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circumstances surrounding the making of the contract.X.Third-Party BeneficiariesThree parties in a third-party beneficiary problem: promisor (party that made the originalpromise that benefited third-party), promisee (original party to which the contract was made),and third-party beneficiary (stranger to original contract, that would benefit from itsperformance).Know which party has which labelpromiseeThird-partypromisorbeneficiary§302 Intended and Incidental Beneficiaries (pg. 953): is intended beneficiary if recognition ofright to performance shows intention of parties by (1) satisfying promise obligation to paybeneficiary; (2) circumstances indicate promisee intends to give beneficiary benefit ofperformance.Incidental beneficiary: beneficiary who is not an intended beneficiary§309 (1) no duty if contract is voidable/unenforceable at time of formation; (2) contract ceasesto be binding due to unsatisfied condition (TPB has no right to collect from Po); (3) TPB has norights greater than Pe (derivative right); and (4) if Pe pulls TPB into dispute between Po and Pe,TPB is subject to the claim.TPB is actually subject to promisor’s defenses against the promisee.If the purpose of promisee is to benefit third party beneficiary, TPB has a valid claim because Pehas made the consideration with Promisor.XI.Assignment, Delegation, and Other TransfersRightsassignedanddutiesdelegatedIn assigned rights cases (aka assigning the contract cases):Assignor-person that makes assignment in original contract
Assignee-person to whom the assignment of rights is made – not party of originalObligor-original contracting party to which obligation is assignedIn delegation of duties cases:Delegator-person that makes delegations in original contractDelegatee-person to whom the delegation of duties is made –not party of originalObligee-original contracting party to which duty is delegatedNovation: happens when one party leaves the relationship and is replaced with another whothen inherits the original party’s rights and duties.Novation agreements don’t have to comply with traditional rules of assignment anddelegations. BUT unlike other agreements, consent to a novation is never presumed. Must haveall party’s intention for second agreement to be a novation and replace the original contract.For an assignment to be valid and enforceable against the assignor's creditor (the obligor), theassignor must make clear his intent to relinquish the right to the assignee and must not retainany control over the right assigned or any power of revocation. The assignment takes effectthrough the actions of the assignor and assignee and the obligor need not accept theassignment to render it valid. In novation, must make sure there’s no imbalance in duties being performed.§317 Restatement – assignment of a right. assignment will succeed unless assignment wouldsignificantly change things with obligor.