Exam 17: Third Parties Contract Rights

Ronny contracted Smiths to supply a dress for his niece, Lucie, on her birthday. Since the dress was intended for Lucie, Ronny cannot modify the contract without her consent.

A donee beneficiary:

After an assignment, the assignee is entitled to whatever performance the assignor had a right to under the original contract.

Any assignment that would materially alter the duties of the promisor is unenforceable, because the promisor cannot be required to do something significantly more than, or different from, what he or she originally agreed to do.

Assignees should promptly notify the promisor of an assignment because the promisor who renders performance to the assignor without notice of the assignment:

An underground water main burst in Manhattan and flooded the building where Acme Inc. has an electricity supply substation. A fire resulted and disrupted electric power for four days. This occurred during the biannual "Buyers Week," when merchandisers from around the world were in town to visit fashion showrooms and place orders for future seasons. Around 200 merchandisers brought suit against Acme. Some of the businesses had no direct contractual relationship with Acme. They argued that their lease agreements with their landlords, who were the direct contracting entities with Acme, obligated them to pay a share of the electricity expenses and therefore they could sue under the contract agreement between the landlords and Acme. Are the demands of the businesses with no direct contractual relationship with Acme justified?

Assignees:

With regard to contract law, what is a delegation?

Once a donee or creditor beneficiary has accepted a contract, the original parties:

Annie buys a car from Bob's Motors. She then sells the car to Michael, who agrees to make the remaining payments Annie owes Bob's Motors. Bob's Motors is a creditor beneficiary of Annie, and can therefore recover the balance due only from her, and not from Michael.

Only certain specified individuals, and not members of the general public, can be incidental beneficiaries of contracts.

Zeta is contracted to perform a violin solo for Pat. Zeta assigns the contract to Roy. Which of the following statements is true about delegation of duty in this case?

If a promisor's performance will satisfy a legal duty that the promisee owes a third party, the third party is a(n) _____.

GP Corp. had been contracted by the public services department of Kingston to install monitoring systems at all public places. This was to be done in two phases and the city had the right to terminate the contract. GP had plans to use a subcontractor, Rex, whom they usually hired for the last phases of projects executed by them. After two weeks of the work, the city of Kingston found that things were not going according to plan and terminated GP's contract. Under these circumstances:

Life insurance contracts are a common form of incidental beneficiary contract.

The municipality of College Town enters into a contract with Wooster Inc. to have the town's roads repaired. Katie is a resident of College Town and will be considered a(n):

Incidental beneficiaries acquire no rights under the contract and so cannot sue for nonperformance.

With regard to contract law, what is an assignment?

Assignments of future wages are not effective because they:

The transfer of rights under a contract is referred to as a(n) _____.