Chapter 12

creditor beneficiary main points

Contractual performance fulfills obligation to third party • Beneficiary can enforce rights to contract if contract valid and rights have vested • Beneficiary can enforce rights against promisor or promisee

exceptions to statute of frauds writing requirement

admission, where the defendant admits that oral contract existed, partial performance, promissory estoppel, miscellaneous exceptions recognized by the uniform commercial code

parole evidence rule

common law rule stating that oral evidence of agreement made before of contemporaneously with written agreement is inadmissible when parties intended to have the written agreement be a complete and final version of the agreement

contracts subject to statute of frauds

contracts that cant be performed within the year they are made, prenups, real estate contracts, promise to pay another party's debt, contracts for the sale of goods valued at upwards of 500 dollars

third party right to contracts: obligee

contractual party owed duty from the other party in privity of contract

third party right to contracts: obligor

contractual party who owes duty to other party in privity of contract

contractual duties that cannot be delegated

duties that are personal in nature, duties that result in the delegatees performance varying significantly from the delegators, and duties in a contract that expressly forbid delegation

general rule of integrated contracts

integrated contracts prevent admissibility of parole evidence

purpose of parole evidence rule

it lends stability, predictability, and integrity to written contracts

vesting

maturing of rights, such that a party can legally act on the rights

the equal dignity rule

only recognized in a few jurisdictions, requires contracts that are negotiated by an agent, that would normally fall under the statute of frauds if negotiated by the principal, to still be in writing

delegatee

party (not in a privity of contract) who receives transfer of duty to a contract

assignee

party (not in privity of contract) who receives transfer of rights to a contract

delegator

party to a contract who transfers his/her duty to a third party

promisor

party to contract who made a promise that benefits the third party

promisee

party to contract who owes something to promisor in exchange for promise made to a third party beneficiary

assignor

party to contract who transfers his/her rights to a third party

third purpose of statute of frauds

prevent parties from entering into contracts with which they do not agree

contractual rights that cannot be assigned

rights that are personal in nature, rights that would increase obligors risks/duties, rights that expressly forbid assignments, rights whose assignment are prohibited by law/public policy

statute of frauds

rule of state law requiring certain types of contract to be in writing in order to be enforceable

assignment

the transfer of rights under a contract to a third party

intended beneficiary

third party to contract whom contracting parties intended to benefit directly from contract. intended beneficiaries can sue to enforce the contract obligations

donee beneficiary

third party who benefits from contract in which promisor agrees to give a gift to the third party

creditor beneficiary

third party who benefits from contract in which the promisor agrees to pay the promisees debt

incidental beneficiary

third party who unintentionally gains benefit from contract between other parties. the contracting parties didnt mean to benefit them, and they cannot sue for damages

first purpose of statute of frauds

to ease contractual negotiations by requiring sufficient, reliable evidence to prove that the contract existed and its specific terms.

second purpose of statute of frauds

to prevent unreliable, oral evidence from interfering with the contractual relationship

delegation

transfer of duty under a contract to a third party

statute of frauds writing requirements

written consent must clearly indicate: parties to contract subject matter/purpose consideration given by both parties significant terms signature of party plaintiff seeks to hold responsible under contract

statute of frauds writing requirements UCC

written contract for sale of goods must include the quantity. They allow a variety of written documents to constitute a writing

integrated contracts

written contracts within the statute of frauds intended to be a complete and final representation of the parties' agreement

exceptions to the parole evidence rule

• Contracts that are subsequently modified • Contracts conditioned on orally agreed-upon terms • Contracts that are not final, as they are part written and part oral • Contracts with ambiguous terms • Incomplete contracts • Contracts with obvious typographical errors • Voidable or void contracts • Evidence of prior dealings or usage of trade

donee beneficiary main points

• Contractual performance gives a gift to third party • Beneficiary has limited ability to enforce contract (depending on jurisdiction) • Beneficiary can enforce rights against promisor