Third-Party Beneficiaries

Question 1

Third Party Beneficiaries - Vesting

Answer 1

Only intended (not incidental) third party beneficiaries have rights under the contract

Vesting of TPB Rights:
* manifests assent
* sues to enforce right
* materially changes position in justifiable reliance

TPB can sue:
(i) promisor
* promisor can raise defenses that he could raise against promisee
(ii) promisee
* donee TPB: can only sue if detrimental reliance
* creditor TPB: can sue on underlying obligation (can sue both promisor/promisee but get only one satisfaction)

Question 2

Assignment

Answer 2

All contract rights assignable unless:
* assignment materially changes obligor’s duties or risk
* it’s prohibited by law

Notes
* gift assignments revocable
* assignments with consideration irrevocable

Question 3

Delegation

Answer 3

Duties that can’t be delegated
* if they involve personal judgment/skill
* involves special trust in delegator (ex. doctor)
* restricted by contract
* delegation would materially change obligee’s expectancy

Liability
* delegator remains liable
* delegate liable only if he assumes duty (assignment of “contract” or “rights under the contract”)