Non-Performance And The Rights And Duties Of 3Rd Parties

Front 1

Basic understanding of 3rd Parties

Back 1

A contract between A and B cannot negatively affect the rights of C (enjoyment of land, for example), nor can it impose duties to a party that is not a party to the agreement

Front 2

Payment of debt by a 3rd party

Back 2

"A sells to B. B sells to C. In B’s contract to C, C is to pay A for B’s debts. A can sue C if the debt is not paid.

Otherwise called a “Third party beneficiary”"

Front 3

Creditor Beneficiary

Back 3

A sells to B. B sells to C. In B’s contract to C, C is to pay A for B’s debts. A is referred to as the “Creditor Beneficiary”

Front 4

R2-K position on 3rd party Beneficiaries

Back 4

"a 3rd party may have standing to recover on a contract. . There is a fundamental distinction between intended beneficiaries under a contract, and incidental ones (those not included in the contract’s provisions)

A right to performance for a beneficiary is appropriate when the promise satisfies and obligation of the promisee to pay money to the beneficiary; or circumstances indicate the promisee intends to give the beneficiary the benefit of the promised performance.

The intent does not need to benefit a 3rd party directly"

Front 5

Intent of the parties as to 3rd Party Rights under a K

Back 5

"3 way court split
Some require the promisor and promisee must intend to give the 3rd party rights
Others require only the promisee to control the contract
Some require in the ^above that the promisor have some knowledge of the promisee’s intent to give 3rd party beneficiary "

Front 6

incidental beneficiaries

Back 6

a person, for example, whose property values increase when a resort is built next to it

Front 7

Assignments of contractual rights and duties to thrid parties

Back 7

A contracts with B. B contracts with C to design a home for A. Can A treat C as a violator of Contract

Front 8

R2-K Assignment of Right

Back 8

"Assignment of right is a manifestation of assignor’s intention to transfer it by virtue of which assignor’s right to performance by obligor is extinguished in whole or part and assignee acquires a ight to such performance. Procurance of a substitute to render performance alone is not enough to extinguish the duty of performance. you have to actually render it through the 3rd party, or be released by the obligee
"

Front 9

When Can't you assign contractual right?

Back 9

"Contractual right can be assigned unless:
material change of duty of obligor
OR
Assignment forbidden by statute or other grounds of public policy
OR
or Assignment is validly precluded by contract "

Front 10

Difference between assignment and delegation

Back 10

Delegating a duty is when one satisfies their own duty by employing others to perform it for them. They still bear the responsibility of the original debt. Assignment is complete absolution of the duty

Front 11

assignment and the original obligor

Back 11

The assignment takes place between the original debtor (the assignor) and the assignee... the obligor (a landlord for instance) need not give it his blessing to render it valid

Front 12

What is assignable?

Back 12

ordinary rights, future rights, basically any right unless the assignment MATERIALLY CHANGES THE DUTY OF THE OBLIGOR, INCREASES THE BURDEN OR RISK IMPOSED UPON THE OBLIGOR, IMPAIRS THE OBLIGOR’S CHANCE OF RETURN PERFORMANCE, ETC. It cannot harm the obligor’s interests

Front 13

Breach defined

Back 13

any nonperformance of a contractual duty at a time when the duty is due.

Front 14

Express conditions

Back 14

When an agreement states that performance is not due unless, and until, some event has taken place

Front 15

Examples of express conditions

Back 15

"a party may be required under an insurance contract to give timely notice

Written notice being binding upon parties, and that upon written notice only, the contract will be valid (no oral notifications)"

Front 16

Mitigation of express conditions?

Back 16

no... if the parties have agreed to an express condition, there is no mitigating standard (estoppel or substantial compliance).

Front 17

Material terms to a contract

Back 17

if the relationship between the type of chattel is so dominant and/or pervasive as in any real or substantial measure to frustrate the purpose of the contract, you cannot just substitute “just as good”

Front 18

Equity in material breach case

Back 18

"law is slow to impute a punishment where the significance of the default is grievously out of proportion to the oppression of the forfeiture. A willful transgressor must accept the penalty. An innocent mistake that results in default may hope for mercy if he offers atonement for his wrong

If the difference in material is trivial, courts may not impose a significant verdict "

Front 19

Anticipatory repudiation

Back 19

a statement by a contracted party where they give the second party reasonable grounds for insecurity for the ability of the first party to perform on time (financial difficulty for example). A person can sue over this statement rather than wait for the date to arrive. It must be clear and unequivocal

Front 20

How anticipatory repudiation works

Back 20

A party can withdraw their repudiation UNLESS the aggrieved party has canelled or materially changed his position, or otherwise INDICATED that he considers the repudiation final (Sameish in UCC and R2-K). The aggrieved party has to ACT and treat the contract as rescinded and bring suit or wait for performance to (not) occur. The aggrieved party, HAS TO PROVIDE NOTICE TO THE REPUDIATOR.