Business Law Chapter 17 – Flashcards

the parties who enter the contract have rights and liabilities under the contract

one who is not a direct party to a particular contract

a contract in which the parties to the contract intend that the contract benefit a third party

transfer of contractual RIGHTS to a third party. occurs after the original contract was made

transfer of contractual DUTIES to a third party. occurs after the original contract was made

the party assigning the rights to a third party

the party receiving the rights

the person to whom a duty, or obligation, is owed

the person who is obligated to perform the duty

when rights under a contract are assigned unconditionally, the rights of the assignor are considered...

when... 1) a statute expressly prohibits assignment. 2) a contract is for personal services (unless all that remains is monetary payment) 3) the assignment will significantly increase or alter the risks to or the duties of the obligor 4) a contract specifically stipulates that a right cannot be assigned

1) contract cannot prevent an assignment of the right to receive funds 2) the assignment of rights in real estate often cannot be prohibited because such a prohibition is contrary to public policy in most states. 3) the assignment of negotiable instruments cannot be prohibited 4) in a contract for the sale of goods, the right to receive damages for breach of contract or payment of an account owed may be assigned even though the sales contract prohibits such as assignment.

the transfer of land ownership

the party delegating the duties

the party to whom the duties are delegated

when... 1) special trust has been placed in the obligor or when performance depends on the personal skills or talents of the obligor 2) performance by a third party will vary materially from that expected by the obligee under the contract 3) the contract expressly prohibits delegation by including an anti-delegation clause

when original parties agree that the contract performance should be rendered to or directly benefit a third party, this third party is called the...

a third party that has legal rights and can sue the promisor directly for breach of the contract

benefits from a contract in which one party (the promisor) promises another party (the promisee) to pay a debt that the promisee owes to the...

when a contract is made for the express purpose of giving a gift to a third party, this person can sue the promisor directly to enforce the promise.

when the rights have taken effect and cannot be taken away.

1) third party materially changes his or her position in justifiable reliance on the promise 2) third party brings a lawsuit on the promise 3) third party demonstrates their consent to the promise at the request of the promisor or promisee

a third party receives a benefit from a contract even though that person's benefit is not the reason the contract was made. They cannot sue to enforce the contract