Contracts-3PB and Remedies Flashcards
3PB Relationship Generally
A (promisee) contracts with B (promisor) such that B must perform for C (3P beneficiary)
Who can sue?
Intended beneficiaries, not incidental beneficiaries.
3P must
1) Receive performance directly from promisor,
2) Be expressly designated in the K, or
3) Have a relationship with the promisee implying to benefit
When does right to sue vest?
When 3PB
1) Brings suit to enforce,
2) Changes position in reliance on K,
3) Manifests assent to K at request of promisee or promisor, OR
4) Expressly vested under K
Assignment of right: Description
X (obligor) contracts with Y (assignor); Y assigns right to X’s performance to Z (assignee)
Assignment of right: 3P rights/obligations
Pts may only assign rights that they could breach themselves. Assignee steps into assignor’s shoes
What is not assignable?
1) Would substantially change obligor duty or risk (e.g. personal svc K where service is unique
2) assignment of rights in future K
3) prohibited by law
What does anti-assignment clause prevent?
AA clause only prevents transfer of duties but not right to performance.
Assignor may be liable for breach, but assignee may enforce (obligor must still perform for assignee)
Privity effect of assignment of right
Establishes privity of K b/w obligor and assignee
Removes original privity b/w obligor and assignor
Liabilities for assignment: what can assignee sue obligor and assignor for?
Assignee may sue obligor (under assignee’s rights) and assignor (implied warranties: assignor will do nothing to impair value of assignment; assignor has actual right to assign)
Delegation of duty: description
Y (obligor/delegator) promises to perform for X (obligee); Y delegates its duty to Z (delegatee)
Delegation of duty: 3P rights/obligations
3P agrees to satisfy a performance obligation owed by one of the parties to a K
What is not delegable?
1) involve personal judgment/skill
2) requirement and output K
3) special trust in delegator
4) K limitation
Delegation: Effects: What must obligee (recipient of promise to perform obligation) accept in terms of performance
Obligee must accept performance from delegatee of all duties that may be delegated.
Delegation: Liabilities: Can delegator be used by obligee (recipient of promise to perform obligation)?
Delegator may still be sued by obligee absent novation (expressly releasing delegator)
Delegation: Liabilities: Can delegatee be sued by delegator or obligee (receipient of promise to perform obligation)?
Delegatees who receive consideration from delegator may be sued by delegator or obligee.
