Select Page

Agency and Partnerships
University of South Carolina School of Law
Burkhard, James R.

Agency Outline
Burkhart, 2005
1.      Agents, Servants, And Independent Contractors
1.1.   The Players
1.1.a.       The Players- defined in the restatement
1.1.a.i.               Agents
1.1.a.ii.              Servants
1.1.a.iii.            Principals
1.1.a.iv.            Masters
1.1.a.v.             Independent contractors
1.2 Statutory modifications to CL of Agency-  see attached
1.3  Who is an Agent.  Johnson v. Arabi
                  a.  Agency rel’ship is a Q of fact to be determinied by the relation, situation, conduct and declarations of the party sought to be charged as a principal.
                  b.  Can be express implied or ostensible
                  c.  Marital relations do not of themselves create it.
1.4 Notes
      1.  A corporation can be an agent for a shareholder as to an asset if it is set forth as so in writing.
      2.  Generally, by statute, an insurance broker is an agent of the insured- but in certain circumstances (driven by facts) they can also be an agent of the insurance company
3.  Degree of capacity to create an agency relationship is the same as to form a K.
4.  36-2-803 provides PJ over s person acting through an agent in regard to a cause of action arising from the agent’s conduct in SC.
Chapter 2:  Defining P’ships and LLCs
2.1 Partnership test exists in statute and case law.  See 33-41-210,220, 370(A), 510(1), 740(1)
2.2  Tests to determine joint adventures are not applicable to determine if a p’ship exists.  However a joint adventure ¹ joint venture [which is a type of partnership]  
2.3  Loss sharing- §510(1) does require partners to contribute to losses- but this is subject to any agreement between the partners.  So loss sharing doesn’t always have to be present.  Also, in LLPs,  partners are protected from liabilities and debts arising from negligence, wrongful acts, or misconduct in the course of business.
2.4 Burden of proof-  §220(4) states that sharing in profits is prima facia evidence of a p’ship- however, the D can rebut the presumption by showing mere co-tenacy.  Generally the party who wishes to assert that a p’ship exists carries the burden of proof- but courts are split as to whether this must be by a preponderance standard or clear and convincing evidence.
2.5  Profit shares do not have to be initially defined or declared- the statute provides a default scheme.
2.7  Beck v. Clarkson (1989)
            a.  Damages for profits on a new business are no longer barred per se-  but cannot be speculative, must be the result or natural consequence of the breach, and profits must have been w/in the contemplation of the parties at the time the K was made.
            b.  In a p’ship at will, any party may disassociate at any time, for any reason, regardless of the consequences it may hold to others.
            c.  Recognized a partners duty not to compete with p’ship with respect to a p’ship opportunity which is being actively pursued by the partnership continues after his withdrawal.
            d.  Test for p’ship
                        i.  Sharing of profits and losses

  It has two sections; (1) which is for situations dealing directly with an individual, and (2) which involves a public holding out.  The first requires some sort of credit given in reliance upon representations, the other doesn’t mention giving credit.  However RUPA (the comparable section) still requires reliance by  a third party.  You should compare §380 with § 40(2):  the latter says that the law of estoppel applies under the UPA, but maybe § 380 limits this application to its terms. 
1.      Remember, estoppel is only available to third parties.
3.2  Kaplan v. Gibson-  court found that the trial court’s failure to require the jury to find detrimental reliance upon the representation of a p’ship from the charge of an ostensible p’ship did not invalidate a finding of partnership by estoppel liability.
3.3  Standard Oil Co. v. Gibson-  D not held for ostensible p’ship because his son’s business had a sign saying “Henderson & Sons” where D had no knowledge or dealings with his son’s business, and neither he nor his son never made any other statement to anyone implying that D was a partner in the business.
            1.  The courts statute did require that reliance upon the existence of a partnership was necessary for P’s case.