BUS311_chapter_06 - 6 Third Parties Performance and...

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Chapter Overview
Learning Objectives
After studying this chapter, you will
be able to:
1. Describe how third parties acquire rights
and duties on a contract.
2. Distinguish between assignments and
third-party beneficiary contracts.
3. Describe what contractual duties may be
assigned and delegated.
4. Describe the different ways a contract
may be discharged.
5. Define the different types of damages.
6. Explain when specific performance
would be available as a remedy.
6.1 Third Parties
• Third-Party Beneficiaries
• Assignments
• Delegations
6.2 Performance and Discharge of Contracts
• Discharge by Condition
• Discharge by Performance
• Timeliness
• Anticipatory Breach
• Impossibility of Performance
• Commercial Impracticability
• Frustration of Purpose
• Discharge by New Agreement
• Discharge by Operation of Law
6.3 Remedies for Breach
• Damages
• Specific Performance
• Election of Remedies
6.4 Chapter Summary
• Focus on Ethics
• Case Study: Rosenberg v. Son, Inc.
• Case Study: Campbell Soup Co. v. Wentz
• Critical Thinking Questions
• Hypothetical Case Problems
• Key Terms
Third Parties, Performance
and Discharge of Contracts,
and Remedies
6

CHAPTER 6 Section 6.1 Third Parties
I
n this chapter we will examine several distinct concepts. First, we will look at the role
of third parties in contracts. Up to this point, we have been largely concerned with only
the two people who made the contract. However, sometimes outsiders who were not
a part of the contract may acquire the right to the contract’s benefits, or a duty to perform
the contract. The topics of third-party beneficiaries, assignments, and delegations deal
with these matters.
Second, we will look at the various situations that arise after a valid contract has been
made that may result in discharge of the contract. A discharge means that one or both of
the contracting parties is excused from performance and/or liability on the contract.
Lastly, we will look at the remedies available in the event there is a breach of contract.
6.1 Third Parties
W
hen considering the role of third parties, we must initially determine if we are
focusing on the rights or responsibilities of the contract. If the focus is on the
rights or benefits, the ways in which a third party might acquire those are if
the outsider is an intended third-party beneficiary or if there has been an assignment
of the contract by one of the original contracting parties. An assignment is the transfer
of benefits or rights under a contract to a third party. If instead the focus is on whether
a third party has a duty to perform on the contract, the issue is whether one of the con-
tracting parties has delegated to the outsider.
If, for example, John agrees to paint Mary’s house for $1,000, Mary’s rights under the
contract would include having her house painted (in a reasonable manner), and John’s
rights under the contract would include being paid $1,000 for his labor. If John had, under