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Business Associations (Corporations (Formation (Commencement (corporate…

- - - - Protected from liability by the Business Judgment Rule (rebuttable presumption that directors are honest, well-meaning, and acting through informed decisions)
  - - - Possibility of dissenting shareholders' right of appraisal (shareholder who objects to the action is entitled to an appraisal and payment for his stock)
  - - - Elements: 1) a misrepresentation of material fact; 2) knowledge by the defendant of the misrepresentation or reckless disregard of the truth; 3) scienter (intent to deceive, manipulative, or defraud); 4) reliance of the plaintiff; 5) damages
    - - Prevents unfair use of information and internal manipulation of price
      - Profit recoverable
      - Requires two transactions in stock
      - Strict liability offense
      - Damages
- - - - General partners (manage the business and are personally liable without limitation for partnership obligations)
      - Limited partners (contribute capital and share in profits, but take no part in the control or management of the business, and whose liability is limited to their contributions)
      - Formation (filing a certificate of limited partnership with the Secretary of State; must have at least one general partner and at least one limited partner)
  - - - Generally, a partner always has a right to dissociate, but may still be liable to the partnership for dissociation
- - - - Disclosed vs. undisclosed principal
        
        Fully disclosed: agent is not liable in contract
        
        Undisclosed: agent is personally liable in contract
        
        Partially disclosed: agent is personally liable in contract
      - Breach of warranty of authority: agent acts beyond her authority on behalf of a principal. Agent is personally liable.
    - - Contractual duties owed to agents (compensate; indemnify; reimburse; cooperate)
    - - An agent acting within the scope of his authority may bind his principal in contract.
        
        Actual authority (manifestation of principal to agent that the agent acts for benefit of principal in a particular way and agrees to be bound by agent's actions)
        
        Apparent authority (the agent is "cloaked" with authority; 3rd party reasonably believes agent has authority to act on behalf of principal and belief is based on principal's representations made to 3rd party)
        
        Ratification authority (principal grants retroactive authority for his agent's earlier unauthorized actions)
    - - Contract liability based on the terms of her contract
  - - - Agent is employee (respondeat superior)
      - Agent is a contractor (general rule is no liability)
    - - Individuals are always liable for their own torts
    - - Individuals are always liable for their own torts
    - - Agents are liable for breach of their duties to the principal (COLA)
        
        Duty of Care
        
        Duty of Obedience
        
        Duty of Loyalty
        
        Duty to Account