BL-Chapt16 - Print Chapter Page 1 of 18 Third Party Rights...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Third Party Rights Chapter Introduction 16-1 Assignments and Delegations 16-1a Assignments 16-1b Delegations 16-1c Assignment of 'All Rights' 16-2 Third Party Beneficiaries 16-2a Types of Intended Beneficiaries 16-2b The Vesting of an Intended Beneficiary's Rights 16-2c Intended versus Incidental Beneficiaries Chapter Recap Page 1 of 18 Print Chapter 2010-8-30 ..
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter Introduction Once it has been determined that a valid and legally enforceable contract exists, attention can turn to the rights and duties of the parties to the contract. A contract is a private agreement between the parties who have entered into it, and traditionally these parties alone have rights and liabilities under the contract. This principle is referred to as privity of contract . A third party –one who is not a direct party to a particular contract–normally does not have rights under that contract. There are exceptions to the rule of privity of contract. For example, privity of contract between a seller and a buyer is no longer a requirement to recover damages under product liability laws (see Chapter 23). In this chapter, we look at two other exceptions. One exception allows a party to a contract to transfer the rights or duties arising from the contract to another person through an assignment (of rights) or a delegation (of duties). The other exception involves a third party beneficiary contract –a contract in which the parties to the contract intend that the contract benefit a third party. Page 2 of 18 Print Chapter 2010-8-30 ..
Background image of page 2
16-1 16-1a Assignments and Delegations Assignments Terminology The Effect of an Assignment Exhibit 16–1. Assignment Relationships Rights Assigned Are Subject to the Same Defenses In a bilateral contract, the two parties have corresponding rights and duties. One party has a right to require the other to perform some task, and the other has a duty to perform it. The transfer of contractual rights to a third party is known as an assignment . The transfer of contractual duties to a third party is known as a delegation . An assignment or a delegation occurs after the original contract was made. Assignments are important because they are involved in many types of business financing. Banks, for example, frequently assign their rights to receive payments under their loan contracts to other firms, which pay for those rights. If you obtain a loan from your local bank to purchase a car, you may later receive in the mail a notice from your bank stating that it has transferred (assigned) its rights to receive payments on the loan to another firm and that, when the time comes to repay your loan, you must make the payments to that other firm. Financial institutions that make
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/12/2011 for the course ACCT 362 taught by Professor Mint during the Fall '11 term at CUNY Queens.

Page1 / 18

BL-Chapt16 - Print Chapter Page 1 of 18 Third Party Rights...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online