Understanding Third Party Beneficiaries, Assignments, and Conditions in Contracts, Quizzes of Finance

Download Understanding Third Party Beneficiaries, Assignments, and Conditions in Contracts and more Quizzes Finance in PDF only on Docsity! TERM 1 Third Party Beneficiary DEFINITION 1 Is someone who was not a party to the contract but stands to benefit from it. Two types are: 1.) Intended beneficiary 2.) Incidental Beneficiary TERM 2 Intended Beneficiary DEFINITION 2 May enforce a contract if the parties intended her to benefit AND IF EITHER a.) enforcing the promise will satisfy a duty of the promisee to the beneficiary, or b.) the promisee intended to make a gift to the beneficiary. MUST SHOW 1.) That the two contracting parties were aware of her situation and knew that she would received something of value from thier deal 2.) That the promisee wanted to benefit her for one of two reasons: either to satisfy some duty owed or to make her a gift. TWO TYPES Creditor, Donee TERM 3 Creditor Beneficiary DEFINITION 3 The promisee is fulfilling some duty (such as fulfilling a debt already owed. TERM 4 Donee Beneficiary DEFINITION 4 If the promisee is making a gift. TERM 5 Incidental Beneficiary DEFINITION 5 Someoen who might have benefited from a contract between two others but has NO right to enforce that agreement. TERM 6 Assignment DEFINITION 6 Transferring contract RIGHTS! Any contractual right may be assigne UNLESS assignment: a.) would substantiall change the obligor's rights or duties under the contract; or b.) is forbidden by law or public policy; or c.) is validly precluded by the contract itself. AND personal services TERM 7 Assinging Rights DEFINITION 7 MUST BE IN WRITING REGARDING THE STATUE OF FRAUDS. - If an assingment is for consideration it is irrevocable. - If a gratuitous assignment (made as a gift) it is generally revocable if it is oral and generally irrevocable if it is written. -You Should notify the obigor of the assingment but not required to. TERM 8 UCC 9-404 DEFINITION 8 The obligor on a sales contract may generally assert any defenses against the assignee that arise from the contract, and any other defenses that arose before notice of assignment TERM 9 UCC 9-403 DEFINITION 9 An agreement by a buyer that he will not assert against an assignee any claim or defense that he may have against the seller is generally enforceable by the assignee if he took the assignment in good faith, for value, without notice of the potential defenses. TERM 10 Delegation DEFINITION 10 Transferring contract DUTIES! However delegation DOES NOT by itself relieve the delegator of his own liability to perform the contract. Duties are delegable UNLESS: a.) delegation would violate public policy, or b.) the contract prohibits delegation; or c.) the obligee has a substantial interest in personal performance by the obligor. TERM 21 Good Faith DEFINITION 21 Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement. TERM 22 Time of the essence clauses DEFINITION 22 Generally make contract dates strictly enforceable. However, merely including adate for performance DOES NOT make time of the essence. IF the parties do not clearly state that prompt performance is essential, then both are entitle to REASONABLE delays. TERM 23 Breach DEFINITION 23 When one party breaches a contract, the other party is discharged, and has no obligation to perform and may sue for damages. TERM 24 Material Breach DEFINITION 24 Is one that substantially harms the innocent party and for which it would be hard to compensate without discharging the contract. Usually courts iwll only discharge a conract if a party committed a material breach. TERM 25 Anticipatory Breach DEFINITION 25 Making it unmistakably clear that it will not honor the contract! TERM 26 Statue of limitations DEFINITION 26 Is a Statutory time limit within which an injured party must file suit. TERM 27 True Impossibility DEFINITION 27 Means that something has happened making it utterly impossible to do what the promisor said he would do. Generally it is limited to 3 causes 1.) Destruction of the Subject matter 2.) Death of the Promisor in a Personal Services Contract 3.) Illegality TERM 28 Commercial Impracticability DEFINITION 28 Means some event hast occurred that neither party anticipated and fulfilling the contract would now be extraordinarily difficult and unfair to one party. TERM 29 Frustration of purpose DEFINITION 29 Means some event has occurred that neither party anticipated and the contract now has no value for one party.