Are Partners Agents?

18 Pages Posted: 31 Jan 2008

See all articles by Larry E. Ribstein

Larry E. Ribstein

University of Illinois College of Law (deceased); PERC - Property and Environment Research Center

Date Written: January 18, 2008

Abstract

Partners have been characterized as agents of the partnership. But this is wrong to the extent that it implies that the law of agency should be applied to partnership. In fact, agency is a distinct set of default rules that apply to a particular type of relationship. Each business association has its own set of default rules that apply to a specific type of relationship. It follows that the commentary of the Restatement (Third) of Agency may be misleading to the extent that it implies otherwise by purporting to deal with partnership-type firms. Moreover, the Revised Uniform Limited Liability Company Act is particularly misguided in dispensing with agency rules and implicitly importing the law of agency into the law of limited liability companies. Similar principles apply to corporate law and the relationship among the shareholders, the corporation and the board of directors.

JEL Classification: K22

Suggested Citation

Ribstein, Larry Edward, Are Partners Agents? (January 18, 2008). U Illinois Law & Economics Research Paper No. LE08-004. Available at SSRN: https://ssrn.com/abstract=1086745 or http://dx.doi.org/10.2139/ssrn.1086745

Larry Edward Ribstein (Contact Author)

University of Illinois College of Law (deceased)

PERC - Property and Environment Research Center

2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

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