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7 Cards in this Set

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  • Back
The Promisor’s Defenses
The third party beneficiary’s right are derived from those of the promise, that that the third party beneficiary gets no better rights against the promisor than the promise had. This means that the promisor is able to raise almost all defenses arising from the original contract regardless of whether sued by the promise or the third party beneficiary.

Defenses: Three possible situations

#1 Defenses/Claims Pr has agasint the Pee – across the top
#2 Defense/Claims the Pr has agsint the TPB- left side
#3 Defenses/Claims perhaps against the Pee and TPB- right side
Restatement (Second) of Contracts
(1) A promise creates no duty to a beneficiary unless a contract is fromed between the proisor and the proisee; and if a K is voidable or unenforceable at the time of its formation the right of any beneficiary is subject to the infirmity.

#1- Restatement section- deals with situation number one. 309-1 309-2. Paragraph #1-Defenses or claims that there never was a contract. Paragraph #2 Or ok we have a contract but it is not enforceable. Page #790.

The third paragraph deals with Defense/ Claims arisies from the TPB K

The fourt paragraph – if is it a K that arises out of a different K. D/K arising from other Contracts promisor has against TPB may NOT be used by the PR.
Problem 174 and 175 pg. 791
Problem 174- GO OVER
- Cable TV would get no better rights than Wanda Wonderful
- Pr- No risk
- Pee- Wanda
- Tp-Cable TV
- The tp is suing the pr. The defense of no failure of no payment arises out of the K. Since she missed the payments there is no longer consideration. an enforceable payments. Can promisor assert a tp that there was no consideration. Yes

Problem 175-GO OVER
- Nate should be able to get the money
- Is there an enforceable K. NO. Illegality arises out of the K.
Vesting of the Beneficiary’s Rights
The original contracting parties remaind free to change the K to the detriment of the third party beneficiary until the moment whne the beneficiary’s rights vested. Vesting was automatice for a Donee. For a creditory required a reliance. Second restatement got rid of these.

Restatement (Second) of K
(1) Discharge or modification of a duty to an intended beneficiary by conduct of the promise or by a subsequent agreement between promisor and promise is ineffective if a term of the promise creating the duty so provides
(2) In the absence of such a term, the Pr and Pee retain power to discharge or modify the duty by subsequent agreement.
(3) Such a power terminates when the beneficiary, before he receives notification of the discharge or modification, materially changes this position in justifiable reliance on the promise or brings suit on it or manifests assent to it at the request of the pr and pee.
may you create a tpb contract eventhough you don’t know who the third party beneficiary is going to be? And when would their rights vest?
? Yes. Example insurance policy this money goes to my children alive at the time of my death. The second issue, is when do the rights of such beneficiaries Vest?
 Top of 795. A TPB contract may exist even if the beneficiary is not named, not id, or not yet in existence. IN this case there are two but neigher named.. Until we know who the beneficiary the village is to change the agreement at anytime.
 Paragraph top of 795- their rights can’t vest until we know who the beneficiary is.
Can you modify a contract even if it is to a detriment to the TPB?
Problem 176
They can change to the detriment of the tpb if their rights have not been vested. I would argue that Lawrence did not have any rights.

a.) No, they have the right to modify their rights. Because laurance could not rely they can change.
b.) No
c.) NO- he did rely so they can not change
Can you change the agreement after the rights of the parties have vested?
Problem 177
Pr- Work
The letter says that they knew. If they knew then they have vested. Work and good can no longer change the agreement. Work owes the 1,200 because they can not not change after the colleges rights have vested.