Third Party Beneficiaries

Question 1

Intended v. Incidental Beneficiaries

Answer 1

Only intended 3rd party beneficiary have contractual rights

Incidential beneficiaries are those beneficiares that are either in the contract or the reason the contract was created.

Question 2

Creditor v. Donee Beneficiary

Answer 2

Intended beneficiaries, and assume intended beneficiaries are donee beneficiaries unless stated otherwise.

Donee’s cannot sue promisee

Creditor can sue promisee on pre-existing debt can sue promisory only on one satisfaction

Question 3

When Do Rights of Beneficiary Vest

Answer 3

Manifests assent to arrangement, brings a suit to enforce the promise or materiall changes position in justifiable reliance.

Question 4

Before Vesting

Answer 4

Parties are free to modify contract

Question 5

Assignment

Answer 5

A transfer of contractual rights from assignor to assignee, obligor being other party

Question 6

Limitations on Assignment

Answer 6

Prohibition or Invalidation

Question 7

Prohibition of Assignment

Answer 7

takes away right to assign, but not power, which mean that assignor is liable for breach of contract, but assignee who DOES NOT KNOW can still enforce assignment

Question 8

Invalidation of Assignment

Answer 8

Takes away both right and power to assign

Question 9

Common Law Assignment

Answer 9

Common law bars assignment that SUBSTANTIALY CHANGES DUTIES OF THE OBLIGOR

Question 10

Rights of Assignee

Answer 10

Can sue obligor, obligor has same defenses against asignee as it would have against assignor

payment by obligor to assignor still effective until oblogr know of assignment

Question 11

Multiple Assignments (Gratutious Assignments)

Answer 11

Last Assignee wins, gift assignments can be freely revoked, revocation can occur through bankruptcy, death, assignor taking perfomance directly from obligor or making another assignment.

Question 12

Assignments for Consideration

Answer 12

First assignee for consideration will win

Exception: subsequent assignee will take priority if he does not know of earlier assignment, and is the 1st to obtain a payment, judgment, or novcation or indicia of ownership

Question 13

Delegation

Answer 13

A transfer of contractual duty

Question 14

What duties are delegable?

Answer 14

Contractual duties

Exception: K prohibits delgation or prohibits assignments OR K calls for very special skill OR Very Special Reputation

Question 15

Liability for Delgatee’s Nonperformance

Answer 15

Original party always replaims liable, delegatee is liable only if she recives consideration from delegating party, which would create a 3rd party beneficiary