bu206w6scripts

bu206w6scripts - BU206 Powerpoint Scripts, Week 6 S1...

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BU206 Powerpoint Scripts, Week 6 S1 Contracts: Third Party Rights, Discharge, Breach and Remedies S2 Privity of contract deals with whether a party has contractual rights. Some third parties have privity and others do not. S3 Assignment is transferring contract rights from one party to another. This is not allowed if the contract itself or a statute forbids it. In addition, if the contract is personal in nature, it won’t be allowed – if I agree to teach you to play golf, you can’t assign that right to someone else – the person you assign it to may involve a lot more work and resources on may part than you would. Similarly, you cannot assign rights if it changes the risk of the other party…for example, if I buy an insurance policy, I cannot assign it to someone else, because that changes the risk of the insurer. A landlord could argue that a sublet (which is an assignment of rights) should not be assigned because the assignee is a riskier tenant. S4 Delegation is transfer of duties in a contract from one party to another. Like assignment, this is not allowed if the contract forbids it. Also, if performance depends on a special skill or if the performance will vary from that which is expected. A pe rson with a special skill would include a professional (CPA for example) or an artisan (a painter or photographer). S5 Intended beneficiaries have contractual rights and can sue for enforcement; incidental beneficiaries have no contract rights and cannot sue. An intended 3 rd party beneficiary would include a creditor (the bank that holds your car note is a third party beneficiary on the contract for car insurance); a donee beneficiary, such as a beneficiary on an insurance policy or an annuity has contractual rights, should the benefits come due. An incidental beneficiary, on the other hand, does not have rights. An incidental third party benefits from the contract, but is not the party that the contract was geared toward. For example, if you attend a football game and one team is unprepared and plays poorly, you cannot sue the team for non-performance. S6 One way to discharge contractual duties is through performance. Most contracts require absolute performance – complete performance of one’s contractual duties. Some contracts contain conditions precedent: I agree to buy the house IF I obtain financing. Some conditions terminate a party’s promise to perform – I agree to be your attorney, and after the trial, performance is complete.
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When performance is perfect then it is complete. Substantial performance – performance that does not materially vary from the contract and provides substantially the same benefits as the promised performance – discharges one’s contractual duties. Good faith is required with substantial performance – the party must have tried to fully comply, but was unable to. Contracts are assumed to be performed to the satisfaction of a “Reasonable person”….if
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This note was uploaded on 09/10/2011 for the course BU 206 taught by Professor Rolfes during the Spring '11 term at Herzing.

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bu206w6scripts - BU206 Powerpoint Scripts, Week 6 S1...

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