T-P problems: T-P Ben, assignment, delegation

Question 1

Limitations on assignments

Answer 1

• Express Prohibition (not as strong): if party assigns rights, assignor is liable for breach of K BUT assignee who is not aware of prohibition CAN enforce K
• Express Invalidation (strong): if assignment, assignee cannot enforce (assignment is invalidated)
• If no terms of prohibition or invalidation OR ambiguous (CL): ALL K are assignable unless assignment SUBSTANTIALLY changes Obligor’s duties or risk (assignment of right to payment NEVER substantial change)

Question 2

Assignee (assignment of K rights)

Answer 2

NOT party to a K who receives K rights and CAN enforce K because of the assignment

Question 3

Assignor (assignment of K rights)

Answer 3

Party to a K that transfers rights under K to another.

• After assignment for consideration: no longer has rights under K
• If no consideration: assignor may void assignment

Question 4

Suing under T-P Ben K

Answer 4

– T-P not party to a K: can enforce K other made for T-P’s benefit (performance)

• T-P Ben’s rights vest when:
  Ben assents to K OR
  Ben materially changes position in justifiable reliance on the promise OR
  Ben brings suite to enforce the promise
• TPB can recover from promisor
• TPB can recover from promisee ONLY if TPB is a Creditor-TPB and only on pre-existing debt
• TPB Donee CANNOT recover from promisee because it’s just a failed gift
• Promisee can recover from promisor

Question 5

Multiple assignments

Answer 5

• If all gratuitous assignments: LAST assignee wins

- Multiple assignments for consideration: FIRST assignee wins

Question 6

Suing under Assignment of K rights

Answer 6

• Assignee (party not in K but can enforce K) can recover from Obligor
• Assignor for consideration CANNOT recover from obligor (assignor transfers rights thus no longer has rights)
  Assignor for consideration warrants: right under K exits, right not subject to defenses by obligor, assignor will not diminish value of right. Does NOT warrant actions by Obligor
• Obligor has same defenses against assignee as it would against assignor
• Obligor MUST continue to pay assignor if not aware of assignment

Question 7

Assignment of K rights

Answer 7

Elements: adequate description of right assigned AND present words of assignment (shows Intent to transfer completely and immediately)

• NO writing required and NO consideration
  BUT
• Assignment for consideration: IRREVOCABLE (unless express invalidation clause)
• Assignment w/o consideration CAN be revoked

Question 8

Liability under delegation of duties under K

Answer 8

• Delegator: Delegating party ALWAYS remains liable as surety (even if delegate for consideration assumes duties)
• Delegate liable ONLY if delegate receives consideration from delegating (Delegator) party creating an assumption of duties for the benefit of a T-P (a T-P Ben issue as well)

Question 9

Promisee (T-P)

Answer 9

Party receives promise to benefit (performance) T-P

Question 10

Delegation of Duties under K

Answer 10

Delegation of ALL duties under K allowed UNLESS

• K prohibits delegation or assignments, OR
• Personal services K for SPECIAL skills services

Question 11

Intended Ben (T-P)

Answer 11

Party is ALWAYS in the K and has K law rights

Question 12

Cancellation/Mod of T-P Ben K

Answer 12

If T-P Ben
1) learns + assents to K
2) learns + relied
3) learns + sues on K
Then T-P's rights are vested and K CANNOT be cancelled OR mod w/o T-P's consent unless otherwise agreed on K

Question 13

Promisor (T-P Ben)

Answer 13

Party makes promise to benefit (performance) T-P

Question 14

Obligor (assignment of K rights)

Answer 14

Other party not the assignor nor the assignee