3rd Parties

Question 1

What benefits to 3rd party beneficiaries have?

Answer 1

Right to sue for breach of K

Question 2

What benefits do incidental beneficiaries have?

Answer 2

none because they are not a party to the K

Question 3

What are the rules regarding assignment?

Answer 3

Generally, rights and benefits can be assigned to 3rd party

If prohibited, assignor breaches when assignment is made, BUT the assignment is still valid and enforceable by assignee

If K invalidates it, assignment is void and assignee cannot enforce the assignment

Question 4

What rights to assignees have?

Answer 4

The right to sue the OBLIGOR for nonperformance and the right to sue the ASSIGNOR for wrongful revocation of assignment or breach of implied warranty.

Note: defense to enforcement that can be used against the ASSIGNOR can be used against the ASSIGNEE

Question 5

What are the rules regarding delegation?

Answer 5

Parties can delegate their duties under K to a 3rd party IF:

1. the K does NOT prohibit delegation, AND
2. the other party doesn’t have a special interest in have a specific individual perform

A delegatee is NOT liable for breach unless she receives consideration from the delegating party