Rights and Duties of Third Parties

Question 1

Only ____________ beneficiaries have contractual rights, not incidental beneficiaries.

Answer 1

intended

Question 2

What are the two types of beneficiaries?

Answer 2

Creditor beneficiaries and donee beneficiaries.

Question 3

Creditor Beneficiary

Answer 3

a person to whom a debt is owed by the promisee.

Question 4

Donee Beneficiary

Answer 4

a person to whom the promisee intends to benefit gratuitously.

Question 5

Can contractual rights be assigned?

Answer 5

generally, yes.

Question 6

What is the only way of prohibiting an assignment of contractual rights?

Answer 6

you must include a clause which states that “attempts to assign will be void.” Prohibiting assigning “the contract” will be construed as barring a delegation of the assignor’s duties.

Question 7

For what is the assignor liable after the obligor and the assignee are in privity?

Answer 7

Nothing. Once an assignment is made, the assignor is completely relieved of his obligations under the contract.

Question 8

Is a writing required for an assignment?

Answer 8

No

Question 9

What are the two types of assignments?

Answer 9

assignments for value; and gratuitous assignments.

Question 10

Is consideration required for an assignment?

Answer 10

No

Question 11

Must the word “assign” be used in an assignment?

Answer 11

No

Question 12

Assignment for Value

Answer 12

an assignment done for consideration or taken as security for or payment of a preexisting debt.

Question 13

Can an assignment for value be revoked?

Answer 13

No

Question 14

Gratuitous Assignment

Answer 14

an assignment not for value which can be revoked.

Question 15

Can contractual duties be delegated?

Answer 15

Yes

Question 16

What are the formalities for a delegation?

Answer 16

There are no formalities, the delegator must simply manifest an intention to delegate.