Week 8

Question 1

Privity of contract

Answer 1

Only contracting parties are bound, never duties for 3rd party

Exemption: 3rd party rights.

Question 2

Third Party Rights

Answer 2

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

Question 3

Assignment principle

Answer 3

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

Question 4

Transfer of obligations

Answer 4

To transfer the obligation you need the consent of creditor

The debtor can be replaced, but who pays is important

Question 5

Novation

Answer 5

Original contract no longer exists, fresh start

Intention to create new relationship.

If its a new contract you lose security rights