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bar Contracts > 5th issue: Third-Party problems > Flashcards

5th issue: Third-Party problems Flashcards

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1
Q

what do you call a person trying to enforce a K they did not make

A

3rd party beneficiary

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2
Q

how will know 3rd party beneficiary problem

A

look for more than 3 people

- look for 2 people k’ing with common intent to a 3rd party.

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3
Q

vocab: 3rd party beneficiary

A

not a party to K. able to enforce others made for her benefit

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4
Q

vocab: promisor

A

look for person making the PROMISE THAT BENEFITS THE 3rd party beneficiary

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5
Q

vocab: promisee

A

look for person who OBTAINS THE PROMISE THAT BENEFTS 3rd party beneficiary

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6
Q

vocab: intended/ inciddntal

A

only intended beneficiares have contractal rights

- intent of the 2 parties K determines w/e a 3rd party beneficiary is itended or incidential

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7
Q

when will you know a 3rd party beneficiary is intended B

A

always named in K

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8
Q

vocab: creditor/donee

A

usually donees

- Look w/e 3rd party beneficiary was a creditor of the promisee b4 contract

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9
Q

what are the only 3rd party beneficiary that can enforce K

A

INTENDED B’s

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10
Q

what is the test w/e party can cancel 3rd party beneficiary K

A

1) w/e 3rd party beneficiary KNOWS OF AND
2) has relied on or assented as requested
- If both then cannot cancel or modify

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11
Q

does 3rd party beneficiary need BOTH knows of and relied on or assented as requestd to prevent a party from canceling or modifying K

A

YES

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12
Q

4 people who can sue whom

A

1) B can recover from PROMISOR
2) Promisee can recover from promisor
3) GR: B CANNOT recover from promisee
4) LIMITED x/c: creditor B can recover from promisee BUT ONLY on pre-existing debt

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13
Q

can B recover from the promisee

A

NO

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14
Q

what is the x/c that B cannot recover from promisee

A

CREDITOR B can recover from promisee but only on pre-existing debt

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15
Q

defenses for 3rd party B

A

If 3rd party beneficiary sues promisor, promisor can assert any defense that he would have if he had been sued by promisee

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16
Q

generally what is assignment of rights

A

a person trying to enforce a K she did not make

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17
Q

what is an assignment

A

a transfer of rights under a K

1) k b/w only 2 people and
2) one of the people later transfers rights under that K to a 3rd party

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18
Q

vocab: assignor

A

party to K who later transfers rights under the K to another

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19
Q

vocab: assignee:

A

not a party to a K. able to enforce the K b/c of the assignment

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20
Q

obligor

A

other party to the K

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21
Q

what if the K is a prohibition on assignment?

A

if simply says do not assign, only prohibition.

  • assignor is liable for breach of K BUT
    2) assignee who does not know of the prohibition can still enforce the assignment
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22
Q

if the K is a prohibition on assignment can the assignee still enforce assignment

A

assignee who does not know of the prohibition can still enforce the assignment
- assignor is liable for breach

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23
Q

what does it mean for INVALIDATION for assignment

A

takes away BOTH the right to assign and the power to assign

- so there is a breach by the assignor AND no rights to assigne

24
Q

can an assignee enforce INVALIDATION for assignment

A

NO

- takes away both the right to assign and the power to assign

25
Q

ex of INVALIDATION of assignment

A

“all assignment of rights under this K are VOID

26
Q

ex: of prohibition of assignment

A

“rights hereunder are not assignable” does not take away the power to assign

27
Q

if in doubt b/w prohibition or invalidation which to choose

A

prohibition

28
Q

if there is nothing in K regarding assignability what is the rule under CL:

A

even if a K does not any way limit right to assign

CL: BARS an assignment that SUBSTANTIALLY CHANGES the duties of the obligor

29
Q

even if there was no langue limit assingmnet when under CL is it bared

A

if assingmnet SUBSTANTIALLY CHANGES the duties of the oblgior

30
Q

does an assignment right to pay under CL substantial change the duties of obligor

A

NO!!!!

- assingment of the right to pay for a CL is never a substantial change for obligor

31
Q

under CL what substantially changes obligors right

A

assignment of right to K performance OTHER THAN right to payment usually

32
Q

is consideration required or assignment of right

A

GR NO: consideration is NOT required

33
Q

can gratutious assignments be revoked

A

gratutious assignments (and only gratutious assignments( can be revoked

34
Q

whom can sue whom under assignment of writes

A

1) assignee can recover from obligor
2) assignor for CONSIDERATION CANNOT recover from obligor
3) obligor has same defense against assignee as it would against assignor
4) payment by obligor to assignor is effective UNTIL obligor knows of payment
5) implied warranties of assignor is an assignment for consideration

35
Q

can an assignee recover from an obligor if there was an assignment of rights

A

YES

36
Q

can an assignor FOR CONSIDERATION recover from the obligor

A

NO

1) assignment is a TRANSFER
2) that means assignor HAS NO MORE RIGHTS
3) assignment for consideration CANNOT be revoked

37
Q

can an assignment for consideration be revoked

A

NO

38
Q

payment by obligor to assignor effective until when

A

until Obligor KNOWS of assignment

39
Q

are modification agreements b/w obligor and assignor effective if the obligor did not know of the assignment

A

YES

40
Q

what are the implied warranties of assignor in an assignment for CONSIDERATION

A

1) the right assigned actually exists
2) right assigned is not subject to then existing defenses by the obligor
3) the assignor will do nothing after the assignment to IMPAIR the value of the assignment

41
Q

does the implied warranties of assignor in an assignment for CONSIDERATION warrant that obligor will not do anything after assignment

A

NO

42
Q

what to look for with multiple assignments

A

more than 3 names

43
Q

what is the rule for multiple assignments for GRATUITOUS assignments

A

GR: LAST assignee generally wins

  • can make gift assignments w/o consideration
  • can revoke assignment at anytime, therefore the next assignment is treated as revocation of previous assignment
44
Q

what is the GR for multiple assignments for CONSIDERATION

A

FIRST assignee for CONSIDERATION wins

45
Q

does the amount of consideration ever matter in K law

A

NO

46
Q

what is the X/C for multiple assignments for CONSIDERATION (where GR is 1st assignee for consideration wins)

A 
a subsequent assignee takes priority over an earlier assignee for a value only if he BOTH
1) does not know of the earlier assignment and 
2) is the first to obtain 
(a)payment. 
(b) a judgment 
(c) a novation OR
(d) indicia of ownership 
- will hardly ever work 
-
47
Q

In K law, does 1st to notify ever matter?

A

NO

48
Q

what is a delegation

A

is the transfer by a party to a K of his DUTIES or burdens under the K to a 3rd party who was not a party to K

49
Q

what is the difference b/w assignment and delagation

A

1) assignment transfer of his RIGHTS or BENEFITS to 3rd party
2) delegation transfers DUTIES to 3rd party

50
Q

generally which duties are delegable

A

GR: contracutal duties are delegable

51
Q

limitations where duties ARE NOT delegable

A

1) K prohibits delegation OR assignments OR

2) PERSONAL services contracts that call for VERY SPECIAL SKILLS

52
Q

when are personal service contracts not delegable

A

when the PERSONAL service K is for VERY SPECIAL SKILL

- very very limited

53
Q

what if after delegation, the 3rd party delegatee does not perform, is the delegating party remain liable?

A

Yes. DELEGATING PARTY ALWAYS REMAINS LIABLE

54
Q

does a delegating party always remain liable

A

YES

55
Q

what if after delegation, the 3rd party delegatee does not perform, when is a delegatee liable

A

delegatee is ONLY IF they received CONSIDERATION from delegating party

56
Q

what is the rule for a delegating party and their liability if 3rd party does not perform

A

ALWAYS REMAIN LIABLE

57
Q

3 times when 3rd parties rights vest

A

1) when 3rd party learns of K and assents to it
2) when 3rd party learns of K and relies upon it
3) when 3rd party learns of right and sued on K

bar Contracts (8 decks)

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