Contracts _ Third Party Rights

Question 1

Third-Party Beneficiary:

THIRD-PARTY BENEFICIARY

Answer 1

• Two people have a valid K
• Third party will benefit from K

make sure there was a valid K between two parties.
- if there was no valid K, no one can be a third party beneficiary.
Valid K, and third party is claiming to have some rights/ to benefit from the K between person 1 and 2.

Question 2

Incidental Beneficiary

THIRD-PARTY BENEFICIARY

Answer 2

• Third party who incidentally benefits from K
• NEVER has rights under K

Question 3

Intended Beneficiary

THIRD-PARTY BENEFICIARY

Answer 3

• Original parties intend to benefit a third party
• MAY have rights under K
• Intended third-party beneficiaries do NOT need to be named

Question 4

Rights VEST When:

THIRD-PARTY BENEFICIARY

Answer 4

1) Third party is informed of rights & accepts
OR
2) Third party learns of rights & relies

Question 5

If Rights Have Vested:

THIRD-PARTY BENEFICIARY

Answer 5

• Third party has same rights & defenses as original parties

Question 6

Assignment & Delegation:

ASSIGNMENT & DELEGATION

Answer 6

• Two people have a valid K
• One party transfers obligation to someone else

• i mow your lawn every friday for $20, but i don’t have time to do it anymore, and I call Moe to come Moe your lawn, I’ve now given the job to Moe. Can’t stop Moe from doing it, and you’re gonna lose. b/c ASSIGNMENT OF RIGHTS AND DELEGATION OF DUTIES ARE VALID.

Question 7

General Rule

ASSIGNMENT & DELEGATION

Answer 7

• Assignments & Delegations are VALID

Question 8

Assignments & Delegations require “P I to T”

ASSIGNMENT & DELEGATION

Answer 8

• Assignments & Delegations require
  “present intent to transfer”

Question 9

Novation:

ASSIGNMENT & DELEGATION

Answer 9

• A release of the original party from the K

Question 10

Anti-Assignment Clause:

ASSIGNMENT & DELEGATION

Answer 10

1) The Assignment is still VALID, but
2) The original party liable for money damages

Question 11

Anti-Assignment Clause (EXCEPTIONS)

ASSIGNMENT & DELEGATION

Answer 11

Exceptions:
1) Not valid if it would MATERIALLY ALTER RISK of performance
2) Unique or Personal Service K **cannot be transferred

(1) if you see a hypo where there’s a K, and you’re giving rights away, it will MATERIALLY ALTER the risks of what you would get in the K.
(2) Unique or personal skill = non delegable b/c you’re hiring someone for a unique/personal service to do that job.

Question 12

Terms:

ASSIGNMENT & DELEGATION

Answer 12

• New party CANNOT change K terms
• New party only gets the original rights & obligations

Question 13

Transferring money:

ASSIGNMENT & DELEGATION

Answer 13

• Must give NOTICE before obligated to pay