5th issue: Third-Party problems

Question 1

what do you call a person trying to enforce a K they did not make

Answer 1

3rd party beneficiary

Question 2

how will know 3rd party beneficiary problem

Answer 2

look for more than 3 people

- look for 2 people k’ing with common intent to a 3rd party.

Question 3

vocab: 3rd party beneficiary

Answer 3

not a party to K. able to enforce others made for her benefit

Question 4

vocab: promisor

Answer 4

look for person making the PROMISE THAT BENEFITS THE 3rd party beneficiary

Question 5

vocab: promisee

Answer 5

look for person who OBTAINS THE PROMISE THAT BENEFTS 3rd party beneficiary

Question 6

vocab: intended/ inciddntal

Answer 6

only intended beneficiares have contractal rights

- intent of the 2 parties K determines w/e a 3rd party beneficiary is itended or incidential

Question 7

when will you know a 3rd party beneficiary is intended B

Answer 7

always named in K

Question 8

vocab: creditor/donee

Answer 8

usually donees

- Look w/e 3rd party beneficiary was a creditor of the promisee b4 contract

Question 9

what are the only 3rd party beneficiary that can enforce K

Answer 9

INTENDED B’s

Question 10

what is the test w/e party can cancel 3rd party beneficiary K

Answer 10

1) w/e 3rd party beneficiary KNOWS OF AND
2) has relied on or assented as requested
- If both then cannot cancel or modify

Question 11

does 3rd party beneficiary need BOTH knows of and relied on or assented as requestd to prevent a party from canceling or modifying K

Answer 11

YES

Question 12

4 people who can sue whom

Answer 12

1) B can recover from PROMISOR
2) Promisee can recover from promisor
3) GR: B CANNOT recover from promisee
4) LIMITED x/c: creditor B can recover from promisee BUT ONLY on pre-existing debt

Question 13

can B recover from the promisee

Answer 13

NO

Question 14

what is the x/c that B cannot recover from promisee

Answer 14

CREDITOR B can recover from promisee but only on pre-existing debt

Question 15

defenses for 3rd party B

Answer 15

If 3rd party beneficiary sues promisor, promisor can assert any defense that he would have if he had been sued by promisee

Question 16

generally what is assignment of rights

Answer 16

a person trying to enforce a K she did not make

Question 17

what is an assignment

Answer 17

a transfer of rights under a K

1) k b/w only 2 people and
2) one of the people later transfers rights under that K to a 3rd party

Question 18

vocab: assignor

Answer 18

party to K who later transfers rights under the K to another

Question 19

vocab: assignee:

Answer 19

not a party to a K. able to enforce the K b/c of the assignment

Question 20

obligor

Answer 20

other party to the K

Question 21

what if the K is a prohibition on assignment?

Answer 21

if simply says do not assign, only prohibition.

• assignor is liable for breach of K BUT
  2) assignee who does not know of the prohibition can still enforce the assignment

Question 22

if the K is a prohibition on assignment can the assignee still enforce assignment

Answer 22

assignee who does not know of the prohibition can still enforce the assignment
- assignor is liable for breach

Question 23

what does it mean for INVALIDATION for assignment

Answer 23

takes away BOTH the right to assign and the power to assign

- so there is a breach by the assignor AND no rights to assigne

Question 24

can an assignee enforce INVALIDATION for assignment

Answer 24

NO

- takes away both the right to assign and the power to assign

Question 25

ex of INVALIDATION of assignment

Answer 25

"all assignment of rights under this K are VOID

Question 26

ex: of prohibition of assignment

Answer 26

"rights hereunder are not assignable" does not take away the power to assign

Question 27

if in doubt b/w prohibition or invalidation which to choose

Answer 27

prohibition

Question 28

if there is nothing in K regarding assignability what is the rule under CL:

Answer 28

even if a K does not any way limit right to assign | CL: BARS an assignment that SUBSTANTIALLY CHANGES the duties of the obligor

Question 29

even if there was no langue limit assingmnet when under CL is it bared

Answer 29

if assingmnet SUBSTANTIALLY CHANGES the duties of the oblgior

Question 30

does an assignment right to pay under CL substantial change the duties of obligor

Answer 30

NO!!!! | - assingment of the right to pay for a CL is never a substantial change for obligor

Question 31

under CL what substantially changes obligors right

Answer 31

assignment of right to K performance OTHER THAN right to payment usually

Question 32

is consideration required or assignment of right

Answer 32

GR NO: consideration is NOT required

Question 33

can gratutious assignments be revoked

Answer 33

gratutious assignments (and only gratutious assignments( can be revoked

Question 34

whom can sue whom under assignment of writes

Answer 34

1) assignee can recover from obligor 2) assignor for CONSIDERATION CANNOT recover from obligor 3) obligor has same defense against assignee as it would against assignor 4) payment by obligor to assignor is effective UNTIL obligor knows of payment 5) implied warranties of assignor is an assignment for consideration

Question 35

can an assignee recover from an obligor if there was an assignment of rights

Answer 35

YES

Question 36

can an assignor FOR CONSIDERATION recover from the obligor

Answer 36

NO 1) assignment is a TRANSFER 2) that means assignor HAS NO MORE RIGHTS 3) assignment for consideration CANNOT be revoked

Question 37

can an assignment for consideration be revoked

Answer 37

NO

Question 38

payment by obligor to assignor effective until when

Answer 38

until Obligor KNOWS of assignment

Question 39

are modification agreements b/w obligor and assignor effective if the obligor did not know of the assignment

Answer 39

YES

Question 40

what are the implied warranties of assignor in an assignment for CONSIDERATION

Answer 40

1) the right assigned actually exists 2) right assigned is not subject to then existing defenses by the obligor 3) the assignor will do nothing after the assignment to IMPAIR the value of the assignment

Question 41

does the implied warranties of assignor in an assignment for CONSIDERATION warrant that obligor will not do anything after assignment

Answer 41

NO

Question 42

what to look for with multiple assignments

Answer 42

more than 3 names

Question 43

what is the rule for multiple assignments for GRATUITOUS assignments

Answer 43

GR: LAST assignee generally wins - can make gift assignments w/o consideration - can revoke assignment at anytime, therefore the next assignment is treated as revocation of previous assignment

Question 44

what is the GR for multiple assignments for CONSIDERATION

Answer 44

FIRST assignee for CONSIDERATION wins

Question 45

does the amount of consideration ever matter in K law

Answer 45

NO

Question 46

what is the X/C for multiple assignments for CONSIDERATION (where GR is 1st assignee for consideration wins)

Answer 46

``` a subsequent assignee takes priority over an earlier assignee for a value only if he BOTH 1) does not know of the earlier assignment and 2) is the first to obtain (a)payment. (b) a judgment (c) a novation OR (d) indicia of ownership - will hardly ever work - ```

Question 47

In K law, does 1st to notify ever matter?

Answer 47

NO

Question 48

what is a delegation

Answer 48

is the transfer by a party to a K of his DUTIES or burdens under the K to a 3rd party who was not a party to K

Question 49

what is the difference b/w assignment and delagation

Answer 49

1) assignment transfer of his RIGHTS or BENEFITS to 3rd party 2) delegation transfers DUTIES to 3rd party

Question 50

generally which duties are delegable

Answer 50

GR: contracutal duties are delegable

Question 51

limitations where duties ARE NOT delegable

Answer 51

1) K prohibits delegation OR assignments OR | 2) PERSONAL services contracts that call for VERY SPECIAL SKILLS

Question 52

when are personal service contracts not delegable

Answer 52

when the PERSONAL service K is for VERY SPECIAL SKILL | - very very limited

Question 53

what if after delegation, the 3rd party delegatee does not perform, is the delegating party remain liable?

Answer 53

Yes. DELEGATING PARTY ALWAYS REMAINS LIABLE

Question 54

does a delegating party always remain liable

Answer 54

YES

Question 55

what if after delegation, the 3rd party delegatee does not perform, when is a delegatee liable

Answer 55

delegatee is ONLY IF they received CONSIDERATION from delegating party

Question 56

what is the rule for a delegating party and their liability if 3rd party does not perform

Answer 56

ALWAYS REMAIN LIABLE

Question 57

3 times when 3rd parties rights vest

Answer 57

1) when 3rd party learns of K and assents to it 2) when 3rd party learns of K and relies upon it 3) when 3rd party learns of right and sued on K