Third Party Beneficiaries
Only promisors and promisees in a contract are in _________ with each other.
Privity
Life insurance contracts are a prime example of _____________.
Third party beneficiary
One that undermines the substantial benefit of the bargain.
"You pay a painter to paint your house while and he paints it purple."
Material Breach
Discharges performance if it would be objectively impossible to perform due to unforeseen circumstances.
Impossibility
Under UCC modification must have been made in ________________.
Good Faith
A person for whom a promisee extracted the benefits of a promisor's promise is an ___________.
Intended Beneficiary
Even if the third party didn't make the contract they can still sue to enforce. This creates a ____________.
Ex: Holly owes money to Fox, Fox then borrows money from Holly, Holly tells Fox you should pay Lawrence directly. Can Lawrence sue Fox directly? Because
Third party beneficiary obligation
You pay a painter to paint your home white, but he forgets to paint one of your closets.
Minor Breach
(1) If the person needed to do the job dies or becomes unable to perform. (2) If the thing required for the job is destroyed, badly damaged, or never comes into existence. (3) If the law blocks the performance, including new regulations or court orders.
Renders Performance Impossible
Of the two types of third-party beneficiaries who is the only party that has contract rights?
Intended beneficiaries
A party who receives benefits from a promisor's performance and has no rights in the contract.
Incidental Beneficiary
The party in the third-party contract who obtains the promise that will later benefit the third party.
The promisee
One who does not receive substantial benefit of the bargain has the right to ______________________ and ______________________.
sue for damages of the breach and suspend her own performance obligation.
When the goal of the entire contract on both sides becomes moot. There's no reason for it anymore.
Frustration
A transfer of a contract right in two separate steps: 1. Person A has a contract with Person B (contract between two parties) then 2. Person B decides to transfer their rights to Person C
Extra credit: name Person B, C
Assignment
Person B Assignor
Person C Assignee
A promisee extracts from the promisor a promise to render a performance to a third person because the promisee is indebted to the third person.
Creditor Beneficiary
When the third-party manifests assent as requested or bring suit on the promise, or when the third party beneficially relies on that contract that has been made for her benefit.
Third-party beneficiary vest (become enforceable)
An event, which is not certain to occur, that will either trigger or terminate a party's performance obligations.
Conditions
A clear, unjustified statement that the promisor won’t or can’t perform in a meaningful way, or an intentional act by the promisor that makes substantial performance impossible or clearly unlikely.
Repudiation
Three conditions must be satisfied (1) Something unexpected happened (2) The contract was based on the assumption that this thing wouldn’t happen (3) Because it did happen, performing the contract became impracticable
Impracticability
A local bank promises to give Sarah a loan so she can pay off the people she owes money to. The bank’s performance—handing over the loan—goes directly to Sarah, not to her creditors. Because of that, Sarah’s creditors are only _________ and they have ______ to enforce anything against the bank.
incidental beneficiaries no rights
If you are a mere donee beneficiary, your only rights are against the breaching promisor. The donee beneficiary can sue the breaching promisor but not the promisee unless she is a _______________
Creditor beneficiary
You currently have a duty to pay rent until the zoning is upgraded from commercial to residential. Once that occurs your duty to pay $1000 a month is cut off.
Condition subsequent
An exception to the general rule that the promisor must either preform, or pay damages for failure to perform, no matter how burdensome performance has become because of unforeseen circumstances. (This is objective not subjective)
The doctrine of "Impossibility of Performance"
(1) discharges immediately a previous contractual duty or a duty to make compensation (2) creates a new contractual duty; and (3) includes as a party one who neither owed the previous duty nor was entitled to its performance.
Novation