Contracts Flashcards
1
Q
Steps to analyze a contracts essay
A
Mutual assent - objective
consideration or substitute consideration
defenses
Statute of Frauds
2
Q
If contract is a mix of goods and services, do you apply UCC or common law?
A
- look at predominant purpose
- both CL and UCC cannot govern at the same time
3
Q
What do you need for a valid offer?
A
Offeror must
- Manifest an OBJECTIVE willingness to enter into a contract and
- Create a power of acceptance in offeree
4
Q
Are contest offers and reward offers valid?
A
Yes. Normally you need the offer to be directed to a specific offeree, but this is an exception
5
Q
Are advertisements considered offers?
A
No, they are an invitation to deal.
However, if they are very specific and leave nothing open to negotiation, they can be considered offers.
6
Q
Under CL, what MUST be part of offer to be valid?
A
Parties
Subject
Quantity and
Price
7
Q
Under UCC, what MUST be part of offer to be valid?
A
Parties
Subject
Quantity
8
Q
What contracts are valid under UCC even if they don’t have QUANTITY
A
Requirements and outputs contracts
9
Q
When is an offer terminated
A
If any of the following occur before acceptance:
- Offeror REVOKES by express communication
- Offeree learns that offeror has taken action ABSOLUTELY INCONSISTENT with a continuing ability to contract
- Offeree REJECTS offer by express communication
- Offeree counteroffers
- Offeror dies
- A reasonable amount of time has passed
- Subject matter becomes iilegal or destroyed
10
Q
What types of offers are irrevocable?
A
- Option contracts - where consideration is given to keep offer open
- Firm offers- UCC
- Offeree has started performance on unilateral offer
- Detrimental reliance - offeree reasonably and detrimentally relies in a forseeable manner
Eg. of detrimental reliance - construction bid becomes revocable offer when GC uses bid to submit proposal to owner
11
Q
What is a unilateral offer?
A
An offer requests acceptance by an action (performance).
-start of performance makes offer revocable, but offer is only accepted once performance is complete
12
Q
What is a bilateral offer?
A
Can accept by performance or promise
-start of performance manifests acceptance
13
Q
Requirements of firm offer under the UCC?
A
Must:
- Be in writing;
- contain an explicit promise not to revoke; and be
- signed by merchant
Firm offers are held open for a reasonable time not to exceed 90 days
14
Q
What is an acceptance?
A
Manifestation of a willingness to enter into an agreement by the offeree
OBJECTIVE TEST
15
Q
Can silence constitute acceptance?
A
No, unless there is a past history of silence serving as acceptance
16
Q
Can an offer be accepted or revived after it is revoked?
A
No
17
Q
What does the mailbox rule establish?
A
The moment in time that an acceptance becomes effective
18
Q
What is the mailbox rule
A
An acceptance sent by mail, email or fax is valid at the moment of DISPATCH
19
Q
Exceptions to mailbox rule
A
- if offeree uses wrong address or postage
- offeror expressly states that acceptance is valid upon receipt
- an option contract is involved
4. Offeree sends termination letter BEFORE acceptance- whichever is received first controls
5. Offeror detrimentally relies on rejection BEFORE he receives acceptance
20
Q
What does a counteroffer do to the original offer?
A
Counteroffer is a termination that rejects the original offer and forms a new offer
21
Q
Mirror Image Rule under Common Law
A
Terms of acceptance MUST match offer exactly, or it is not an acceptance
22
Q
Under UCC does acceptance have to match offer?
A
No
23
Q
What is two step process under UCC to determine whether purported acceptance is an acceptance or new offer?
A
- Determine whether there has been an acceptance
2. Determine what terms control
24
Q
If purported acceptance contains new or additional terms, how to determine if it is ACCEPTANCE?
A
Purported acceptance must be:
- A definite and seasonable expression of acceptance or written confirmation.
- Sent w/in a reasonable time;
- Operates as an acceptance even if new/add’l terms
- UNLESS acceptance is expressly made conditioned on new terms
25
If there is acceptance, do ADDITIONAL TERMS become part of K?
If both parties are merchants, terms become part of K UNLESS
1. Offer expressly limited to acceptance by its terms
2. Additional terms materially alter deal OR
3. Offeror objects within a reasonable amount of time
26
If an exception applies, what happens to additional terms?
They are knocked out and you use UCC gap fillers.
Remember, if exception applies, there is still acceptance - this just decides terms.
**If both parties are not merchants, use gapfillers, and terms of offer control
27
If there is acceptance, do DIFFERENT TERMS become part of K?
In Florida, use same analysis as additional terms.
Majority rule - knockout rule - different terms knock each other out and gapfillers apply
28
What if offer and acceptance don't match but the parties perform?
Under UCC, court will "frankenstein" the contract - cobble something together
29
When is consideration present?
1. When promisee incurs a legal determent OR promisor receives a legal benefit AND
2. The promise induces the detriment and the detriment induces the promise
30
Are gift promises consideration?
No
31
Are preexisting legal duties consideration?
No. Can't agree to pay someone not to smoke crack
32
Is past consideration sufficient?
No.
33
Is an illusory promise consideration?
"I'll buy your truck if I feel like it"
| Not consideration
34
Is a promise to pay a debt barred by the SOL enforceable?
Yes if it is in writing and signed by the party to be charged
35
Does a contract modification need to be supported by consideration under CL?
YES!! Even if both parties agree to the modification without it - IT IS unenforceable.
EXCEPTIONS:
-promise ratifies a voidable obligation
-promise is made to a third party
-there is an honest dispute as to whether a duty owed
36
Does a contract modification need to be supported by consideration under UCC?
No, s/l/a the modification is made in good faith
37
Under CL, how can you argue that modification is enforceable even if not supported by consideration?
- unforseen difficulties in K that make performance impractical - argue that performance is new consideration
- in lease, can pay in advance as new consideration
38
If you do not have an enforceable contract, what theories still allow you to recover?
1. Promissory Estoppel
2. Quasi-contract
3. Moral obligation plus subsequent promise
39
What is the doctrine of promissory estoppel?
Promises that lack consideration may still be enforced if:
1. Promisor should reasonably expect the promise to induce action or forbearance (forseeability)
2. Promise does induce such action or forbearance (detrimental reliance) AND
3. Injustice can only be avoided by enforcement of promise.
E.g. charitable donation
**Can be used too supply consideration and to defeat SOL defense
40
What damages are recoverable under the doctrine of promissory estoppel?
RELIANCE DAMAGES - Monetary value of losses incurred in RELIANCE on promise
41
Doctrine of Quasi -contract
Contracts that lack consideration may still be enforced if:
1. P confers a measurable benefit;
2. P reasonably expected to get paid AND
3. It would be unfair to let D keep benefit without paying ("unjust enrichment")
**necessaries for minors covered at FMV
42
What damages are recoverable under the doctrine of quasi contract
RESTITUTION - an amount equal to the economic benefit that plaintiff conferred on defendant
43
Can P recover under the quasi contract theory from an unconscious D
Yes, P ccan recover for providing help.
But NOT from "officious intermeddler" e.g., house painter
44
Elements of implied-in-fact contract are the same as __________
Quasi-K
| We are looking for ways to infer mutual assent
45
What are the defenses to contract formation that make contract VOIDABLE?
1. Incapacity
2. Mistake
3. Misrepresentation
4. Undue Influence
5. Unconscionability
6. duress - threat, anything but physical
46
What are the defenses to contract formation that make contract VOID?
1. Duress - physical threat
| 2. Illegality
47
What are the three types of incapacity?
1. Infancy
2. Intoxication
3. Mental Illness
48
Infancy
Contracts with minors are voidable. Minor can either upon turning 18:
1. Rescind K and avoid liability (must take steps w/in a reasonable time) OR
2. Affirm K and hold other party liable - can do this expressly or impliedly by failing to disaffirm w/in a reasonable time
49
If minor rescinds contract, what is he liable for?
He must return anything he received, and he is liable for FMV of goods/services received for NECESSITIES
50
In Florida, does marriage remove defense of incapacity?
Yes, even if marriage is later dissolved or terminated
51
When is a contract with a mentally ill person voidable?
When by reason of mental illness a party is unable to:
1. Understand in a reasonable manner the nature and consequences of a transaction OR
2. Act in a reasonable manner in relation to the transaction and other party has reason to know of condition
52
When can a mentally ill person disaffirm a contract?
- When he is lucid. However he CANNOT disaffirm if:
1. contract was fair on its terms
2. other party did not know of mental defect
53
When is a contract with a mentally ill person VOID
if the party is adjudicated incompetent
54
When is a contract with an intoxicated person voidable
Voidable if the OTHER PARTY has reason to know AND the party is unable to:
1. Understand in a reasonable manner the nature and consequences of a transaction OR
2. Act in a reasonable manner in relation to the transaction and other party has reason to know of condition
55
When does a mutual mistake occur?
-when both parties are mistaken as to the basic assumption on which the agreement is made
56
When can a party rescind a deal based on mutual mistake?
If:
1. there is a mistake of fact existing at the time deal was made (not opinion)
2. Mistake relates to basic assumption of K;
3. Mistake has a material impact and
4. Impacted party did not assume risk of mistake
57
When does impacted party assume risk of mistake?
1. Conscious ignorance - when he is aware he only has limited knowledge but proceeds anyway
2. Risk is allocated by agreement ("as is")
58
When does a unilateral mistake occur
A mistake by one party that is unknown the to other party
| Eg. buy software for computer that is not compatible
59
When can a party rescind a deal based on unilateral mistake?
If:
1. there is a mistake of fact existing at the time deal was made (not opinion)
2. Mistake relates to basic assumption of K;
3. Mistake has a material impact and
4. Impacted party did not assume risk of mistake AND
5. Mistake would make contract unconscionable OR the other side knew of, had reason to know, or caused mistake. E.g. formula price is faulty.
60
When does Ambiguity make contract voidable?
Both parties know/should know: No k unless both parties intended same meaning
One party knows/should know: Binding K based on ignorant party's reasonable interpretation.
LOOK AT SUBJECTIVE INTENT
61
What if there is a misunderstanding as to K terms?
No K unless both parties have the same meaning
62
In Florida, defense of incapacity because of infancy removed in the following cases
1. minors 16 and up can take out student loans
2. minors can participate in federal loans for home, farm business
3. can contract for medical services for pregnancy
4. If minor fraudulently induced party to enter into K by lying about age, he can be estopped from raising legal capacity as a defense
63
To assert defense based on misrepresentation, what must party show?
1. Misrepresentation of present fact (not opinion)
2. Material or fraudulent w/intent to induce assent AND
3. Made under circumstances in which it is justifiable to rely (puffery not actionable)
MATERIAL = likely to induce REASONABLE party or maker knows it is likely to induce THIS party
64
If there is Fraud In Factum, Is contract void or voidable?
Void
65
What threats make K voidable due to duress?
1. What is threatened is a crime or tort
2. Threatened criminal prosecution
3. Threatened use of civil process AND bad faith
4. Threat is breach of duty of good faith and fair dealing
66
When is a contract voidable due to undue influence
If the affected party's assent was induced:
1. Due to his susceptibility to pressure AND
2. Other side's application of excessive pressure
* differences in bargaining power; pressure to move fast or not consult others
67
When is a contract void for illegality
If consideration or performance is illegal or contrary to public policy.
-contract entered into in furtherance of illegal purpose is enforceable (hiring unsuspecting taxi driver to get somewhere to commit murder)
68
What if contract was legal when performed and subsequently becomes illegal?
performance will be discharged
69
If only a portion of contract is illegal can you enforce the rest?
Yes, if contract is divisible
70
When is a contract voidable due to unconscionability
-if it is so oppressive that it SHOCKS THE CONSCIENCE
Procedural unconscionability - defect in bargaining process
2. Substantive unconscionability - -terms of deal are grossly unfair
**Tested at time contract was made
71
What types of contracts trigger SOF?
```
Marriage (e.g., prenup)
Year
Land (N/A to construction projects)
Executor
Goods - USS $500 or more
Suretyship - promise to guarantee debt of another
```
72
What to remember about one year provision of SOF
- there must be NO WAY for K to be performed w/in a year
- If K doesn't have time period, it probably does not trigger SOF
- one year starts at formation (important for lease)
73
Does SOF apply to modifications?
ONLY IF K as modified falls w/in SOF
74
Once SOF is triggered, how can you satisfy it?
1. Writing
| 2. Performace
75
When will a writing satisfy SOF
1. Signed by party to be charged;
2. Shows that K was formed;
3. Includes requisite terms (remember no price under USS)
76
Satisfaction of SOF by performance
| -Services contracts under one year provision
FULL PERFORMANCE req'd
| -part performance not enough
77
Satisfaction of SOF by performance
| Contracts re: Real Estate
1. Seller fully performs OR
2. Proof that oral contract was made, PLUS
Buyer has possession AND made all or part payment and AND valuable and permanent improvements OR proof if no improvements, proof that transaction would be a fraud if purchaser not entitled to enforce
Buyer can only get equitable relief
78
Satisfaction of SOF by performance
UCC contracts for sale of goods over $500
PAWS
1. Performance - for quantity of goods for which payment has been made or accepted, or goods received and accepted.
2. Admission in court - pleadings, testimony
3. Written confirmation of merchants
4. Specially manufactured goods - when seller makes substantial beginning towards manufacture of custom goods
79
What will satisfy the requirement of a written confirmation of merchants?
1. After an oral agreement between merchants;
2. either party sends written conformation of the oral contract (signed by sender)
3. received by other party UNLESS
4. receiving party sends notice of objection w/in 10 days
80
What is an integration?
When parties to a contract express their agreement in writing with the intent that it embody the final expression of their bargain
81
What is a complete integration?
-expresses all the terms of the parties' agreement
82
Is parol evidence admissible where there has been complete integration?
NO. all other expressions, whether oral or in writing are inadmissible.
83
What is a partial integration?
-contains some terms but not all of the terms.
84
Is parol evidence admissible where there has been partial integration?
Other expressions, whether oral or in writing are admissible to SUPPLEMENT the writing, s/l/a the evidence does not contradict.
85
Parol Evidence Rule does not apply to proof of these issues:
1. Defenses to formation of K
2. Separate deals/contracts
3. condition precedent
4. ambiguity and interpretation
5. contract modifications/agreements made after initial agreement
6. Reformation due to mistake
7. Under UCC, contract may be supplemented by evidence of:
- trade usage
- course of dealing
- course of performance
86
Warranties available under the UCC and CL
1. Express warranties
2. Implied Warranty of Merchantability - UCC only
3. Implied warranty of fitness for a particular purpose
Seller is in breach of contract if he breaches warranty
87
How are express warranties created by seller? (any seller - not just UCC)
1. Any affirmation of fact or promise made by seller to buyer creates an express warranty that goods shall conform to the affirmation or promise
2. Any description of goods which is made part of basis of bargain creates an express warranty that goods shall conform to the description
3. Any sample or model which is made part of basis of bargain creates an express warranty that goods shall conform to the sample or model
88
Are disclaimers of express warranties permitted?
Disclaimers that grossly conflict with express warranties are unenforceable.
Eg. "All warranties, express or implied, are disclaimed"
89
Implied warranty of Merchantability (UCC)
All merchants have an implied warranty that the goods being sold are fit for their ordinary commercial purpose
Merchants are liable for breach of contract if warranty is violated
90
Are disclaimers of Implied warranty of Merchantability permitted?
Yes, if language is CONSPICIOUS.
-orally, you must use term "merchantability"
"as is"
"with all faults" is ok.
91
What action by BUYER will defeat the Implied warranty of Merchantability
If buyer has examined the goods or refused to examine the goods, there is not warranty w/r/t defects that an examination would have revealed to buyer
92
Implied warranty of Fitness for a Particular Purpose (any seller, not just UCC)
Warranty exists where seller knows buyer has a particular use for the goods and buyer is relying on seller's skill to select goods.
93
Are disclaimers of Implied warranty Fitness for a Particular Purpose
Yes, if language is CONSPICIOUS and IN WRITING
-"as is"
"with all faults"
94
Damages for breach of warranty
Value of goods as warranted minus value of goods as accepted.
95
What is an express condition in a contract?
- way to shift risk by stating that one party's contractual obligations will only kick in if some future event takes place
- look for language like - "only if" , "provided that", "on the condition that"
- makes performance conditional upon completion of condition
96
Must express conditions be satisfied for contract to be enforceable ?
Yes, express conditions must be satisfied strictly unless the condition is excused by waiver:
1. party receiving protection of condition waives the condition with words or conduct OR
2. . party receiving protection of condition wrongfully interferes or hinders occurrence - good faith standard OR
3. Estoppel - if you waive condition and they reasonably rely
97
How do you know whether a personal satisfaction condition has been satisfied
E.g. I will pay $100 for the painting you create if I love it.
Reasonable person standard
98
When is substantial performance of contract required?
1. Can't sue for breach unless you have substantially performed.
2. A material breach by other party excused performance,
3. A NON material breach does not excuse performance, but you can still get damages
99
In service contracts, is the failure to be completed by a certain date a material breach
No, unless K says time is of the essence
100
In Florida, SOF also applies to:
1. health care guarantees
2. debts barred by SOL
3. newspaper subscriptions
4. Home solicitation sales
5. Home improvement contracts
6. Credit agreements
101
What is the perfect tender rule under UCC
| applies unless K says otherwise
Seller must deliver conforming goods + perfect delivery
| -The SMALLEST nonconformity is a breach that allows the buyer to reject all or a portion of the goods.
102
Three exceptions to the Perfect Tender Rule
1. K says otherwise
2. Installment contracts do not have to satisfy perfect tender - buyer can reject specific installment when there is a substantial impairment that cannot be cured (otherwise apply CL)
3. If seller fails to tender perfect goods, buyer MUST give seller a chance to cure if :
- -time for performance has not yet expired OR
- -there is reasonable grounds to believe that buyer would accept a replacement for nonconformity (usually prior dealings between parties)
103
When is buyer deemed to have ACCEPTED non conforming goods?
If buyer fails to reject after having a reasonable opportunity to inspect.
104
When can buyer REVOKE acceptance of nonconforming goods?
If:
1. Nonconformity substantially impairs the value of the goods;
2. Revocation occurs within a reasonable time AND
3. Buyer accepted the goods on seller's assurances that they were ok
105
What are excuses for nonperformance?
1. Impossibility and Impracticability
2. Frustration of purpose
3. Accord and satisfaction
4. Novation
106
Impossibility and Impracticability
A party's duty to perform is discharged if:
1. an unforeseen event occurs that makes performance extremely difficult or impossible;
2. Non occurence of event was basic assumption of contract AND
3. Party seeking discharge was not at fault/
E.g., hired skilled artist who dies
subject matter of K is destroyed
construction fact patters - modification does not require add'l consideration
* *It's something less than impossible
* *Increase in price of raw materials not enough
107
Frustration of Purpose
A party's duty to perform is discharged if:
1. Unexpected events arise that detsro'y one party's purpose (even if performance is still possible);
2. The event is NOT fault of frustrated party and
3. Non occurrence of event was basic assumption of contract
E.g. Taylor Swift gets sick and can't perform at concert in amusement park
108
Accord and satisfaction
A party's duty to perform is discharged if there is an accord and satisfaction.
Accord - agreement to accept alternate performance to discharge a preexisting duty
Satisfaction - subsequent performance of accord
109
Does the doctrine of accord and satisfaction apply to check that says "Payment In Full"
No, unless there is a good faith dispute as to the validity of the claim
110
Novation
BOTH parties agree to excuse original promisor from performance and substitute someone else.
111
Do courts have discretion to decline to enforce attorney's fees provisions In Fla?
No, not anymore than other contract provisions
112
Are forum selection clauses enforceable in Florida?
Presumptively valid absent a showing that enforcement would be unreasonable or unjust
113
Discharge by substituted contract
Parties to one contract enter into a second contract that immediately revokes the first contract either expressly or impliedly (e.g. if terms are inconsistent)
-only applies if immediate discharge of first contract is intended.
114
What is divisibility of a contract
If one party performs one unit of a divisible contract, he is entitled to the agreed-on equivalent for that unit even if he fails to perform other units
115
How do you know whether a contract is divisible?
1. performance of each party is divided into two or more parts under the contract;
2. the number of parts due from each party is the same; and
3. each performance is the quid pro quo of the other
116
What type if breach discharges the duty to perform
A material breach.
117
Factors considered in determining a material breach
1. extent to which nonbreaching party received the substantial benefit he could have anticipated with full performance
2. extent to which nonbreaching party can be compensated in damages
3. extent to which nonbreaching party completed performance or made preparation hterefor.
4. hardship on parties should K be terminated
5. negligent or willful behavior of breaching party
6. likelihood that breaching party will continue performance
118
Does a minor breach entitle you to cancel contract?
No, but you can get damages
119
When does risk of loss transfer on an FOB contract
-when goods reach specified destination
120
When does risk of loss transfer if goods aren't shipped?
If seller is a merchant, risk passes when buyer takes physical possession.
If seller is not a merchant, risk passes on tender of delivery of goods
121
When does risk of loss transfer if goods are shipped?
When seller turns over goods to common carrier unless K says otherwise
122
When does anticipatory repudiation occur under the CL?
When a promisor CLEARLY and UNEQUIVOCALLY repudiates a promise before the time for performance is due (by words or conduct)
123
Under CL, repudiation may be retracted until WHEN
Until the promisee
1. acts in reliance on the repudiation
2. signifies acceptance of the repudiation OR
3. Commences an action for breach of K
124
When does anticipatory repudiation occur under the UCC?
1. Buyer or seller makes unequivocal refusal to perform
OR
2. Reasonable grounds for insecurity arise regarding either party's willingness or ability to perform AND repudiating party fails to give reasonable assurances within a reasonable time not to exceed 30 days upon demand for such assurances
125
Under UCC, repudiation may be retracted until WHEN
Until non repudiating party cancels the contract or materially changes position
126
When an anticipatory repudiation occurs, what can the non-repudiating party do?
1. Treat the repudiation as a breach and sue for damages (after time for payment has passed if that's all that is left to do) OR
2. Ignore the repudiation, urge performance and see what happens - although nonreepudiating party cannot keep performing if it increases damages.
127
Goal of expectation damages
To put non-breaching party in same economic position it would be in if K had been performed.
128
Standard of proof for expectation damages
Reasonable certainty
129
Can you collect unforseeable consequential damages as part of expectation damages
No, unless breaching party had some reason to know about the possibility of the unforseeable damages
130
Formula for expectation damages
Seller: difference between contract price and market price
Buyer: difference between contract price and cost of replacement goods
131
What are general damages?
Type of losses anyone would suffer from a breach
132
What are consequential damages?
Type of losses unique or special to this plaintiff
133
What is the goal of reliance damages and when are they used?
goal is to put non breaching party in the same economic position that it would be in if contract had never been created
- cannot get both expectation and reliance
- used when reliance too speculative
- recovered under doctrine of promissory estoppel
** Ad in paper to sell truck. If ad not placed, can't get amt for truck, only for ad
134
What is the goal of restitution damages?
To prevent unjust enrichment
- gives P an amount equal to the benefit the P has conferred on the D
- cannot get both expectation and restitution
- used in quasi-k cases and for minor's necessaries
- "Refund"
- E.g. pain the house and owner doesn't pay
135
What are liquidated damages and when will court award them
-specified in contract and expressly state an amount due upon breach
Courts wary to award and will only do so if:
-amount is reasonable at time of contracting; AND
-actual damages from breach would be uncertain in amount and difficult to prove
136
Punitive damages
- to punish D
| - generally not awarded in K situations
137
Specific performance
- only awarded for one-of-a-kind goods or land, when $$ damages would be inadequate
- CANNOT force someone to perform under a service contract, although can enjoin them from performing for someone else.
138
Is there a duty to mitigate damages?
YES! Otherwise court can reduce damages by the amount that could have been avoided had P taken reasonable steps to mitigate his losses.
139
What is recission?
Cancelling of a contract so as to restore parties to the positions they had before K was made. Can seek to rescind for a variety of reasons - mutual mistake, fraud, misrepresentation.
-can also occur by mutual agreement of the parties.
140
What is the right of replevin under the UCC
A seller may reclaim goods she sent buyer if:
1. When buyer receives goods on credit and is insolvent, seller may reclaim goods if demand is made w/in 10 days of buyer's receipt of goods (10 day limitation n/a if buyer misrepresented solvency in the 3 months before delivery) OR
2. If buyer pays with check that was subsequently dishonored.
141
What is an intended third party beneficiary?
- NOT a party to the contract
- has rights under K because parties INTENDED to benefit the identified third party
- HE HAS THE RIGHT TO SUE for breach of K
Eg., Tom agrees to pay M $500 to fix G's truck. G is intended benef.
142
If intended benef sues party to contract, what defenses can party assert
Any defenses he could assert against the other party to the contract
143
What is an incidental third party beneficiary?
- NOT a party to the contract
- just so happens to benefit
- Purpose of K WAS NOT to benefit them, so no legal rights.
- cannot sue for breach of K
144
When can the original parties revoke or modify the third party beneficiary's rights?
Up until rights vest.
Rights VEST when TPB has:
1. Detrimentally relied on K;
2. Accepted the benefit under the K; OR
3. Brought suit to enforce the K
145
When can a party assign rights or benefits under K?
Any time, unless contract prohibits or invalidates assignment
146
IF K PROHIBITS assignment, what is the effect of an assignment
1. Assignor has breached the K and is liable for damages, however assignment is still valid and enforceable by assignee
147
IF K INVALIDATES assignment, what is the effect of an assignment
Assignment is void and assignee cannot enforce the assignment or recover.
148
Who and what can assignee sue for?
Can sue:
1. Obligor for non-performance (if assignor did not receive consideration for assignment) and
2. Assignor for wrongful revocation of assignment, or breach of an implied warranty
149
Is consideration required for an assignment?
No, but if consideration is provided, assignment becomes irrevocable
150
What happens if assignor assigns the same rights multiple times?
First assignment for consideration will control.
If no consideration, last assignment
151
What is a delegation?
Outsourcing of duties . It is generally acceptable s/l/a K doesn't prohibit OR
-other party doesn't have some special interest in having a specific person perform
152
Can a delegee be held liable for breach?
No, unless she receives consideration from delegating party
- delegating party NOT excused from performance unless there has been consideration
- different from novation b/c in a delegation ONE party can decide to delegate, and a novation requires BOTH parties.
