Third Party Rights Flashcards
Third Party Beneficiary
When performance by the promisor will benefit a third party. Status arises at the time the contract is formed.
Does Public Intercourse Cause VD
Define, Privity, Intent of Promisee to Benefit, Classification (Creditor, Donee, Incidental), Vesting, Defenses
Intended Beneficiary (UCC) - Creditor or Donee
Incidental Beneficiary - Not creditor or donee; has no contract rights
Vesting
Creditor:
Majority - Notice and Assent
Minority - If beneficiary reasonably and materially changes position to detriment
Donee:
Majority - Notice and Assent
Minority - If beneficiary reasonably and materially changes position to detriment
Minority 2 - Upon formation
Intended:
Assent, brings suite and materially changes position
3rd Party Beneficiary Defenses
Beneficiary v Promisor (C v B)- Promisor can use any defenses he could against promisee, i.e. formation defenses
Beneficiary v Promisee (C v A):
Donee - No rights
Creditor - Limited to original obligation
Promisee v Promisor (A v B):
If B does not perform and A is injured, A can sue.
Assignment of Rights
Must sufficiently describe the rights and indicate present intention to divest the rights. Can be oral or written, does not need consideration.
Money is always assignable, rights which are too personal and will vary risk or contract prohibits are not assignable, i.e. life insurance
DPRAVED
Define, Privity-Exception, Rights Assignable, Valid Present Assignment, Effect of Valid Assignment-Notice, Defenses
Covenant not to Assign
Can still assign, but other party can sue for breach.
Null and Void - Cannot assign, innocent assignee can sue for breach of implied warranty
Delegation
Authorization to another to render performance of legal duty. Not allowed unless anyone could perform.
If assumption of rights 3rd party beneficiary contract through delegation.
Original party is still liable if delegor does not perform, unless novation.
