Week 8 Flashcards
1
Q
Privity of contract
A
Only contracting parties are bound, never duties for 3rd party
Exemption: 3rd party rights.
2
Q
Third Party Rights
A
A clause in a contract confers rights to a third party. (Grandma wants her money to be given to her kids after her death). Identifiable benefiaciary
3
Q
Assignment principle
A
Assignment of rights - no consent
Transfer of obligations - consent
Assignment of contracts - consent
- Transfer of negotiable instruments
- Transfer of rights linked to the transfer of a business
4
Q
Transfer of obligations
A
To transfer the obligation you need the consent of creditor
The debtor can be replaced, but who pays is important
5
Q
Novation
A
Original contract no longer exists, fresh start
Intention to create new relationship.
If its a new contract you lose security rights