Deck 5: Third-Party Interests

Question 1

All of the following statements are FALSE; state why they are false and then rewrite them as a
true statement. Write a brief fact pattern that illustrates your answer
If a contract is silent as to the ability to delegate and/or assign a contract, then all assignments and/or delegations are permissible.

Answer 1

An assignment is when a contract is entered into with a party but then due an event, all of the contractual obligations in the contract along with the obligations are transferred to another party. Risks are then transferred to the party which has transferred the contractual obligations.
For an assignment or delegation to be valid, in case if the terms of the contract are valid, there should be a reasonable conditions. This means that an assignment would not amend the rights and the duties in the contract of the parties in the contract.
If the contract is silent as to the ability of delegate and or assign the contract, then all assignments or delegations are permissible, if it is reasonable.

Question 2

Identify the parties as the obligor, promisor, promisee, third-party donee beneficiary,
third-party creditor beneficiary, assignor, assignee, delegant, or delegate in the following
situations. Additionally, state whether the assignment or delegation is valid and why
Mr.Smith takes out a life insurance policy with State Farm Insurance Company stating that his wife and three children should receive a $500,000.00 payment upon his death.

Answer 2

When a contract is made between the parties, the roles of each party in the contract are as follows:
• Promisor is the party who offers to give something in return for the performance of the contract.
• Promisee is the party who agrees to perform the act for the pay offered by promisor.
• In certain cases, the benefits of the contract are gifted to the third party beneficiaries, which are of two type's i.e. creditor beneficiary and donee beneficiary. The third party donee beneficiary is legal heirs who possess all rights to demand the benefits of the contract. The third party creditor beneficiary is nonparty to the contract but he possesses the enforceable rights to sue the contract.
Mr. Smith is considered as promisee as he was promised the benefits of life insurance policy from the promisor state Farm insurance company. Mr. Smith wife and children are considered as donee beneficiaries as they have legal right to demand the insurance benefits from State Farm Insurance to receive $500, 00.00 upon Mr. Smith death.
This contract is valid because Insurance Company (promisor) can consider Mr. Smith (promisee) request to add his family members (third party beneficiaries) as nominees to receive the insurance payment after his death.

Question 3

All of the following statements are FALSE; state why they are false and then rewrite them as a
true statement. Write a brief fact pattern that illustrates your answer
Once a valid delegation has been made, the delegant is absolved of liability for the performance obligations of the contract.

Answer 3

Delegation, which is also known as sublease refers to parties delegating the duties to the third party under a contract. For instance: if promisor and promisee made a contract, then promisee can sublease the third party company to delegate their duties of performance.
In the delegation contract, delegate is liable under the contract, which means that delegate is party to a suit to enforce the delegation. Therefore, the statement "Once a valid delegation has been made, the delegate is absolved of liability for the performance obligations of the contract" is incorrect.
The correct statement is "once a valid delegation has been made, the delegate is liable for the performance obligations of the contract."

Question 4

Identify the parties as the obligor, promisor, promisee, third-party donee beneficiary,
third-party creditor beneficiary, assignor, assignee, delegant, or delegate in the following
situations. Additionally, state whether the assignment or delegation is valid and why
Mr.Smith promises to pay Nancy Nurse $500.00 per week to take care of his elderly mother.

Question 5

All of the following statements are FALSE; state why they are false and then rewrite them as a
true statement. Write a brief fact pattern that illustrates your answer
All third-party beneficiaries must consent to the terms of the contract when it is made.

Question 6

Identify the parties as the obligor, promisor, promisee, third-party donee beneficiary,
third-party creditor beneficiary, assignor, assignee, delegant, or delegate in the following
situations. Additionally, state whether the assignment or delegation is valid and why
Mr.Smith contracted with Gorgeous Lawn Company for a substantial amount of landscaping to be done on his property.Mrs.Jones, his neighbor, put her house on the market and got more than she was asking because the buyer loved the beautiful views of Mr.Smith's gardens.

Question 7

All of the following statements are FALSE; state why they are false and then rewrite them as a
true statement. Write a brief fact pattern that illustrates your answer
There are no differences between a third-party creditor beneficiary and a third-party donee beneficiary.

Question 8

Identify the parties as the obligor, promisor, promisee, third-party donee beneficiary,
third-party creditor beneficiary, assignor, assignee, delegant, or delegate in the following
situations. Additionally, state whether the assignment or delegation is valid and why
Mrs.Jones found out that Mr.Smith was unable to pay for all that landscaping and Gorgeous Lawn Company was going to pull out all the new plantings.Mrs.Jones agrees to pay for the landscaping.

Question 9

All of the following statements are FALSE; state why they are false and then rewrite them as a
true statement. Write a brief fact pattern that illustrates your answer
A third-party beneficiary may be added to the contract at any time before performance is due from either party.

Question 10

Identify the parties as the obligor, promisor, promisee, third-party donee beneficiary,
third-party creditor beneficiary, assignor, assignee, delegant, or delegate in the following
situations. Additionally, state whether the assignment or delegation is valid and why
Mr.Smith, an artist, has a contract with Connie Collector for the sale of one of his paintings.Mr.Smith tells Connie to pay Mrs.Jones directly.

Question 11

Identify the parties as the obligor, promisor, promisee, third-party donee beneficiary,
third-party creditor beneficiary, assignor, assignee, delegant, or delegate in the following
situations. Additionally, state whether the assignment or delegation is valid and why
Connie's check bounces and Mrs.Jones is distressed.To whom can she look for the money Connie Mr.Smith Both

Question 12

Identify the parties as the obligor, promisor, promisee, third-party donee beneficiary,
third-party creditor beneficiary, assignor, assignee, delegant, or delegate in the following
situations. Additionally, state whether the assignment or delegation is valid and why
It has been a very busy and prosperous season and Gorgeous Lawn is booked up; the company makes an agreement with Adequate Acreage to do the landscaping at Mr.Smith's house.

Question 13

Identify the parties as the obligor, promisor, promisee, third-party donee beneficiary,
third-party creditor beneficiary, assignor, assignee, delegant, or delegate in the following
situations. Additionally, state whether the assignment or delegation is valid and why
Adequate Acreage does not do a very good job at Mr.Smith's house.Mr.Smith wants to sue both Adequate Acreage and Gorgeous Lawn for failure of performance.Can he