Third Parties

Question 1

intended beneficiary

Answer 1

A person is an intended beneficiary and may enforce a contract if the parties intended her to benefit

Question 2

reasons to consider someone intended beneficiary

Answer 2

1. enforcing the promise will satisfy a duty of the promisee to the beneficiary
2. the promisee intended to make a gift to the beneficiary.

Question 3

a third party beneficiary must show two things in order to enforce a contract that two other people created.

Answer 3

1. she must show that the two contracting parties were aware of her situation and knew that she would receive something of value from their deal.
2. she must show that the promisee wanted to benefit her for one of two reasons: either to satisfy some duty owed or to make her a gift.

Question 4

creditor beneficiary

Answer 4

When one party to a contract intends to benefit a third party to whom he owes a debt

Question 5

Donee beneficiary

Answer 5

When one party to a contract intends to make a gift to a third party

Question 6

What must a third party be to enforce a contract?

Answer 6

1. creditor
2. done beneficiary
   ex: cannot be identical beneficiary

Question 7

Assignment

Answer 7

transferring contract rights

Question 8

assignor

Answer 8

the one making the assignment

Question 9

assignee

Answer 9

the one receiving an assignment

Question 10

obligor

Answer 10

the party obligated to do something

Question 11

What rights are assignable?

Answer 11

Any contractual right may be assigned

Question 12

rights cannot be assigned if

Answer 12

1. would substantially change the obligor’s rights or duties under the contract;
2. is forbidden by law or public policy; or
3. is validly precluded by the contract itself.

Question 13

How rights are assigned: writing

Answer 13

an assignment may be written or oral, and no particular formalities are required. However, when someone wants to assign rights governed by the statute of frauds, she must do it in writing

Question 14

How rights are assigned: Consideration

Answer 14

An assignment can be valid with or without consideration, but the lack of consideration may have consequences.
-An assignment for consideration is irrevocable

Question 15

gratuitous assignment

Answer 15

One made as a gift, for no consideration.

-A gratuitous assignment is generally revocable if it is oral and generally irrevocable if it is written.

Question 16

How rights are assigned: Notice to Obligor

Answer 16

The assignment is valid from the moment it is made, regardless of whether the assignor notifies the obligor

Question 17

Rights of the Parties after Assignment

Answer 17

• Once the assignment is made and the obligor notified, the assignee may enforce her contractual rights against the obligor
• The obligor may generally raise all defenses against the assignee that she could have raised against the assignor

Question 18

Assignors Warranty

Answer 18

The law implies certain warranties, or assurances, on the part of the assignor.

Question 19

Unless the parties expressly agree to exclude them, the assignor warrants that

Answer 19

1. the rights he is assigning actually do exist

2. there are no defenses to the rights other than those that would be obvious, like nonperformance

Question 20

Security interest

Answer 20

Rights in personal property that assure payment or the performance of some obligation.