Business Law- Chapter 15 Flashcards
Privity of Contract
The state of two specified parties being in a contract.
Assignment
The transfer of contractual rights by an obligee to another party.
Assignor
An obligee who transfers a right.
Assignee
A party to whom a right has been transferred.
Anti-assignment clause
A clause that prohibits the assignment of rights under the contract.
Delegation of Duties
A transfer of contractual duties by an obligor to another part for performance.
Delegator
An obligor who has transferred her duty.
Delegatee
A party to whom a duty has been transferred.
Assumption of Duties
A situation in which a delegation of duties contains the term assumption, I assume the duties, or other similar language. In such a case, the delegatee is legally liable to the obligee for nonperformance.
Anti-delegation Clause
A clause that prohibits the delegation of duties under the contract.
Intended Third-party Beneficiary
A third party who is not in privity of contract but who has rights under the contract and can enforce the contract against the promisor.
Donee Beneficiary Contract
A contract entered into with the intent to confer a benefit or gift on an intended third party.
Donee Beneficiary
A third party on whom a benefit is to be conferred.
Creditor Beneficiary Contract
A contract that arises in the following situation: 1. a debtor borrows money, 2. the debtor signs an agreement to pay back the money plus interest, 3. The debtor sells the item to a third party before the loan is paid off, and 4. the third party promises the debtor that she will pay to remainder of the loan to the creditor.
Creditor Beneficiary
An original creditor who becomes a beneficiary under the debtor’s new contract with another party.
Incidental Beneficiary
A party who is unintentionally benefited by other people’s contracts.
Covenant
An unconditional promis to perform
Condition
A qualification of a promise that becomes a covenant if it is met. There are three types of conditions: precedent, subsequent and concurrent.
Condition precedent
A condition that requires the occurrence of an event before a party is obligated to perform a duty under a contract.
Personal Satisfaction Test
A subjective test that applies to contracts involving personal taste and comfort.
Reasonable Person Test
An objective test that applies to commercial contracts involving mechanical fitness.
Condition Subsequent
A condition whose occurrence or nonoccurrence of a spevifiv event automatically excuses the performance of an existing contractual duty to perform.
Concurrent Condition
A condition that exists when the parties to a contract must render performance simultaneously; each party’s absolute duty to perform is conditioned on the other party’s absolute duty to perform.
Implied-in-Fact Condition
A condition that can be implied from the circumstances surrounding a contract and the parties’ conduct.
Novation Agreement
An agreement that substitution a new party for one of the original contraction parties and relieves the exiting party of liability on the contract.
Accord and Satisfaction
The settlement of a contract dispute.
Impossibility of Performance
Nonperformance that is excused if a contract becomes impossible to perform. It must be objective, impossibility, not subjective.
force majeure clause
A clause in a contract which the parties specify certain events that will excuse nonperformance.
Commercial Impracticability
Nonperformance that is excused if an extreme or unexpected development or expense makes it impractical for the promisor to perform.
Statute of Limitations
A statutes that establishes the time period during which a lawsuit must be brought; if the lawsuit must be brought within this period, the injured party loses the right to sue.
