3RD PARTY RIGHTS AND DISCHARGE

privity of contract

only parties to contracts have rights

assignment definiton

transfer of contractual rights

assignor

party transferring rights

assignee

party receiving rights

general rule of assignments

all rights can be assigned, unless an exception applies

rights not assignable: statute

prohibited by law

rights not assignable: personal services

talent or skill required

rights not assignable: material risk

would materially alter another person’s risk

rights not assignable: contract prohibition

unless involving money, real estate ownership, or negotiable instruments

notice of assignment

is not required, but recommended

multiple assignments: priority rule

usually first in time wins; some states first to give notice

delegation defintion

transfer of contractual duties

delegator

party transferring duties, remains liable

delegatee

party performing duties

duties not delegable: personal skills

performance depends on special skill

duties not delegable: trust

special trust relationship

duties not delegable: contract prohibitions

expressed prohibitions

third party beneficiaries

non party, intended to benefit may enforce

creditor beneficiaries

contract made to satisfy duty owed to a third party

donee beneficiaries

contract made to give a gift; can sue promisor

incidental beneficaries

not intend, no rights

condition

future event triggering or ending performance

condition precedent

must occur before the performance required

condition subsequent

terminates duty to perform

discharge by recession

mutual cancelation

discharge by novation

substitution of new party, new contract

discharge by accord and satisfaction

new agreement to settle claim

contract altercation

material change to contract allows termination

statute of limitations

time limit to sue

impossibility of performance

performance objectively impossible

tender

offer to perform

complete performance:

perfect performance

substantial performance

minor discrepancies, still enforceable

material breach

significant failure, excuses performances

anticipatory repudiation

party refuses to perform before time, immediate breach