third parties Flashcards
who is a third party beneficiary?
not a party to K but can enforce K because they benefit from PF of the K
how does a TPB prove their status as a TPB?
must show that contracting parties intended a direct benefit to 3P
how does vesting affect 3P rights?
once vested, TPB rights can’t be altered or extinguished thru a later K of contracting parties without assent of TPB
what’s the minority rule of when vesting occurs for TPB’s?
TPB rights are immediately vested
what’s the downside of the minority rule of when vesting occurs for TPB’s?
limits freedom to contract
what’s the majority rule of when vsting occurs for TPB’s?
TPB rights vest when (1) TPB justifiably relies on promise, (2) TPB brings suit on K, or (3) TPB manifests assent to promise
define assignment
transfer of rights
what power does a party have after they’ve assigned their rights?
rights of assignor are then extinguished
define a delegation
transfer of duties to a delegatee
what power does a party have after they’ve delegated their duties?
delegator continues to remain liable for PF of duties
who’s the obligee?
person to which something is owed under the original K - receiver of PF duties
what’s the obligor?
performer of duties
where do the obligor/obligee come in?
parties to original K
who can the assignee sue?
assignee can sue obligor
who can the obligee sue?
obligee can sue delegator
when is the obligor discharged from duty by substitution of a new obligor?
only if noation - new K, obligee consents
when is assignment not allowed?
assignment is not allowed if it will materially change the duty of the obligor
when is delegation not permitted?
if obligee has a substantial interest in having hte original obligor perform duties
what kind of duties can never be delegated?
duties under a K to provide personal services can never be delegated
what’s the effect of an anti-assignment provision?
don’t render assignment ineffective, but gives right to recover damages
how can you limit the power to assign your K?
need specific clause - “non-conforming assignments shall be void/invalid
