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