Business Law Chpt 16 - Final

Creditor beneficiary

benefits from a contract in which promisor promises the promisee to pay a debt the promisee owes to a third party.

Intended beneficiary

promisee intended to confer on the beneficiary the right to bring suit to enforce the contract. Factors: performance is rendered directly to TPB. TPB's right to control contract details. TPB expressly designated as beneficiary.

Delegatee

party to whom the duty is owed

Obligee

person to whom a duty or obligation is owed.

Obligor

person who is obligated to perform the duty.

Defenses

Rights assigned are subject to the same ... Form of the assignment

Duties

Transfer of contractual ... is a delegation.

A

An assignment of all rights under a contract is both an assignment and a delegation. a. True b. False

C

An intended beneficiary: a. is never expressly designated as the beneficiary in the contract. b. cannot directly sue the promisor. c. may be determined by a court using the reasonable person test. d. None of these choices.

C

Courts determine a third party beneficiary to be an intended beneficiary if: a. the surrounding circumstances and the language of the contract imply that. b. the contract implies that intent. c. the surrounding circumstances imply that and if such intent is expressed in the contract. d. All of these choices.

D

Donee beneficiaries: a. cannot sue the promisor directly to enforce the promise. b. are unintended beneficiaries. c. can sue the promisee directly to enforce the contract unless they are intended beneficiaries. d. are third parties to contracts made for the express purpose of giving a gift to a third party.

Delegator

party making the delegation of duty

D

If the rights of a third party have been vested: a. they cannot be taken away. b. it means the rights have taken effect. c. they cannot be rescinded without the consent of the third party. d. All of these choices.

D

Intended third party beneficiaries can: a. sue a promisee directly for breach of the contract. b. not have the performance stipulated in the contract rendered directly to them c. not sue the promisor directly for breach of the contract. d. None of these choices.

Assignee

party receiving rights

B

Rights cannot be assigned: a. when a contract is impersonal in nature. b. when a statute expressly prohibits assignment. c. unless the assignment changes the risks of the obligor. d. None of these choices.

Incidental Beneficiary

TPB's benefit from contract between two parties is unintentional. Cannot sue to enforce the contract.

C

The obligee: a. owes duties to another party. b. can delegate rights to an assignor. c. is the person to whom an obligation is owed. d. can assign duties to an assignor.

D

The presence of this strongly indicates the third party is an intended beneficiary to a contract: a. the third party is implicitly designated so in the contract. b. performance is rendered indirectly to the third party. c. the third party has no right to control the details of performance. d. None of these choices.

D

The transfer of contractual rights means: a. duties set in the contract will have to be performed by another party. b. an assignment has been made. c. an assignee receives duties to assign to another party. d. a delegation has been made.

Incidental

Third party beneficiary's benefit from contract between two parties is unintentional. Cannot sue to enforce the contract.

Rights

Transfer of contractual ... is an assignment.

D

Transferring contractual rights to a third party: a. is known as a delegation. b. normally relieves a party of its obligations. c. is known as the privity of contract. d. can occur after the original contract is made.

D

When rights under a contract are assigned unconditionally, the: a. assignee has a right to demand performance from the other original party to the contract. b. assignee takes only those rights that the assignor originally had. c. rights of the assignor are extinguished. d. All of these choices

C

When rights under a contract are assigned unconditionally, the: a. third party has a duty to perform for the other original party to the contract. b. assignor takes only those rights that the original parties had. c. rights of the assignor are extinguished. d. None of these choices

Discharged

a party may be ... from a valid contract by: a condition occuring - or not occurring

Intended Beneficiary

contract that benefits a third party. is a third party to whom performance is rendered directly and/or, who has the right to control the details of performance or who is designated a beneficiary in the contract can sue to enforce the contract.

Incidental beneficiary

contracts that benefits a third party. is a third party who benefits from a contract but whose benefit was not the reason for the contract and/or who has no rights in the contract. cannot sue to enforce the contract.

Donee beneficiary

contrat is made for the express purpose of promisor giving a gift to a third party (...), the ... can sue the promisor directly if the promisor breaches the contract. Today: distinguish only between intended and incidental beneficiaries.

Delegations

contratual duties in a bilateral contract that are delegated to a third party.

Third Party Beneficiaries

courts hold a third party beneficiary's (...) rights vest when: This materially alters position in reliance on the contract. This brings a lawsuit on the promise. This demonstrates consents to the promise at request of promisor/promisee.

Effect of a delegation

delegator remains liable (subleases -- if the people don't pay you are still liable for the payment) delegatee is liable if delegation contract creates a third party beneficiary relationship in the obligee.

Assignment of "All Rights"

generally when an assignment is made in a contract, the implication is an ... and duties. However, assignee remains liable for performance of duties.

No notice

if ... : who has the priority if the assignor assigns the same right to two different persons? Obligor can discharge his obligation by performance to assignor

Contract

if ... reserves rights to contracting parties to rescind, cancel, or modify the contract the TPB's rights also change.

Notice of Assignment

once assignment is made, assignee should notify the obligor of the assignment.

Privity of Contract

only original parties to a contract have rights an liabilities under the contract. Exceptions: Assignment or Delegation, Third party beneficiary contract.

2nd Exception to Privity of Contract

original parties to the contract intend at the time of contracting to directly benefit a third person.

Assignor

party assigning rights to third party.

Rights that cannot be assigned

when a statute expressly prohibits assignments, when a contract in personal in nature, assignment materially changes rights or duties of obligor, when an assignment will significantly change the risk or duties of the obligor.

Effect of An Assignment

when rights of assignor are unconditionally assigned, her rights are extinguished. the third party (assignee) has right to demand performance from original party to contract.

Duties that cannot be Delegated

when the duties are personal in nature, when performance by a third party will vary materially from that expected by the obligee, when the contract prohibits delegations

ALL

when you assign all rights, you are assigning ... rights and duties. because the delegator still has to perform.