3rd Party Beneficiary

Question 1

Intended Beneficiary

Answer 1

A beneficiary is intended if BOTH parties intend to create the obligation

Have rights to enforce the contract

Question 2

Incidental Beneficiary

Answer 2

Not intended by both parties, and have no rights to enforce the contract.

Question 3

Do beneficiaries need to be identified?

Answer 3

No, identification is not required. (ex. life ins. for my kids)

Question 4

§309 Defenses Against the Beneficiary

Answer 4

Pre K (1) Any formation defect results in no K. 
Post K (2) Impracticability, non-occurence of a condition...

Question 5

§311 Vesting

Answer 5

Gen Rule: the promissor and promisee retain power to discharge or modify the duty by subsequent agreement

Such a power terminates when the beneficiary, before he receives notification of the discharge or modification

Exceptions:

1) 3rd party acted in reliance (change position, now has rights)
2) brings suit on it (sues on K)
3) 3rd party accepted

Question 6

Public Services

Answer 6

Must identify if beneficiary relationship was INTENDED to be created. (look to conduct/actions/words).

Question 7

To be bound as a 3rd party beneficiary…

Answer 7

The terms of the contract must clearly express intent to benefit that party or an identifiable class of which the party is a member.

(the intent of both parties to a K determines whether a 3rd party has K rights as a 3rd party beneficiary )

Question 8

§ 317 Assignment of a Right

Answer 8

An assignment of a right is a manifestation of the assignor’s intention to transfer it by virtue of which the assignor’s right to performance by the obligor is extinguished in whole or in part and the assignee acquires a right to such performance.

Question 9

Exceptions to Assignment

Answer 9

A right can be assigned UNLESS

(1) it would materially change the duty of the obligor
(2) it would materially increase the burden of risk imposed on him by his K
(3) it would materially impair his chance of obtaining return performance
(4) it would materially reduce its value to him
(5) forbidden by statute
(6) forbidden by the contract

Question 10

Privity of K

Answer 10

In order to enforce K, need to have privity of K

Question 11

How do 3rd party beneficiaries acquire rights?

Answer 11

3rd Party beneficiaries only acquire rights that are given to them.

Question 12

§318 Delegation of a Performance Duty

Answer 12

An obligor can properly delegate the performance of his duty to another UNLESS the delegation is contrary to public policy.

A promise requires performance by a particular person only to the extent that the obligee has a substantial interest in having that person perform.

Niether delegation of performance nor a contract to assume the duty made with the obligor by the person delegated DISCHARGES any duty or liability of the delegating obligor.

Can assign a right and delegate a duty. 
Exceptions:
1) Personal Service K's, cannot be assigned and delegated
2) specific person
3) K or statute says cannot be assigned

Question 13

Can you delegate a personal services K?

Answer 13

NO (considered servitude)

Question 14

Novation

Answer 14

turns 3 parties into 2 (1 of us is no longer responsible)

• a new contract wherein the obligee discharges the obligor from her duties under the K and agrees to accept the delegate as a complete substitute.

Question 15

Withholding consent

Answer 15

Can only be done for a good reason/need to perform in good faith.

Question 16

When 2 party transactions

Answer 16

Promisor/ Promisee

Question 17

When 3 parties to a transaction

Answer 17

Delegator/ Delegatee
Assignor/ Assignee
Obligor/ Obligee

Question 18

Who is the obligor/ obligee?

Answer 18

Obligor- same person as promisor

Oblgiee- can stretch, person who receives the benefit

Question 19

Can a delegator fully relief himself of a duty?

Answer 19

NO. can never fully relief themselves of a duty!!!

Can delegate a duty but still held liable for that duty

Question 20

When can a right be assigned?

Answer 20

In whole or in party by the parties

Question 21

Assignment v. Delegation

Answer 21

assignment- is the transfer of rights under a K

delegation- is the transfer of duties and obligations

Question 22

Delegation

Answer 22

duties can be delegated unless other party to the K has a substantial interest in having the delegating individual perform
(ex: in personal services contract involving special skill or taste)

-When duties are delegated the delegator is not released from liability, and recovery can be had against the delegator if the delegatee does not perform.

• person who transfers the duty= delegator
• person whom the duty is transferred= delegate
• person whom the delegated duty is owed under the original K is the obligee

Question 23

Difference between 3rd party beneficiaries and assigness and delegates?

Answer 23

3rd party beneficiaries acquire their interest at the time of the original contract was formed.
-Assignees and delegates acquire their rights through a later transaction with one of the original contracting parties.

Question 24

Assignment

Answer 24

transfer of a contractual right or benefit.

-Party who transfers the right is the “obligee” under the original K, and upon assignment is called the “assignor”
(obligee=assignor)

-Party who acquires right or benefit is the assignee.

-The party who owes the right under the original K and now owes it to the assignee is called the “obligor”
(obligor=promisor)

Question 25

Tortious Interference

Answer 25

A person who wrongfully and maliciously, with notice interrupts the contractual relationship, commits a wrongful act for which he is responsible at law.

Question 26

Consultant’s Privilege

Answer 26

(1) It is limited to advice w/in the scope of the consultant’s engagement
(2) GOOD FAITH - If consultant does not give honest advice (if he uses engagement to hurt other people exclusively for his own benefit- or out of dislike of his victim- rather than for the benefit of his client) he forfeits the privilege