Contracts -- Third-Party Beneficiaries

Front 1

Third-Party Beneficiary

Back 1

Not a party to a K (Recipient)

Able to enforce K others made for her benefit

Party designed in K

Front 2

Third-Party Beneficiaries --
Promisor

Back 2

Party making promise that benefits third party (Actor)

Front 3

Third-Party Beneficiaries --
Promisee

Back 3

Party who obtains promise that benefits third-party (Middle man)

Front 4

Third-Party Beneficiaries --
Intended/Incidental Beneficiaries

Back 4

INTENDED -- have K rights, ALWAYS named in K

Front 5

Third-Party Beneficiaries --
Creditors/Donees

Back 5

Intended beneficiaries either donees or creditors

Usually DONEES
CREDITOR if beneficiary creditor of promisee (Middle man)

Front 6

Third-Party Beneficiaries --
Efforts to Cancel or Modify

(2)

Back 6

TEST: If third-party
1) knowledge and 2) Reliance -OR- assent

Front 7

Third-Party Beneficiaries --
Liability to Other Parites

Back 7

1) Beneficiary (Recipient) can recover from Promisor (Actor) 2) Promisee (Middle man) Can Recover from Promisor (Actor)
3) Beneficiary (Recipient) Cannot Recover from Promisee (Middle man)
4) EXCEPTION to No. 3 -- Creditor Beneficiary (Recipient) can recover PRE-EXISTING DEBT from Promisee (Middle man)

Front 8

Third-Party Beneficiaries --
Defenses to Liability

Back 8

Promisor (Actor) can assert same defenses as if he have been sued by the Promisee (Middle man)

Front 9

Third-Party Performance -- Assignment

(2)

Back 9

1) K between two parties
2) K Transfer of rights to a third party

Party not designated in K

Front 10

Third-Party Performance -- Assignment --
Assignor

Back 10

Person who transfers rights

Front 11

Third-Party Performance -- Assignment --
Assignees

Back 11

Not a party to original K; rights transferred to him

Front 12

Third-Party Performance -- Assignment -- Obligor

Back 12

Non-transferring original party to K

Front 13

Third-Party Performance -- Assignment -- Limitations

Back 13

LIMITATIONS:
1) prohibition*** takes away right to assign, not power to assign -- assignee unaware of prohibition can still enforce agreement
2) invalidation -- takes away right and power to assign
3) Substantial Change of Duties of Obligor

Front 14

Third-Party Performance -- Assignment --
Consideration

Back 14

Generally not needed for assignment

BUT gratuitous assignments can be revoked; assignments for consideration can be revoked

Front 15

Third-Party Performance -- Assignment --

Rights of Assignees

Back 15

Have legal rights against party w/ whom they did not K (obligor)

Obligor's Defenses:
-assignment for consideration erases Assignor's rights
-Material Breach
--payment to assignor effective until knowledge of assignment

Front 16

Third-Party Performance -- Assignment --
Implied Warranties of Assignor

(3)

Back 16

1) Right assigned actually exists
2) Right assigned not subject to then-existing defenses by obligor
3) Right assigned cannot be subject to impairment (but assignor cannot guarantee obligor action)

Front 17

Third-Party Performance -- Assignment -- Multiple Assignments

(2)

Back 17

Gratuitous Assignments -- Last assignee wins

Assignment for Consideration -- First assignee wins EXCEPTION
1) Assignee does not know of earlier assignment
2) first to obtain payment payment, judgment, novation, indicia of ownership

FIRST TO NOTIFY red-herring, wrong answer

Front 18

Third-Party Performance -- Delegation

Back 18

Two parties agree to K terms, third-party becomes involved in execution of K terms

Front 19

Third-Party Performance -- Delegation

Back 19

Delegation -- Transfer of DUTIES
Assignment -- Transfer of RIGHTS

Front 20

Third-Party Performance -- Delegation -- What Duties are Delegable

Back 20

Generally all K duties
EXCEPTIONS:
1) K Prohibits Delegations or Assignment
2) "Personal Services" requiring very special skills

Front 21

Third-Party Performance -- Delegation -- Nonperformance by Delegate

(2)

Back 21

1) Delegating party always remains liable
2) Delagatee liability only IF consideration received; delegation for consideration CREATES third-party beneficiary