Contracts > VII. Third-Party Problems

Question 1

Contracts > VII: Third-Party Problems > A. Third-Party Beneficiaries

How do you know when you are dealing with a third party beneficiary scenario in a test question?
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Answer 1

You’ll know because the third party is always mentioned in the K itself

Question 2

Contracts > VII: Third-Party Problems > A. Third-Party Beneficiaries

When is the third-party beneficiary’s consent required before the promisor and promisee can adjust, modify or cancel the third-party beneficiary contract?

Answer 2

Not until the third-party beneficiary’s rights have vested.

Question 3

Contracts > VII: Third-Party Problems > A. Third-Party Beneficiaries

When does a third-party beneficiary’s rights vest enabling her to enforce the contract that the promisor and promisee made for her benefit?

Answer 3

A third-party beneficiary’s rights vest in 1 of 3 ways:

 - 1) (learn and assent) when the third party beneficiary learns of the K and assents to it;
 - 2) (learn and rely) when the third-party beneficiary learns of the K and relies on it; or
 - 3) (learn and sue) when the third-party beneficiary learns of the K and immediately brings a lawsuit to protect their rights

NOTE: Court will NEVER allow a third-party beneficiary to make a SOF claim against the promisor or promisee

Question 4

Contracts > VII: Third-Party Problems > B. Assignments; C. Delegations

All contracts are assignable and delegable except for _______.

Answer 4

unique personal service contracts and long term requirement contracts.

Question 5

Contracts > VII: Third-Party Problems > B. Assignments; C. Delegations

Assignments can be gratuitous or for value. What is the effect of having one or another?

Answer 5

Assignments for value are irrevocable. Gratuitous assignments are revocable unless assignee can show reliance on that assignment.

Question 6

Contracts > VII: Third-Party Problems > B. Assignments; C. Delegations

Must assignments and delegations be only in writing.

Answer 6

No they can be oral or written.

Question 7

Contracts > VII: Third-Party Problems > B. Assignments; C. Delegations

What is the only time novation will be a correct answer on the bar exam?

Answer 7

When there’s a new contract substituting out 1 of the original parties for a new party.