Ch 17 Third Party Rights

Question 1

Privity of contract + exceptions (3)

Answer 1

parties who have entered into a contract alone have right and liabilitys under the contract
product liability laws, assignment/delegation, third party beneficiary

Question 2

assignments, people involved, effects (2)

Answer 2

transfer of contractual rights to a third party
assignor, assigne, obligee, obligor
1. extinguishes the rights of the assignor
2. assignees rights are subject to the same defenses

Question 3

Rights that cannot be assigned (5)

Answer 3

1. prohibited by statute
2. US gov contracts
3. contract for personal services - unless all that remains is monetary payment
4. assignment significantly changes risk/duties of the obligor
5. contract prohibits assignment

Question 4

limitations to prohibiting assignment (3)

Answer 4

cannot prevent assignment of right to recieve funds ; right in real estate; negotiable instruments like checks and promissory notes

Question 5

(assignment) priority?

Answer 5

maj: 1st assignment in time is first in right
min: first assignee who gives notice

Question 6

(assignment) discharge by performance to the wrong party

Answer 6

until obligor has notice of assignment, obligor can discharge their obligation by perf to assignor

Question 7

Delegation

Answer 7

transfer of contractual duties to a third party, doesnt relieve delegator of obligation to perform if delegatee fails to do so

Question 8

when duties cannot be delegated (3)

Answer 8

1. when special trust has been placed in the obligor or when perf depends on personal skill or talents of the obligor 2. perf by a 3rd party will vary materially from that expected by the obligee 3. contract expressly prohibits delegation

Question 9

third party beneficiaries

Answer 9

• for whose benefit a promise = made in a contract but who - not party to the contract, can sue the promisor directly for breach of the contract

Question 10

promisor

Answer 10

party who made the promise that benefits the 3rd party

Question 11

types of intended beneficiaries (2-> 4)

Answer 11

Creditor and donee
1. benefits fr contract in whichpromisor promises promisee to fulfill duty that promisee owes to [t]
2. when contract - made as gift to [t], [t] can sue promsor directly to enforce the promise
intended and incidental (more commonly used as classification)
2. 3rd * who recieves benefir fr contract even though that *’s benefit X the reason the contract - made, cannot sue

Question 12

vested

Answer 12

right have taken effect and cannot be taken away

Question 13

Rights of 3rd parties vest when:

Answer 13

3rd party demonstrates express consent to agreement acknowledging awareness of and consent to contract formed for their benefit
3rd party materially alters their position in detrimental reliance on the contract
when conditions for vesting are satisfied

Question 14

How to tell the difference between intended v incidental beneficiaries (1->3)

Answer 14

reasonable person test: would a reasonable person in the position of the beneficiary believe that the promisee intedned to confer on the beneficiary the right to enforce the contract
1. perf is rendered directly to 3rd *, 2. 3rd * has right to control details o perf 3. 3rd * expressly designated as beneficiary in contract