3rd party beneficiaries

Question 1

When does a 3rd party beneficiaries right vest?

Answer 1

• When they materially change their position in justified reliance
• When they bring suit on the promise
• When they manifest assent to the promise at the requets of the mromisor or promisee

Question 2

What is a 3rd party beneficiary?

Answer 2

A 3rd party that has an interest in the K but was not a party to it.

Question 3

What is an incidental beneficiary?

Answer 3

a 3rd party that stands to benefit from the K between two other parties, but the purpose of said K was not meant for their benefit, and thus they have no right to enforcement.

Question 4

What is an intended beneficiary?

Answer 4

3rd party that stands to benefit from a K between two other parties and that are also given the right of direct enforcement.

Question 5

What must be shown to make someone an intended beneficary?

Answer 5

It must be shown not only that the 3rd party benefited for the K or that the effect was desired. But also that when the K was entered, the original parties had the purpose of giving the TPB the right of enforcement.

Question 6

When can the original parties to a K modify their K?

Answer 6

The parties to a K can agree to modify or terminate the original K at any time until the benefit to be conferred vests in the 3rd party.

Question 7

What are the promisor’s defenses against the TPB?

Answer 7

The promisor has the same defenses he would have against the promisee (fraud, duress, mistake, improacticability, etc.)

He also has other defenses based on the beneficiaries illigitable conduct

Question 8

What are the TPB’s rights of enforcement?

Answer 8

They have the right of enforcement against the promisor, but only if their rights have vested.

Question 9

What are a promisee’s right of enforcement

Answer 9

The promisee can enforce the K against the promisor only for specific performance, unless the 3rd party is a creditor beneficiary.

Question 10

What is a promisor?

Answer 10

The party who’s promise most directly benefits the TPB, must be an actual party to the contract.

Question 11

What is assignement?

Answer 11

A manifestation of the assignor’s intention to transfer their rights.

Question 12

What is delegation?

Answer 12

taking a duty and transferring it to someone else

Question 13

When can a right not be assigned?

Answer 13

• Assignement is precluded by contract
• Assignement is forbudden by statute or otherwise inapropriate on grounds of public policy
• The assignemnt would materially change the obligor’s duty, or inclrease burden/risk imposes, impair his chance of a return performance, or reduce value

Question 14

What is required for an assignement

Answer 14

Notice and no other special formalities

Question 15

What is novation

Answer 15

the party to whom performance is due clearly & expressly agrees to accept the delegate as a complete substitute for the obligor from his duties under the K.

Must say that liability is transferred

Question 16

What is the effect of not having notice of an assignment?

Answer 16

The obligor may still render performance to the obligee, performance to the assignee is discharged.

Question 17

Who is liable if a delegate breaches?

Answer 17

The origonal party unless their is a novation.

Question 18

What does a TPB take on along with the rights of enforcement?

Answer 18

All rights and obligations

Question 19

What does managed health care say about assignments.

Answer 19

Court states that the general principle is that rights are usually always assignable unless

• It is clear that the personal relationship between the parties is the crucial feature of
  the contract (or it is for special personal or unique services)

Question 20

What does the restatement say about intended 3rd party beneficiaries?

Answer 20

Unless otherwise stated in the K a person is an intended 3rd party beneficiary when recognition of a right to performance in the beneficiary is appropriate to bring about the intention of the parties and either:

• The performance of the promise will satisfy an obligation of the promisee to pay money to the beneficiary; or
• the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance.