The Agency Relationship

1
The Agency Relationship
2
The entrepreneurs liability
-100
Pay entrepreneur 90 of the extra 50 11
11 11 11 11 45
3
Nichols v. Arthur Murray, Inc.
Arthur Murray School of Dancing
Burkin, Inc. (franchisee)
license
Arthur Murray, Inc. (franchisor)
Nichols (customer)
4
Judy, Kathy and Ray
Kathy Labor Cash
Judy Labor Building Cash
Ray Labor
5
Definition of partnership

• Profit-sharing revenues expenses ? prima
  facie evidence of partnership
• If proof of protected relationship (e.g.,
  debtor-creditor) proponent of partnership must
  bring in additional proof

6
Minute Maid v. United Foods
United Foods
Credit Storage
OJ
U.S. Cold Storage
Special Account
Credits - Debits Allowances, etc. Interest,
etc Parties split the difference
7
Martin v. Peyton
Plaintiff creditors
Peyton (defendant creditors)
KN K
Loan (securities)
Profits control
8
Senior Living
Surety
Reimbursement agreement Premiums 90 cash
Control (veto and chooses managers)
Guarantee
99.9 loan
creditor
nursing home LLC Owner investment.1
9
Forming agency and partnership

• Consider the role of . . .
• Actual contracts
• Standard form contracts
• Policy considerations