Third Party

Question 1

Third Party Beneficiary

Who can sue whom?

Answer 1

1) Beneficiary can recover from Promisor
2) Promisee from Promisor

General Rule:
* Beneficiary cannot recover from Promisee

LImited Exception
* creditor Beneficiary can recover from promisee but only an pre-existing debt.

Question 2

Third Party Beneficiary

Vested

Answer 2

1) Manifests assent to the promise in a manner invited or requeste by the parties,
2) Bring suit to enforce the promise,
3) materially changes position in justifiable reliance on the promise.
* Vesting does not automatically occur on execution of the contract or when the beneficiary learns of the promise.

Question 3

Delegation

Answer 3

Delegation are permitted unless:

1) Contract prohibited delegation or assignment, or
2) Personal service contract for special skill.

Question 4

Third Party Beneficiary

Answer 4

An intended 3rd party beneficiary can enforce a contract only when their rights have vested.

Question 5

Assignment

Who can sue whom?

Answer 5

1) Assignee can recover from obligor: Aee —-> O
2) Assignor for consideration cannot recover from Obligor: Aor —x—> O
3) Obligor has same defense against assignee as it would agasint assignor ) O—Same as EE–>Aor

4) Payment by obligor to assignor is effective until obligor knows of assignment.
* similarly, modification agreement between obligor and assignor are effective if the obligor knows not know of assignment

5) Implied warranties of assignment in as assignment for consideration