as the deceased partner would have had. |
|
|
Term
|
Definition
| partnership profits and losses are shared according to the partnership agreement. Absent an agreement, partners share profits equally and losses according to profits. |
|
|
Term
| distribution from partnership |
|
Definition
| a partner is entitled to 1. the return of his capital and contribution upon dissolution 2. reimbursement for reasonable expenses and personal liabilities incurred while conducting partnership business and for advances beyond his agreed upon contribution and 3. remuneration for winding up the business. Generally, a partner has no right to remuneration for work performed on behalf of the partnership absent an agreement by the partners. |
|
|
Term
|
Definition
| under the RUPA- the rupa specifically allows actions against other partners for either legal or equitable relief to enforce 1. a right under the partnership agreement 2. a right relating to sharing profits, participation in management, indemnification, etc. 3. rights relating to dissociation or dissolution and winding up of the business or 5. any other right of the partner. |
|
|
Term
moore marsden calculation
-Seperate property |
|
Definition
seperate apportionment
loan amount-com.prop.contribution
-------------------------------------
purchase price
X
gain
+
sep.prop.contribution
(down payment) |
|
|
Term
Moores marsden calculation
Community property |
|
Definition
Com. Prop. Apportionment
Principal payments
------------------------
purchase price
X
gain
=com. prop. contribution |
|
|
Term
|
Definition
| if wife puts a down payment of 20,000 on house and then they divorce and sell the house and only get 15,000 equity-wife gets all of the 15,000 because her dp is caudified. |
|
|
Term
|
Definition
| when seperate property is used to improve community property, it depends on the date of when it happened. If it was before 1984 it is a gift. |
|
|
Term
| anti deficiency legislation |
|
Definition
| california protects purchase money loans(your original loan money you used to purchase the home). |
|
|
Term
|
Definition
| where community funds are used to purchase, the community gets an interest in the ratio according to this approach. There are now three approaches:lucas, moore, and frick. |
|
|
Term
|
Definition
| the lender has to rely solely on the seperate property for the courts to rule it was seperate property. If loans are in any way made on a reliance of community credit it is community. |
|
|
Term
| chartrand v. barney's inc. |
|
Definition
| corporation cannot ratify contracts before they are born. They can adopt and novation, but these do not time travel like ratification does. Since the principal did not exist, there can be no ratification since there was no way to approve of the act done. |
|
|
Term
| inherent protects who's expectation? |
|
Definition
|
|
Term
| the implied protects who's expectations? |
|
Definition
|
|
Term
| in order to get apparent authority one must: |
|
Definition
| be able to trace the authority back to something the principal did. |
|
|
Term
| in order for a principal to be liable the third person: |
|
Definition
| has to reasonably think the agent had authority. |
|
|
Term
|
Definition
| negligence belief in holding out that the agent had authority and detrimental reliance by thir party that agent had authority. |
|
|
Term
|
Definition
| property that you acquire when you are outside california. Example: if h and w buy property is nevada, then move to california and divorce, it is determined by california. |
|
|
Term
| couple lives in ohio and acquire property with community funds. They then move to calif. and h dies. H leaves eveything to daughter. |
|
Definition
| California will only acknowledge half to his daughter and the other half goes to wife. |
|
|
Term
| california law only applies to quasi community property when it comes to: |
|
Definition
|
|
Term
|
Definition
| is a marriage like relationship and they both know there is no lawful marriage. |
|
|
Term
principal/agent relationship
(use CACA)
consent, assent, control, action |
|
Definition
| then find authority= principal bound to contract |
|
|
Term
| both parties have to move to california for quasi community property to: |
|
Definition
|
|
Term
|
Definition
| law can apply retroactively in order to remedy an unconstitutional law. |
|
|
Term
| purchase was before 1984 it is a gift, after it is: |
|
Definition
|
|
Term
|
Definition
| 1. the business has invited the public to use the telephone to transact business with it 2. the business has permitted an employee to answer the phone 3. such person has purported to act for the business with authority 4. the person caling the place of business had a right to assume that the person permitted to answer the phone had authority to act. |
|
|
Term
|
Definition
| the one asserting that something exist has the burden of proof to prove that it does. |
|
|
Term
| if commingling occurs but there is an adequate: |
|
Definition
| record, tracing can make it seperate. |
|
|
Term
|
Definition
| strictly construed on what they can and cannot do. |
|
|
Term
|
Definition
| beneficiary takes all/spousal rights do not apply because it is federally pre-empted. |
|
|
Term
| the person ratifying the act must have crate: |
|
Definition
| capacity,relevant facts must be known to principal, timely (has to be available), and it must be ratified entirely (the whole thing). For ratiffication to occur all of these must be checked off. Ratifiaction creates actual authority and a relationship. It can travel back in time. |
|
|
Term
| when funds are commingled and withdrawns are made what is the rule? |
|
Definition
| drawer' intent, family expense doctrine, benefit of community. |
|
|
Term
|
Definition
| when an employer matches the money you put into your retirement if you work for a number of years. |
|
|
Term
|
Definition
| you can sue both principal and agent until one rejects and can only get one recovery. |
|
|
Term
|
Definition
| meaning has to pick which one he's going to sue. |
|
|
Term
|
Definition
| 3rd party must elect who to sue. |
|
|
Term
|
Definition
| the liability of agent and principal is not discharged until hit amount sueing for. Can collect from both until satisfy. |
|
|
Term
| agents have unlimited authority |
|
Definition
| if agent goes to pawn shop and instead of buying jewelry buys nuts. The principal cannot rescind the contract but can recover damages from agent or sue for breach of fiduciary duty. |
|
|
Term
| nonvested community property |
|
Definition
# of years worked during marriage
-------------------------------
# of years employed
sp=1/2
cp=1/2 |
|
|
Term
gilmore motion
retirement
time rule for apportionment |
|
Definition
# of years employed while married
(dom-dos)
--------------------------------- = cp
# of years employed |
|
|
Term
|
Definition
| when a promotor signs a contract to a creditor as a representative for a corporation that does not exist, promotor is liable for debt. |
|
|
Term
| if an agent has no authority from the principal what can the agent be sued for? |
|
Definition
| not breach of contract but breach of warranty of authority and for deceit (fraud of misrepresentation). |
|
|
Term
| lubbock feedlots vs. beef processors |
|
Definition
| he acted primarily for the benefit of the beef processors, not for himself, therefore he is an agent. |
|
|
Term
| what can a principal sue his agent for if that agent does something against the principal's instruction? |
|
Definition
| he can sue agent for breach of duty and contract. |
|
|
Term
| the correct way to sign a contract as an agent is? |
|
Definition
| peter pringle by arther adams agent |
|
|
Term
| can hold an agent responsible as principal if agent? |
|
Definition
1. when with his consent, credit is given to him personally in the transaction.
2. when he enters into a written contract in the name of his principal, without believing in good faith that he has authority to do so.
3. when his acts are wrongful in their nature. |
|
|
Term
|
Definition
| no lawyer shall enter into a business transaction with a client unless:1. the terms are fair and reasonable to the client and are fully disclosed to him in writing. 2. the client is given a chance to seek independent counsel in the transaction. 3. the client consents in writing. |
|
|
Term
| in this situation principal was disclosed but was for a unicorporated association, therefore |
|
Definition
| the principal here has no capacity because there is no legal existence and the agent is bound by the contract to pay. |
|
|
Term
| if agent makes false representations about what he purports to sell for the principal, the 3rd party can: |
|
Definition
|
|
Term
| if principal is selling a house and doesnt tell 3rd party there is roof damages. And then has 3rd party sign a contract, the principal cannot: |
|
Definition
| hide behind the contract because he has a positive duty to make representations of the house accurately. |
|
|
Term
| CIA agent published a book, but he had a fidiciary duty that he breached and therefore: |
|
Definition
| all profits from book go to CIA as a contstructive trust. It doesnt matter if CIA was harmed or not by book, thats not the point. He still breached his duty. |
|
|
Term
| If your an agent and an agent with knowledge, a agent cannot use the knowledge he has against the principal and: |
|
Definition
| agent cannot warn their principal that they are going to take advantage of them. |
|
|
Term
| if p tells a to buy a projector for 5,000. A then gets one for 4. If a doesnt give p 1,000 change, he has breached fiduciary duty. |
|
Definition
breach: a failure to disclose a conflict of interest.
-a breach of loyalty is a breach of contract.
-a fiduciary duty is like a good dog, cannot compete and must act with authority. |
|
|
Term
| general fiduciary principle |
|
Definition
| an agent has a fiduciary duty to act loyally for the principal's benefit in all matters connected with the agency relationship. |
|
|
Term
| material benefits arissing out of position |
|
Definition
| an agent has a duty not to acquire a material benefit from a 3rd party in connection with transactions conducted or other actions taken on behalf of the principal or otherwise through the agent's use of the agent's position. |
|
|
Term
| acting as or on behalf of an adverse party |
|
Definition
| an agent has a duty not to deal with the principal as on behalf of an adverse party in a transaction connected with the agency relationship. |
|
|
Term
|
Definition
| throughout the duration of an agency relationship, an agent has a duty to refrain from competing with the principal and from taking action on behalf of or otherwise assisting the principal's competitors. During that time, an agent may take action, not otherwise wrongful, to prepare for competition following termination of the agency relationship. |
|
|
Term
| use of principal's property; use of confidentail information |
|
Definition
an agent has a duty
1. not to use property of the principal for the agent's own purposes or those of a thrid party; and
2. not to use or communicate confidential information of the principal for the agent's own purposes or those of a third party. |
|
|
Term
|
Definition
| an agent has a duty to act in accordance with the express and implied terms of any contract between the agent and th principal. |
|
|
Term
| duties of care, competence, and diligence |
|
Definition
| subject to any agreement with the principal, an agent has a duty to the principal to act with the care, competence, and diligence normally exercised by agents in similar circumstances. Special skills or knowledge possessed by an agent are circumstances to be taken into account in determining whether the agent acted with due care and diligence. If an agent claims to possess special skills or knowledge, the agent has a duty to the principal to act with the care, competence, and diligence normally exercised by agents with such skills or knowledge. |
|
|
Term
| duty to act only within scope of actual authority and to comply with principal's lawful instructions |
|
Definition
1. an agent has a duty to take action only within scope of the agent's actual authority.
2. an agent has a duty to comply with all lawful instructions recieved from the principal and persons designated by the principal concerning the agent's actions on behalf of the principal. |
|
|
Term
|
Definition
| an agent has a duty, within the scope of the agency relationship, to act reasonably and to refrain from the conduct that is likely to damage the principal's enterprise. |
|
|
Term
| principal's duty to deal fairly and in good faith |
|
Definition
| a principal has a duty to deal with the agent fairly and in good faith, including a duty to provide the agent with information about risks of physical harm or pecuniary loss that the principal knows, has reason to know, or should know are present in the agent's work but unknown to the agent. |
|
|
Term
| a disclosed or partially disclosed principal is responsible for unauthorized representations of the agent made incidental to it if the: |
|
Definition
| agent had authority in the first place and the representations were thought to be true. |
|
|
Term
| conflict of interest: prohibited transactions |
|
Definition
a lawyer must not enter into a transaction with his client unless: 1. the terms are fair and reasonable to the client and he is fully disclosed in a manner that he understands
2. client was given opportunity to seek counsel.
3. client consents in writing.
b. a lawyer cannot use information against the client unless client consents to. |
|
|
Term
| conflict of interest: general rule |
|
Definition
a. a lawyer shall not represent a clent if the representation of that client will be directly adverse to another client, unless:
1. the lawyer reasonablt beleives that representation will not adversely affect the relationship with the other client, and
2. each client consents
b. a lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's own interest, unless:
1. the lawyer reasonably believes the representation will not be adversely affected; and
2. the client consents after consultation. |
|
|
Term
| conflict of interest: former client |
|
Definition
a lawyer who has formely represented a client in a matter shall not thereafter:
a. represent another person in the same or a subastantially related matter in which that person's interests are materially adverse to the interests of the former clinet unless the former client consents after consultation; or
b. use information relating to the representation to the disadvantage of the former client except with respect to a client or when the info. has become generally known. |
|
|
Term
| spouses don not owe duty of care only when: |
|
Definition
| investing community interests |
|
|
Term
| The separate property owned by a married person at the time of division and the property received by the the person in the division is liable for a debt incurred by the person before or during marriage and the person is personally liable for the debt, whether or not the debt was assigned for payment by the person's spouse in division. |
|
Definition
| The separate property owned by a married person at the time of the division and the property recieved by the person in the division is not liable for a debt incurred by the person's spouse before or during marriage, aand the person is not personally liable for the debt, unless the debt was assigned for payment by the person in the division of the property. |
|
|
