Upload
kerry-austin
View
213
Download
1
Embed Size (px)
Citation preview
Chapter 16Contracts: Third Party
Rights
Chapter 16Contracts: Third Party
Rights
2
What is the difference between an assignment and a delegation?
What rights can be assigned despite a contract clause expressly prohibiting assignment?
What factors indicate a third party is an intended beneficiary?
What is the difference between an assignment and a delegation?
What rights can be assigned despite a contract clause expressly prohibiting assignment?
What factors indicate a third party is an intended beneficiary?
Learning ObjectivesLearning ObjectivesLearning ObjectivesLearning Objectives
3
AssignmentsAssignmentsTransfer of contractual rights
to a 3rd party.3rd party is called the assignee.The assignee has the right to
demand performance from the other original party (Obligor) to the contract.
Cannot Assign rights for personal services or when obligor’s performance changes.
Transfer of contractual rights to a 3rd party.
3rd party is called the assignee.The assignee has the right to
demand performance from the other original party (Obligor) to the contract.
Cannot Assign rights for personal services or when obligor’s performance changes.
4
DelegationsDelegations
Transfer of duties to a 3rd party (Delegatee) by Delegator.
Delegatee owes duty to original party in contract.
Delegator is still liable for performance of duty.
Transfer of duties to a 3rd party (Delegatee) by Delegator.
Delegatee owes duty to original party in contract.
Delegator is still liable for performance of duty.
5
Intended vs. Incidental Beneficiaries
Intended vs. Incidental Beneficiaries
What factors do courts consider in determining whether a 3rd party is an intended or incidental beneficiary:Whether performance is rendered directly to 3rd
Party?Whether 3rd Party has right to control details of
performance?Whether 3rd Party is expressly designated as
beneficiary under the contract?
What factors do courts consider in determining whether a 3rd party is an intended or incidental beneficiary:Whether performance is rendered directly to 3rd
Party?Whether 3rd Party has right to control details of
performance?Whether 3rd Party is expressly designated as
beneficiary under the contract?
6
Intended BeneficiariesIntended Beneficiaries
3P Intended Beneficiary Original parties to K intend at the time of contracting that the contract performance directly benefit a 3rd party. After rights vest, 3P can sue for breach.3P Creditor Beneficiary: Can sue debtor
directly.3P Donee Beneficiary: gift is enforceable.
3P Intended Beneficiary Original parties to K intend at the time of contracting that the contract performance directly benefit a 3rd party. After rights vest, 3P can sue for breach.3P Creditor Beneficiary: Can sue debtor
directly.3P Donee Beneficiary: gift is enforceable.
7
When Intended Beneficiary’s Rights Vest
When Intended Beneficiary’s Rights Vest
A Third Party Intended Beneficiary has the right to sue.
Her Right to Sue Vests When:3rd Party manifests Assent to the contract.3rd Party materially alters her position in
detrimental reliance of contract.When conditions for vesting occur.
A Third Party Intended Beneficiary has the right to sue.
Her Right to Sue Vests When:3rd Party manifests Assent to the contract.3rd Party materially alters her position in
detrimental reliance of contract.When conditions for vesting occur.
8
Incidental BeneficiariesIncidental Beneficiaries
Third Party Incidental Beneficiaries receives an unintended benefit.
Incidental beneficiary has no right to sue.
Third Party Incidental Beneficiaries receives an unintended benefit.
Incidental beneficiary has no right to sue.