Third-Party Rights Flashcards
1
Q
What is a Third-Party Beneficiary?
A
- Occurs when Two people have a valid K
- and a Third party will benefit from that K, can be incidental or intentional
2
Q
Incidental Beneficiary:
A
- Third party who incidentally benefits from K
- NEVER has rights under K
3
Q
Intended Beneficiary:
A
- Original parties intend to benefit a third party
- MAY have rights under K
- Intended third-party beneficiaries do NOT need to be named
4
Q
Rights VEST When:
A
1) Third party is informed of rights & accepts
OR
2) Third party learns of rights & relies
5
Q
If Rights Have Vested:
A
- Third party has same rights & defenses as original parties
6
Q
Assignment & Delegation:
A
- Two people have a valid K
- One party transfers obligation to someone else
7
Q
General Rule for assignments and delegations:
A
- Assignments & Delegations are VALID
8
Q
Present Intent to Transfer:
A
- Assignments & Delegations require
“present intent to transfer”
9
Q
Novation:
A
- A release of the original party from the K
10
Q
Anti-Assignment Clause:
A
1) The Assignment is still VALID, but
2) The original party liable for money damages
11
Q
Anti-Assignment Clause Exceptions
A
1) Not valid if it would MATERIALLY ALTER RISK of performance
2) Unique or Personal Service K cannot be transferred
12
Q
Terms:
A
- New party CANNOT change K terms
- New party only gets the original rights & obligations
13
Q
Transferring money:
A
- Must give NOTICE before obligated to pay
