VII. Third-Party Problems

Question 1

3rd Party Beneficiary

Answer 1

• LIke life insurance = 2 people K w/”intent” to benefit 3rd Party
• On bar, inteded 3rd Party bene will be named in K
• Promisor is K party whose promsie more directly benefits 3rd Party
• 3rd Party can recover from Promisor
• Alternatively, peromisee can recover from promisor
• 3rd Party CANNOT recover from promsie on the K

Question 2

Assignment

Answer 2

• 2 people contracting & then, later, 1 of the 2 (the assignor) transfers to a 3rd Party (the assignee) his rights under the K against the other party to that K (the obligor)
• No consideration required for assignments BUT assignemtns w/out consideration CAN be revoked and have no implied warranties
• Assignment CANNOT “substantially change duties of obligor”
  
  • Not an issue in assignemnt of right to payment
  • Issue in assignment of right to services
• K provisions usually treated as prohibition, which means that assignee who did NOT know of K prohibition still has rights of assignee
• Assignee can recover from obligor
• Assignor CANNOT recover from obligor unless assignment was w/out consideration
• Obligor has same defenses against assignee as it would have agianst assignor
• Multiple Assignments
  
  • Last in time if not for consideration
  • Otherwise, 1st assignee for consideration

Question 3

Delegation

Answer 3

• 2 or more people contracing, and then 1 of the 2 transfers duty to perform
• Need to be able to distinguish
  
  • (1) A delegation & Assignment from
  • (2) A delegation for consideration
• Delegatee is legally obligated ONLY IF delegation & assignment or delegation for consideration
• Delegating party is always liable after delegation