Ch 15 Flashcards
Novation
279
all three people agree
Donee Beneficiary
273
a contract entered into with the intent to confer a benefit or gift on an intended third party
a third party on whom a benefit is to be conferred.
Assignments- American Rule/ English Rule
269 carol has good value and wins american- first one that got assignment english- first one to notify me wins
Incidental beneficiary
275
a party who is unintentionally benefited by other people’s contracts
has no rights to enforce or sue under other people’s contracts
- On December 1, Euphonia, a famous singer, contracted with Boito to sing at Boito’s theater on December 31 for a fee of $25,000 to be paid immediately after the performance.
a. Euphonia, for value received, assigns this fee to Carter.
a. Valid
- On December 1, Euphonia, a famous singer, contracted with Boito to sing at Boito’s theater on December 31 for a fee of $25,000 to be paid immediately after the performance.
b. Euphonia, for value received, assigns this contract to sing to Dumont, an
equally famous singer.
b. Not valid–choice of person (skill)
- On December 1, Euphonia, a famous singer, contracted with Boito to sing at Boito’s theater on December 31 for a fee of $25,000 to be paid immediately after the performance.
c. Boito sells his theater to Edmund and assigns his contract with Euphonia to Edmund.
c. Not valid–choice of person (credit)
- Brown enters into a written contract with Ideal Insurance Company under which, in consideration of Brown’s payment of her premiums, the insurance company promises to pay XYZ College the face amount of the policy, $100,000, on Brown’s death. Brown pays the premiums until her death. Thereafter, XYZ College makes demand for the $100,000, which the insurance company refuses to pay on the ground that XYZ College was not a party to the contract. Can XYZ successfully enforce the contract?
Yes, third party intended beneficiary
3.
Grant and Debbie enter into a contract binding Grant personally to do some delicate cabinetwork. Grant assigns his rights and delegates performance of his duties to Clarence.
a. On being informed of this, Debbie agrees with Clarence, in consideration of Clarence’s promise to do the work, that Debbie will accept Clarence’s work, if properly done, instead of the performance promised by Grant. Later, without cause, Debbie refuses to allow Clarence to proceed with the work, though Clarence is ready to do so, and makes demand on Grant that Grant perform. Grant refuses. Can Clarence recover damages from Debbie? Can Debbie recover from Grant?
Clarence wins Grant wins
3.
Grant and Debbie enter into a contract binding Grant personally to do some delicate cabinetwork. Grant assigns his rights and delegates performance of his duties to Clarence.
b. Debbie refuses to permit Clarence to do the work, employs another carpenter, and brings an action against Grant, claiming as damages the difference between the contract price and the cost to employ the other carpenter. Explain whether Debbie will prevail.
b. Yes, Debbie will prevail - Choice of person
- Rebecca owes Lewis $2,500 due on November 1. On August 15, Lewis assigns this right for value received to Julia, who gives notice on September 10 of the assignment to Rebecca. On August 25, Lewis assigns the same right to Wayne, who in good faith gives value and has no prior knowledge of the assignment by Lewis to Julia. Wayne gives Rebecca notice of the assignment on August 30. What are the rights and obligations of Rebecca, Lewis, Julia, and Wayne?
Majority U.S. Rule (J wins) England-Minority U.S. Rule (W wins)
- On November 23, Sally agreed to sell to Bart her Pontiac automobile for $7,000, delivery and payment to be made on December 1. On November 26, Bart informed Sally that he wished to rescind the contract and would pay Sally $350 if Sally agreed. Sally agreed and took the $350 in cash. On December 1, Bart tendered to Sally $6,650 and demanded that Sally deliver the automobile. Sally refused, and Bart initiated a lawsuit. May Bart enforce the original contract?
No–substituted contract
- Webster, Inc., dealt in automobile accessories at wholesale. Although it manufactured a few items in its own factory, among them windshield wipers, Webster purchased most of its inventory from a large number of other manufacturers. In January, Webster entered into a written contract to sell Hunter 2,000 windshield wipers for $1,900, delivery to be made June 1. In April, Webster’s factory burned to the ground and Webster failed to make delivery on June 1. Hunter, forced to buy windshield wipers elsewhere at a higher price, is now trying to recover damages from Webster. Will Hunter be successful in its claim?
Yes–Hunter wins; but if the windshield wipers had to be manufactured at Webster Inc.’s factory then Hunter would lose.
- Schlosser entered into an agreement to purchase a cooperative apartment from Flynn Company. The written agreement contained the following provision: “This entire agreement is conditioned on Purchaser’s being approved for occupancy by the board of directors of the Cooperative. In the event approval of the Purchaser shall be denied, this agreement shall thereafter be of no further force or effect.” When Schlosser unilaterally revoked her “offer,” Flynn sued for breach of contract. Schlosser claims the approval provision was a condition precedent to the existence of a binding contract and, thus, she was free to revoke. Decision?
Schlosser loses. There was a contract.
- In which of the following situations is specific performance available as a remedy?
a. Mary and Anne enter into a written agreement under which Mary agrees to sell and Anne agrees to buy for $10 per share 100 shares of the 300 shares outstanding of the capital stock of the Infinitesimal Steel Corporation, whose shares are not listed on any exchange and are closely held. Mary refuses to deliver when tendered the $1,000.
yes, it is
