Chapter 13: Third Party Rights and Discharge

Question 1

The relationship that exists between the promisor and the promisee of a contract

Answer 1

Privity of Contract

Question 2

The transfer of contract rights to a third person

Answer 2

Assignments

Question 3

The transfer to another of all or part of one’s rights arising under a contract

Answer 3

Assignments

Question 4

Assignments are often used in

Answer 4

Business financing

Question 5

A party who transfers his or her rights under a contract to another party

Answer 5

Assignor

Question 6

A party to whom the rights under a contract are transferred or assigned

Answer 6

Assignee

Question 7

One to whom an obligation is owed

Answer 7

Obligee

Question 8

One who owes n obligation to another

Answer 8

Obligor

Question 9

The assignee has a right to demand performance from

Answer 9

the original party to the contract

Question 10

Who has right to demand performance from the original party

Answer 10

Assignee

Question 11

What rights does the assignee obtain?

Answer 11

Only those that the assignor originally had

Question 12

Assignee’s rights are subject to these defenses

Answer 12

The defenses the obligor has against the assignor

Question 13

What rights CANNOT be assigned?

Answer 13

When a Statute Expressly prohibits assignment
When a Contract is Personal in Nature
When an Assignment will significantly change the risk or duties of the obligor
When the contract Prohibits Assignment

Question 14

A contract cannot prevent an assignment of the right to do what?

Answer 14

Receive funds

Question 15

The assignment of ownership rights in real estate often cannot be prohibited. Why?

Answer 15

It is Alienation and seen as contrary to public policy in most states

Question 16

The assignment of these cannot be prohibited

Answer 16

Negotiable instruments

Question 17

The right to receive damages for breach of contract or for payment of an account owed may be assigned even though the sales contract

Answer 17

Prohibits such an assignment

Question 18

The third party should notify whom of the assignment?

Answer 18

The Obligor

Question 19

Who should notify the obligor of the assignment?

Answer 19

The third party

Question 20

Priority is given to whom?

Answer 20

The first assignee who gives notice

Question 21

Until the obligor has notice, the obligor can discharge to the assignor how?

Answer 21

By performance to assignor

Question 22

The transfer to another of all or part of one’s duties arising under a contract

Answer 22

Delegation of duties

Question 23

Delegation does not relieve the party making the delegation of what?

Answer 23

The obligation to perform

Question 24

A party who transfers her or his obligations under a contract to another party

Answer 24

Delegator

Question 25

A party to whom contractual obligations are transferred, or delegated

Answer 25

Delegatee

Question 26

no special form is required to create a valid

Answer 26

Delegation of duties

Question 27

What duties cannot be delegated?

Answer 27

When the performance depends on the personal skill or talents of the obligor When special trust has been placed in the obligor When performance by a third party will vary materially from that expected by the obligee When the contract expressly prohibits delegation

Question 28

The obligee must accept performance from whom?

Answer 28

Delegatee

Question 29

Delegation does not relieve whom of the obligations under the contract?

Answer 29

Delegator

Question 30

In a bilateral contract, who is the promisor?

Answer 30

Both parties

Question 31

Courts determine the identity of the promisor by asking which party made the promise that benefits the third party

Answer 31

Third Party Beneficiary Contracts

Question 32

Privity of contract must exist in this contract

Answer 32

Third Party Beneficiary Contracts

Question 33

When does privity of contract not need to exist with third party beneficiary contracts?

Answer 33

When the original parties, at the time of contracting, that the contract performance directly benefit a third person

Question 34

One for whose benefit a promise is made in a contract but who is not a party to the contract

Answer 34

Third Party Beneficiary

Question 35

A third party for whose benefit a contract is formed

Answer 35

Intended Beneficiary

Question 36

Benefits from a contract in which one party promises another party to pay a debt that the promise owes to a third party

Answer 36

Creditor Beneficiary

Question 37

Contract is made for the express purpose of giving a gift to a third party

Answer 37

Donee Beneficiary

Question 38

The rights have taken effect and cannot be taken away

Answer 38

Vested

Question 39

When do the rights of an Intended Beneficiary Vest?

Answer 39

Third party demonstrates express consent to the agreement Third party materially alters his or her position in detrimental reliance on the contract Conditions for vesting are satisfied

Question 40

A third party who benefits from a contract even though the contract was not formed for that purpose

Answer 40

Incidental Benefficiary

Question 41

Incidental beneficiary has no rights in the contract and cannot

Answer 41

Sue to have it enforced

Question 42

The termination of an obligation such as occurs when the parties to a contract have fully performed their contractual obligations

Answer 42

Contract Discharde

Question 43

The fulfillment of one's duties under a contract

Answer 43

Performance

Question 44

What is the normal way of discharging one's contractual obligations

Answer 44

Performance

Question 45

Must be performed, or the party promising the act will be in breach of contract

Answer 45

Absolute Promises

Question 46

A qualification, provision, or clause in a contractual agreement, the occurrence or nonoccurrence of which creates, suspends, or terminates the obligations of the contracting parties

Answer 46

Condition

Question 47

A condition in a contract that must be met before a party's promise becomes absolute

Answer 47

Conditions Precedent

Question 48

Precedes the absolute duty to perform

Answer 48

Conditions Precedent

Question 49

A condition in a contract that, if it occurs, operates to terminate a party's absolute promise to perform

Answer 49

Conditions Subsequent

Question 50

Condition follows the absolute duty to perform

Answer 50

Conditions Subsequent

Question 51

Conditions that must occur or be performed at the same time

Answer 51

Concurrent Conditions

Question 52

They are mutually dependent

Answer 52

Concurrent Conditions

Question 53

No obligations arise until these conditions are simultaneously performed

Answer 53

Concurrent Conditions

Question 54

An unconditional offer to perform an obligation by a person who is ready, willing, and able to do so

Answer 54

Tender

Question 55

If the other party refuses to perform, the party making the tender can consider the duty discharged and do what?

Answer 55

Sue for breach of contract

Question 56

Conditions expressly stated in the contract must fully occur in all aspects for complete performance

Answer 56

Complete Performance

Question 57

Any deviation breaches the contract and discharges the other party's obligations to perform

Answer 57

Complete Performance

Question 58

A party who in good faith performs substantially all of the terms of a contract can enforce the contract under this doctrine

Answer 58

Substantial Performance

Question 59

Agreement to settle a debt

Answer 59

Accord

Question 60

An executory contract to perform some act to satisfy the existing contractual duty

Answer 60

Accord

Question 61

Payment of debt

Answer 61

Satisfaction

Question 62

The performance of the accord of agreement

Answer 62

Satisfaction

Question 63

Attempts to allocate the debtor's assets to the creditors in a fair and equitable fashion

Answer 63

Bankruptcy

Question 64

Bankruptcy bars the creditors from

Answer 64

enforcing most of the debtor's contracts

Question 65

doctrine under which a party to a contract is relieved of his or her duty to perform when performance becomes objectively impossible or totally impracticable

Answer 65

Impossibility of Performance

Question 66

Impossibility is only applied when the parties could not have _______________ the event or events that rendered performance impossible

Answer 66

Reasonably foreseen

Question 67

What are the 3 types of impossibility of performance?

Answer 67

When a party whose personal performance is essential to the completion of the contract dies or becomes incapacitated prior to performance When the specific subject matter of the contract is destroyed When a change in the law renders performance illegal

Question 68

Suspends performance until the impossibility ceases

Answer 68

Temporary Impossibility

Question 69

Courts may excuse parties from their performance obligations when the performance becomes more difficult or expensive than the parties originally contemplated at the time the contract was formed

Answer 69

Commercial Impracability

Question 70

A court-created doctrine under which a party to a contract will be relieved of her or his duty to perform when the objective purpose for performance no longer exists, due to reasons beyond the party's control

Answer 70

Frustration of Purpose