Unincorporated Business Entities
Syllabus
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Prof. Carol B. Swanson
Spring 2009
Fridays, 10-11:50, Room 103
1. Course Description & Objectives :
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The primary course objectives are the study of agency concepts, which involve
the legal consequences of acting on behalf of other persons or entities, and the
formation and operation of unincorporated businesses such as sole proprietorships,
partnerships, and limited liability companies. Important topics include the rights and
liabilities of those owning and managing unincorporated business forms vis-à-vis other
owners/managers, their employees, and third parties.
By the semester’s end, each student will be able to understand and articulate:
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The agency relationships in business entities, including the attendant fiduciary
obligations and the operation of agency principles to bind the business;

The definition and nature of the various unincorporated business forms,
including sole proprietorships, partnerships (general, limited, LLP, LLLP), and
limited liability companies (LLCs);

How these unincorporated businesses are formed, and the liabilities associated
with defective formation;

How these unincorporated businesses are managed, and the fiduciary
obligations associated with management; and
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The rights and obligations of business owners, and the extent to which they may
be personally liable for business obligations.
2. Required Text & Materials :
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William A. Klein, J. Mark Ramseyer, & Stephen M. Bainbridge, AGENCY,
PARTNERSHIP, AND LIMITED LIABILITY ENTITIES: CASES AND MATERIALS ON
UNINCORPORATED BUSINESS ASSOCIATIONS (2 nd ed. 2007)(Foundation
Press)("text").
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TWEN: Course Website. Students must enroll and provide an e-mail address.
Additional class materials will be made available through TWEN.
3. Grades & Attendance :
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Grading will be based on a final exam that is anonymous, two-hour, closed-book,
and self-scheduled. Ungraded quizzes will be given throughout the semester to help
students assess their familiarity with the materials.
The ABA requires that all law students regularly attend classes. Since this course
meets only once a week, missing one session is the same as missing an entire week.
As a result, missing two classes is presumptively excessive and can be the basis for
involuntary withdrawal from the course.
4. Technology Policy :
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Students may use their laptops or other electronic devices in the classroom for
course-related activities only. In addition, students must refrain from displaying
wallpaper, screen savers, or any other material on their computer screens that can
reasonably be expected to distract their classmates.
5. My Availability :
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Whenever you want to contact me, please call (651-523-2138), send an email
( cswanson@hamline.edu ), or stop by my office (Room 216E). Scheduling an office
appointment is not necessary, although setting one up will assure you of my availability
at a particular time (set the appointment up through me or my assistant Gloria Strom
651-523-2805; gstrom01@hamline.edu ). If my office door happens to be closed when
you stop by, always feel free to knock!
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Class Schedule & Assignments :
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Friday, January 23: Text pp. 1-40, 156-69 (Advance Assignment for first class).
Chapter 1: Agency (1)
1. Who is an Agent? (1)
a. Gorton v. Doty (Idaho 1937)(1)
b. MJ & Partners Restaurant Ltd Partnership v. Zadikoff (N.D. Ill. 1998)(6)
c. Rose v. Giamatti (S.D. Ohio 1989)(12)
d. A. Gay Jenson Farms Co. v. Cargill, Inc. (Minn. 1981)(17)
2. Principal’s L to 3 rd Parties in Contract (Actual Authority) (25)
a. Mill Street Church of Christ v. Hogan (Ky. App. 1990)(25)
b. Karl Rove & Co. v. Thornburgh (5 th Cir. 1994)(27)
c. Apparent Authority (34)
i. Lind v. Schenley Industries, Inc. (3d Cir. 1960)(34)
ii. Three-Seventy Leasing Corp. v. Ampex Corp. (5 th Cir. 1976)(40)
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Friday, January 30: Text pp. 40-74.
Chapter 1: Agency, cont’d
1. Principal’s L to 3 rd Parties in CONTRACT (34)
a. Inherent Authority (43)
i. Watteau v. Fenwick (Queen’s Bench 1892)(43)
ii. Kidd v. Thomas A. Edison, Inc. (S.D.N.Y. 1917)(46)
iii. Nogales Service Center v. Atlantic Richfield Co. (Ariz. 1980)(49)
iv. Norby v. Bankers Life Co. (Minn. 1975)(55)
b. Ratification (54)
i. Botticello v. Stefanovicz (Conn. 1979)(54)
ii. Ercanbrack v. Crandall-Walker Motor Co. (Utah Sup. Ct. 1976)(58)
c. Estoppel (62)
i. Hoddeson v. Koos Bros. (N.J. App. Div. 1957)(62)
ii. Pension Fund v. Steven Scott Enterprises (S.D.N.Y. 1999)(65)
2. Agent’s L on the CONTRACT (71)
a. Atlantic Salmon A/S v. Curran (Mass. App. 1992)(71)
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Friday, February 6: Text pp. 75-113.
Chapter 1: Agency, cont’d
1. Principal’s L to 3 rd Parties in TORT (75)
a. Servant or Independent Contractor?
i. Humble Oil & Refining Co. v. Martin (Tex. 1949)(76)
ii. Hoover v. Sun Oil Co. (Del. 1965)(78)
iii. Murphy v. Holiday Inns, Inc. (Va. 1975)(81)
iv. Parker v. Domino’s Pizza (Fla. Dist. Ct. App. 1993)(85)
b. Tort L and Apparent Agency (89)
i. Billops v. Magness Construction Co. (Del. Sup. 1978)
c. Scope of Employment (93)
i. Brill v. Davajon (Ill. App. 1964)(93)
ii. Ira S. Bushey & Sons, Inc. v. U.S. (2d Cir. 1968)(95)
iii. Manning v. Grimsley (1 st Cir. 1981)(100)
iv. Lamkin v. Brooks (La. 1986)(103)
d. Statutory Claims (106)
i. Arguello v. Conoco, Inc. (5 th Cir. 2000)(106)
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Friday, February 13: Text pp. 113-55.
Chapter 1: Agency, cont’d
1. Principal’s L to 3 rd Parties for Torts of Independent Contractors (113)
a. Majestic Realty Associates, Inc. v. Toti Contracting Co. (N.J. 1959)(113)
b. Anderson v. Marathon Petroleum Co. (7 th Cir. 1986)(117)
c. Kleeman v. Rheingold (N.Y. 1993)(122)
2. Fiduciary Obligation of Agents (126)
a. Duties During Agency (126)
i. Reading v. Regem (King’s Bench 1948)(126)
ii. General Automotive Manufacturing Co. v. Singer (Wisc. 1963)(129)
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b. Duties During & After Agency’s Termination: “Grabbing & Leaving” (133)
i. Bancroft-Whitney Co. v. Glen (Cal. 1966)(133)
ii. Town & Country House & Home Service, Inc. v. Newbery (N.Y.
1958)(145)
iii. Corroon & Black-Rutters & Roberts, Inc. v. Hosch (Wisc.
1982)(148)
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Friday, February 20: Text pp. 170-213.
Chapter 2: Partnerships (170)
1. What Is a Partnership, and Who Are the Partners? (170)
a. Partners Versus Employees (170)
i. Fenwick v. Unemployment Compensation Commission (N.J.
1945)(170)
ii. Clackmas Gastroenterology Associates v.Wells (U.S.
2003)(175)
iii. Equal Employment Opportunity Commission v. Sidley Austin
Brown & Wood (7 th Cir. 2002)(179)
iv. Frank v. R.A. Pickens & Son Co. (Ark. 1978)(186)
b. Partners Versus Lenders (189)
i. Martin v. Peyton (N.Y. 1927)(189)
ii. Kaufman-Brown Potato Co. v. Long (9 th Cir. 1950)(194)
c. Partnership by Estoppel (198)
i. Young v. Jones (D. S.C. 1992)(198)
2. The Partners’ Fiduciary Obligations (202)
a. Introduction (202)
i. Meinhard v. Salmon (N.Y. 1928)(202)
ii. Singer v. Singer (Okla. Ct. App. 1981)(208)
b. Fiduciary Obligations After Dissolution (211)
i. Bane v. Ferguson (7 th Cir. 1989)(211)
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Friday, February 27: Text pp. 213-51.
Chapter 2: Partnerships, cont’d
1. The Partners’ Fiduciary Obligations, cont’d
a. Grabbing & Leaving (213)
i. Meehan v. Shaughnessy (Mass. 1989)(213)
ii. Gibbs v. Breed, Abbott & Morgan (N.Y. Sup. Ct. 2000)(220)
b. Expulsion (225)
i. Lawlis v. Kightlinger & Gray (Ind. App. 1990)(225)
ii. Bohatch v. Butler & Binion (Tex. 1998)(231)
2. Partnership Property (239)
a. Putnam v. Shoaf (Tenn. Ct. App. 1981)(239)
3. Raising Additional Capital (243)
4. Partners’ Management Rights (247)
a. National Biscuit Co. v. Stroud (N.C. 1959)(247)
b. Summers v. Dooley (Idaho 1971)(249)
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Friday, March 6: Text pp. 251-98.
Chapter 2: Partnerships, cont’d
1. Partners’ Management Rights, cont’d
a. Moren ex rel. Moren v. JAX Restaurant (Minn. App. 2004)(251)
b. Day v. Sidley & Austin (D. D.C. 1976)(253)
2. Partners at Loggerheads: Dissolution Solution (261)
a. Right to Dissolve (261)
i. Owen v. Cohen (Cal. 1941)(261)
ii. Collins v. Lewis (Tex. Ct. Civ. App. 1955)(264)
iii. Page v. Page (Cal. 1961)(269)
iv. Creel v. Lilly (Md. 1999)(272)
b. Consequences of Dissolution (279)
i. Prentiss v. Sheffel (Ariz. App. 1973)(279)
ii. Disotell v. Stiltner (Alaska S. Ct. 2004)(282)
iii. Monin v. Monin (Ky. App. 1989)(289)
iv. Pav-Saver Corp. v. Vasso Corp. (Ill. App. 1986)(292)
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Friday, March 13: Text pp. 298-315, skim 316-53.
Chapter 2: Partnerships, cont’d
1. Dissolution Solution, cont’d
a. Sharing Losses
i. Kovacik v. Reed (Cal. S. Ct. 1957)(298)
b. Buyout Agreements
i. G&S Investments v. Belman (Ariz. Ct. App. 1984)(301)
c. Law Partnership Dissolution (305)
i. Jewel v. Boxer (Cal. App. 1984)(305)
ii. Meehan v. Shaughnessy (Mass. S. Ct. 1989)(310)
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Getting to Know UPA (1914)(316-31), UPA (1996)(332-53) & Problems
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Friday, March 20: Text pp. 354-72 & Supplemental Materials.
Chapter 3: Limited Liability Entities (354)
1. Limited Partnerships (354)
a. Holzman v. De Escamilla (Cal. App. 1948)(354)
b. Frigidaire Sales Corp. v. Union Properties, Inc. (Wash. 1977)(356)
c. Jerman v. O’Leary (Ariz. App. 1985)(358)
d. Sonet v. Plum Creek Timber Co., L.P. (Del. Ch. 1998)(362)
e. Cincinnati SMSA L.P. v. Cincinnati Bell Cellular Systems Co. (Del.
1998)(368)
2. Limited Liability Partnerships (LLPs)(supplemental materials on TWEN)
3. Limited Liability Limited Partnerships (LLLPs)(supplemental materials on
TWEN)
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NOTE: NO CLASS on Friday, March 27 (Spring Break)
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Friday, April 3: Text pp. 373-414.
Chapter 3: Limited Liability Entities, cont’d
1. Limited Liability Companies (373)
a. LLC Formation (373)
i. Water, Waste & Land, Inc. d/b/a Westec v. Lanham (Col.
1998)(373)
b. LLC Operating Agreement (377)
i. Elf Atochem North America, Inc. v. Jaffari (Del. Sup. Ct.
1999)(378)
c. Piercing the LLC Veil (385)
i. Tom Thumb Food Markets, Inc. v. TLH Properties, LLC (Minn.
App. 1999)(unpublished opinion)(386)
d. Fiduciary Obligation (389)
i. McConnell v. Hunt Sports Enterprises (Ohio App. 1999)(389)
ii. VGS, Inc. v. Castiel (Del. Ch. 2000)(395)
e. Expulsion from the LLC (401)
i. Walker Resource Development Co. (Del. Ch. 2000)(401)
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NOTE: NO CLASS on Friday, April 10 (Easter Weekend)
Friday, April 17: Text pp. 414-26 & Supplemental Materials.
Chapter 3: Limited Liability Entities, cont’d
1. LLCs, cont’d
a. Dissolving the LLC (414)
i. New Horizons Supply Cooperative v. Haack (Wisc. App.
1999)(414)
ii. The Dunbar Group, LLC v. Tignor (Va. 2004)(418)
iii. Investcorp, L.P. v. Simpson Investment Co. (Kan. 1999)(422)
b. Supplemental LLC Cases on TWEN
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Friday, April 24: Text pp. 446-79 & Supplemental Materials (on TWEN)
1. Getting to know ULLCA (1996)(446-79) & Revised ULLCA (2006)
2. Problems
Friday, May 1: Text pp. 427-45 & Supplemental Materials (on TWEN)
Chapter 3: Limited Liability Entities, cont’d
1. Securities Regulation Issues (427)
a. Great Lakes Chemical Corp. v. Monsanto Co. (D. Del. 2000)(429)
b. Koch v. Hankins (9 th Cir. 1991)(439)
2. The Future of Unincorporated Business Entities (Supplemental)
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Tuesday, May 5 (Friday classes run on Tuesday): Supplemental Materials (on
TWEN)
1. Problems
2. Class Overview
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