Round 2 Lecture 4

Question 1

general of privity of contract

Answer 1

-only those persons who are parties to a contract can have rights/obligations under it

Question 2

third party beneficiary contracts

Answer 2

when the contracting parties intend to benefit a third party (a person who is not a party to the contract)

Question 3

privity

Answer 3

addresses the question of who has standing to sue whom for what

Question 4

assignment of contractual rights

Answer 4

• effectively a substitution of a new party for one of the original parties to the contract as to the right to receive performance of the contract
• your sublet’s right to occupy your apartment and receive the other benefits under the lease

Question 5

delegation of contractual duties

Answer 5

effectively a substitution of a new party for one of the original parties to the contract as to the duty to perform the contractual obligations under the contract
-your sublet’s obligation to perform the tenants duties under the lease

Question 6

third party beneficiary contracts

Answer 6

third party must be more than an incidental beneficiary (threshold requirement) - test: did the parties intend to confer on the beneficiary the right to bring suit to enforce the contract?

Question 7

what happens if a third party was to get a benefit and does not?

Answer 7

they can sue

Question 8

what needs to happen for a person to be declared a third party beneficiary

Answer 8

• the person must show tat the contract was entered into “directly and primarily” for the persons benefit
• an “indirect benefit merely incidental to the contract” will not suffice

Question 9

third party creditor beneficiary contract

Answer 9

• was one of the parties intending to discharge an obligation owed to the third party?
• one party to contract is intending to remove or satisfy something to 3rd party creditor

Question 10

third party donee beneficiary contract

Answer 10

• was one of the parties intending to confer a gift on the third party?
• contractor intending to confer gift to 3rd party

Question 11

when do rights become enforceable by the third party?

Answer 11

once they have vested (become binding) - vesting occurs at different points in time depending on the jurisdiction

Question 12

statutes of parties

Answer 12

• 3rd party can sue (has standing)
• 3rd party’s rights are subject to all defenses contracting parties could raise against each other
• 3rd party creditor beneficiary always has cause of action against original obligor
• 3rd party donee beneficiary has rights against promisor only

Question 13

assignment

Answer 13

transfer of contractual rights

Question 14

contract rights

Answer 14

intangible property interests (as opposed to your tangible property rights-your computer)

Question 15

assignors

Answer 15

persons who transfer contract rights

Question 16

assignees

Answer 16

persons to whom they are transferred

Question 17

general observations regarding assignments

Answer 17

• assignments may be with or without supporting consideration
• no particular formalities are required
• no special rules regarding how the assignment must be evidenced

Question 18

what contract rights are assignable?

Answer 18

-generally all (most common, the right to receive money which is frequently assigned by the person entitled to the payment)

Question 19

exceptions to the general rule of assignable rights

Answer 19

• if the assignment would materially increase the risk or burden to the obligor
• the assignment of the right to receive the performance of highly personal contract rights
• a contract prohibition against assignment (usually counts as a breach of contract)
• an assignment prohibited or limited by law

Question 20

status of assignee

Answer 20

• assignee stands in shoes of assignor
• assignee has no greater rights than assignor had
• assignor does not guarantee performance by obligor

Question 21

importance of notice of the assignment to obligor

Answer 21

if the obligor is not given notice of the assignment, the obligor will perform for the wrong party (the original obligee/assignor)

Question 22

implied warranties given by assignor who receives value in every assignment

Answer 22

• assignor will do nothing to defeat or impair assignment
• the right assigned actually exists
• the right assigned is not subject to defenses
• any related writings evidencing the contract are genuine
• assignor has no knowledge of any fact that would impair value of the assigned right

Question 23

delegation of duties

Answer 23

authorizing another person to perform a contract duty

Question 24

delegator

Answer 24

delegates duty

authorizes delegates to perform

Question 25

delegatee

Answer 25

has duty to perform

Question 26

what duties to perform under a contract are delegable?

Answer 26

generally all contractual duties can be delegated to another party

Question 27

exceptions to duties to perform in terms of delegating

Answer 27

• if performance requires the obligor’s personal skill, judgement, discretion, or supervision
• if there exists a contract prohibition against delegation (in a majority of jurisdictions a delegation in violation of such a provision is simply a breach of contract)
• if there is a statutory or public policy prohibition against a particular form of delegation

Question 28

assignment / delegation generally occurs…

Answer 28

simultaneously

Question 29

effect of delegation

Answer 29

• obligee can sue delegates because obligee is a third party beneficiary of the delegation and obligee can also sue original obligor
• obligor is not relieved of liability simply because the duty to pay for the car was delegated to Jones