Third Parties Flashcards
Do you incidental beneficiaries of contracts have rights?
No only intended beneficiaries of the contract have rights to enforce it? This is a question of fact
When can the contracting parties not cancel or modify the contract seeking to benefit a third party?
When the third party’s rights have vested
What counts as vesting for the purpose of a third-party enforcing their rights under a contract?
- The third-party land of the deal and relies on it
– third-party land of the deal and agrees to it
– third-party learns of the deal and immediately sues to protect the right
In order for a third party to sue under a contract that intends to benefit them is made knowledge of the contract sufficient to enforce their right?
No, the third party’s rights need to vest
Who can the third-party beneficiary recover from?
The third-party beneficiary can recover from the promisor or the promisee can recover from the promisor. However, the third-party cannot recover from the promisee
What defences made a promise or a search against the third-party who is suing him under the contract?
Any defences that the promisor would have had against the promisee
Where a contract provides language of PROHIBITION, stating that the rights are not assignable but party A still assigned their right to party C, what is the result?
Language of prohibition = breach by the assignor + assignment of the contract
Where a contract provides language of INVALIDATION, stating that the rights are not assignable but party A still assigned their right to party C, what is the result?
Language of invalidation = breach by assignor + no assignment of the contract
Where a contract is silent about the rights of assignability, under common-law what terms can be assignment not change?
Payment, and right of contract performance
Is gift assignment valid?
Yes, it does not require consideration, but a gift assignment can be revoked
What is the rule where and assignor makes multiple assignments as a GIFT?
Lost in time wins
What is the rule where and assignor makes multiple assignments for CONSIDERATION?
First in time wins
Subject to one exception: a subsequent assignee for consideration will take priority if he (1) does not know if the earlier assignment, and (2) is the first to obtain payment, a judgment, a novation or indicia of ownership
Are contract duties delegable if there is a no assignment clause?
If the contract prohibits assignment, then delegating duties will likely be barred
Can a personal services contract (involving special skills) be delegated?
No
Party A delegates their contractual duties to party C. Party C screws up the service and party B sues. Who is liable?
Party A because they are still liable under contract to party B.
