Business Law - Chapter 17

In determining whether a third party beneficiary is an intended or an incidental beneficiary, the court focus on __, as expressed in the contract language and implied by the surrounding circumstances.

intent

When a contract is made for the express purpose of giving a gift to a third party, the third party (the ____) can sue the promisor directly to enforce the promise.

donee beneficiary

Delegation is prohibited when the duties are ___ in nature.

personal

If a contract is for ___, the rights under the contract normally cannot be assigned unless all that remains is a monetary payment.

personal services

Prohibitions against the assignment of real estate are called restraints against __.

alienation

When a contract provides for an assignment of ___, this wording may create both an assignment of rights and a delegation of duties.

all rights

The transfer of contractual rights to a third party is known as an ___.

assignment

Until the obligor has notice of an assignment, the obligor can discharge his or her obligation by performance to the ___.

assignor

In an assignment, the party assigning the rights to a third party is known as the ___, and the party receiving the rights is the ___.

assignor, assignee

Rights vest when the third party ___ on the promise.

brings a lawsuit

The court ruled that spectators of the Tyson biting match could not sue because they were not in ___ with the defendants.

contractual privity

A ___ beneficiary benefits from a contract in which one party (the promisor) promises another party (the promisee) to pay a debt that the promisee owes to a third party.

creditor

The transfer of contractual duties to a third party is known as a ___.

delegation

Normally, a delegation of duties does not relieve the ___ of the obligation to perform in the event that the delegatee fails to do so.

delegator

The party delegating the duties is the ___, and the party to whom the duties are delegated is the __.

delegator, delegatee

A contract cannot prevent an assignment of the right to receive ___.

funds

An ____ is a third person that receives a benefit from a contract even though that person's benefit is not the reason the contract was made.

incidental beneficiary

Only __ beneficiaries acquire legal rights in a contract.

intended

The law distinguishes between __ beneficiaries and ___ beneficiaries.

intended, incidental

Rights vest when the third party materially changes his or her position in ___ on the promise.

justifiable reliance

The most common donee beneficiary contract is a ___.

life insurance contract

The assignment of __ instruments cannot be prohibited.

negotiable

An ___ is the person to whom a duty or obligation is owed, and the ___ is the person who is obligated to perform the duty.

obligee, obligor

A right cannot be assigned if the assignment will significantly increase or alter the risks to or the duties of the ___.

obligor

Restraints on the power to assign do not prohibit an assignment by ___, such as an assignment pursuant to bankruptcy or death.

operation of law

The person who made the promise that benefits the third party is the ___.

promisor

When the original parties to the contract agree that the contract performance should be rendered to or directly benefit a third person, the third person becomes an intended ___.

third party beneficiary

When rights under a contract are assigned ___, the rights of the assignor are extinguished.

unconditionally

An intended third party beneficiary cannot enforce a contract against the original parties until the rights of the third party have ___, which means the rights have taken effect and cannot be taken away.

vested