Contracts (TPB) Flashcards
What are the 2 types of Third Party Beneficiary?
Intended & Incidental
A beneficiary is intended if they are:
3 requirements
- identified in the K
- recieves performance directly from promisor
- has some relationship with promisee that indicates intent to benefit
Must be identified AT TIME K IS MADE
T/F
A K with a TPB can only be cancelled or modified with their consent
False.
K can be cancelled w/o TPB consent if their rights have not yet vested
What are the 3 ways a TPB rights can vest?
Once they learn of the K and:
assent
rely
sue
T/F
All K are assignable and delegable except K for:
3 types
- Unique Personal Service K
- Long-term Requirement K
- Prohbited by law
T/F
Assignments and delegations can be done orally
True
T/F
Assignments and delegations can only be for value
False, can be gratuitous
An assignment or delegation done gratuitously can be ____, but if it’s for value, it is ____
Revocable
Irrevocable
T/F
Consideration is needed for an assignment or delegation
False
The effect of an assignment is to establish privity between ____ and extinguishes privity between ____.
Establish: Assignee and Obligor
Extinguish: Assignor and Obligor
For an assignment to be effective, the assignor must:
Manifest an intent to completley and immediately transfer their rights
The right being assigned must be ____ described
Adequately
An assignment for value is one that is:
3 requirements
- done w/ consideration
- taken as a security or for payment of a preexisting debt
- cannot be revoked
What happens to an assignment once revoked?
Privity between the assignor and obligor is restored
T/F
An assignee can sue the obligor to recover payment
True
What is required for a delegation?
The delegator must manifest a present intention to make a delegation.
T/F
A delegator remains liable on the K
True
T/F
The obligee can sue a delagator for nonperformance by the delegate
True
A ____ substitutes an original party to the K for a new party and requires assent of ALL parties
Novation
Does a novation completley release the original party?
Yes
Do intended or incidental beneficiares have contractual rights?
Only intended
What are the two types of intended beneficiares?
- creditors (promisee owes them a debt)
- donee (promise tends to benefit gratuitously)
A creditor beneficiary can sue the ____ on the existing obligation between them and also sue the ____
Promisee
Promisor
A creditor beneficiary can sue the ____ on the existing obligation between them and also sue the ____
Promisee
Promisor
A creditor beneficiary can sue the ____ on the existing obligation between them and also sue the ____
Promisee
Promisor
But they can only recieve 1 satisfaction
What are the two types of intended beneficiares?
- creditors (promisee owes them a debt)
- donee (promise tends to benefit gratuitously)
Does a donee beneficary have a right to sue the promisee?
No, unless detrimental reliance exists.
May a promisee sue the promisor if they dont perform?
Yes
Typical Third Party Beneficiary Situation
A contracts with B that B will render some performace to C.
Which party is which?
A= promisee
B= promisor
C= Third-party beneficiary
What are the two types of intended beneficiares?
- creditors (promisee owes them a debt)
- donee (promise tends to benefit gratuitously)
Does a donee beneficary have a right to sue the promisee?
No, unless detrimental reliance exists.
May a promisee sue the promisor if they dont perform?
Yes
Typical Third Party Beneficiary Situation
A contracts with B that B will render some performace to C.
Which party is which?
A= promisee
B= promisor
C= Third-party beneficiary
A creditor beneficiary can sue the ____ on the existing obligation between them and also sue the ____
Promisee
Promisor
But they can only recieve 1 satisfaction
Typical Assignment Situation
A contracts to provide security for B. A then assings right to payment to C. C has the right to recieve payment from B.
Which party is which?
A= Assignor
B= Obligot
C= Assignee
What are the two types of intended beneficiares?
- creditors (promisee owes them a debt)
- donee (promise tends to benefit gratuitously)
Typical Third Party Beneficiary Situation
A contracts with B that B will render some performace to C.
Which party is which?
A= promisee
B= promisor
C= Third-party beneficiary
Does a donee beneficary have a right to sue the promisee?
No, unless detrimental reliance exists.
May a promisee sue the promisor if they dont perform?
Yes
A creditor beneficiary can sue the ____ on the existing obligation between them and also sue the ____
Promisee
Promisor
But they can only recieve 1 satisfaction
Typical Assignment Situation
A contracts to provide security for B. A then assings right to payment to C. C has the right to recieve payment from B.
Which party is which?
A= Assignor
B= Obligot
C= Assignee
What are the two types of intended beneficiares?
- creditors (promisee owes them a debt)
- donee (promise tends to benefit gratuitously)
A creditor beneficiary can sue the ____ on the existing obligation between them and also sue the ____
Promisee
Promisor
But they can only recieve 1 satisfaction
TPB
May a promisee sue the promisor if they dont perform?
Yes
Typical Third Party Beneficiary Situation
A contracts with B that B will render some performace to C.
Which party is which?
A= promisee
B= promisor
C= Third-party beneficiary
Typical Assignment Situation
A contracts to provide security for B. A then assings right to payment to C. C has the right to recieve payment from B.
Which party is which?
A= Assignor
B= Obligor
C= Assignee
Does a donee beneficary have a right to sue the promisee?
No, unless detrimental reliance exists.
Typical Third Party Beneficiary Situation
A contracts with B that B will render some performace to C.
Which party is which?
A= promisee
B= promisor
C= Third-party beneficiary
Does a donee beneficary have a right to sue the promisee?
No, unless detrimental reliance exists.
TPB
May a promisee sue the promisor if they dont perform?
Yes
What are the two types of intended beneficiares?
- creditors (promisee owes them a debt)
- donee (promise tends to benefit gratuitously)
A creditor beneficiary can sue the ____ on the existing obligation between them and also sue the ____
Promisee
Promisor
But they can only recieve 1 satisfaction
Typical Assignment Situation
A contracts to provide security for B. A then assings right to payment to C. C has the right to recieve payment from B.
Which party is which?
A= Assignor
B= Obligot
C= Assignee
What is the difference between an assignment and a TPB?
The third party intended beneficiary is created at the time the contract was made (e.g., designated in the contract). An assignment, on the other hand, is a contract that does not contemplate performance to a third party when the contract is made. Rather, later one of the parties transfers his rights to another.
A ____ occurs where a new contract substitutes a new party to receive benefits and assume duties that had originally belonged to one of the original parties under the terms of the old contract.
novation
A novation discharges the old contract.
A novation will be found when there is:
(i) a previous valid contract; (ii) an agreement among the parties, including the new party to the new contract; (iii) the immediate extinguishment of contractual duties as between the original contracting parties; and (iv) a valid and enforceable new contract.
An obligee becomes a TPB and can compel performace or bring suit for nonperformance after a delegation of duties if there is also: an assumption of duty on the part of the ____, supported by ____
delagatee (replacement),
Consideration
