Contracts: Third-Party Rights

Question 1

Assignments

Answer 1

• any right can be assigned or delegated

- assignment is contract separate from original agreement

Question 2

Assignment Exceptions

Answer 2

• prohibited by contract terms
• prohibited by statute
• prohibited by personal contracts
• prohibited for increased material risk to obligor

Question 3

Delegation Exceptions

Answer 3

• prohibited by contract terms
• contract based on personal skill of obligor
• performance will vary materially from expectation

Question 4

Rights upon Assignement

Answer 4

• assignee gets no better rights than assignor (can be lesser) “steps into shoes” of original
• assignee with most rights, gives first notice of assignment
• until notice, original party can discharge
• defenses of original now belong to assignee.
• assignor remains liable

Question 5

Third-Party Beneficiary

Answer 5

• Donee: contract for direct benefit of donee
• Creditor beneficiary: contract to benefit creditor made with third party
• Incidental beneficiary: receives unintended benefit and has no legal rights.