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Agency & Partnership Professor Donald J. Kochan

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1 Agency & Partnership Professor Donald J. Kochan
Class 1

2 Today’s Materials and Issues
Course Introduction Please download and read the following: Michael C. Jensen & William Meckling, Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure, 3 J. Fin. Econ. 305 (1976): 1. Restatement (Third) Of Agency Intro. (2006) Restatement of the Law — Agency Restatement (Third) of Agency Current through August 2008 Introduction Agency Theory Principal/Agent Fiduciary Duties Delegations of Authority Ownership/Control

3 Preliminary Exam Instructions
Spring final exam is 3 hours essay and short answer and multiple choice. The exam will cover all materials assigned in your required text, all materials covered in lectures, and any assigned supplemental material including handouts.  The examination is a modified open book examination – each student may use his/her text, any assigned supplemental materials, any notes or outlines which that student prepared, and any group notes or outlines to which he/she made a significant contribution in preparation.  A common usage English language dictionary is also permitted. No commercial outlines, treatises, or similar materials will be permitted for use during the examination.

4 Required Text Agency, Partnership and the LLC: The Law of Unincorporated Business Associations (LexisNexis/Bender 7th ed. 2007) ISBN X

Course Materials Required Course Materials and Suggested Supplemental Materials will be available at: TWEN Page: and/or All students must register on the TWEN page for this course (Please note that TWEN has instructional materials that are recommended), and must make themselves familiar with the Social Science Research Network, (“SSRN”), and JSTOR,

6 Suggested Supplemental Materials
Gregory's Hornbook on the Law of Agency and Partnership, 3d By William A Gregory AND also

7 Restatement of the Law Third, Agency - Volumes 1 & 2
For some history, see

8 Restatement of the Law Third, Agency – Introductory Definition
“§ 1.01 Agency Defined Agency is the fiduciary relationship that arises when one person (a "principal") manifests assent to another person (an "agent") that the agent shall act on the principal's behalf and subject to the principal's control, and the agent manifests assent or otherwise consents so to act.”

9 Restatement of the Law Third, Agency - Introduction
“The subject matter of this Restatement, the common law of agency, encompasses the legal consequences of consensual relationships in which one person (the “principal”) manifests assent that another person (the “agent”) shall, subject to the principal's right of control, have power to affect the principal's legal relations through the agent's acts and on the principal's behalf. Relationships of agency usually contemplate three parties—the agent, the principal, and third parties with whom the agent interacts in some manner. Agents of the same principal may also interact, with legal consequences for their mutual principal. This Restatement also embraces the situation in which the legal consequences of agency apply to a relationship in which an actor appears to third parties to be acting as a person's agent but the relationship between the putative principal and the actor lacks elements of the common-law definition of agency.” “Many questions governed by common-law agency doctrines involve the legal consequences of an agent's interactions with third persons. Such interactions may create legal rights and duties as between the principal and the third party, the agent and the third party, and the principal and the agent. The common law of agency also governs the legal consequences of the relationship of the agent and the principal with each other, which is in many respects defined and governed by any agreement between them. Agency doctrine also imputes the agent's knowledge to the principal in many circumstances.”

10 Revised Uniform Partnership Act (“RUPA”)
From the National Conference of Commissioners on Uniform State Laws: From Westlaw:

11 A Useful Start for Your Outline and Bar Prep
From the National Conference of Bar Examiners:

12 Further Non-Required Readings (Not Specifically Recommended, But Interesting)
Gow, Niel A Practical Treatise on the Law of Partnership. Buffalo, N.Y.: W.S. Hein. Hamilton, Robert W., and Jonathan R. Macey Cases and Materials on Corporations, Including Partnerships and Limited Liability Companies. 8th ed. St. Paul, Minn.: West Group. Hynes, J. Dennis Agency, Partnership, and the LLC in a Nutshell. 2d ed. St. Paul, Minn.: West Group. Moye, John E., ed The Law of Business Organizations. 5th ed. Albany, N.Y.: West Legal Studies. Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities, and Bankruptcy. 12th ed. Vol Philadelphia: American Law Institute–American Bar Association Committee on Continuing Professional Education.

13 Suggested Readings from the Vault of Chapman Professor Tom W. Bell
Agency, Partnerships, and Unincorporated Business Organizations Final Exam, Spring 1999 Agency and Partnership Final Exam, Fall 1996 NOTE: My exams will be different, but as practice material I am still suggesting these exams for review of the kind of issues that may be tested. You WILL receive a Practice Exam that I drafted later in the semester.

14 Always draw paralels to other courses
Concluding Remarks This course will mix black letter and theory, and the relationships with both Try to focus on why it complements Corporations or the Business Association courses – that is, always ask yourself when and why things are different (as well as what are the same) Always draw paralels to other courses Always think about your own life – when you are or have been, formally or informally, in an agency or partnership relationship, because you surely have been

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