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BSL - 16 - Transfer of Contract
BSL - 16 - Transfer of Contract
11/3/2008 12:21:00 PM
Transfer of Contract rights and/or duties y Assignment o Terms o All rights can be assigned unless o Rights of Assignee o Assignors Liability Implied Warranty If assignment is supported by consideration, then it comes with an automatic guarantee from the assignor that the contract is enforceable but no guarantee that the obligor will pay Express Warranty If the obligor doesnt pay for any reason the assignor will pay o Importance of notifying obligor of assignment If obligor performs contract before receiving notice, they have no liability to an assignee If after receiving notification the obligor performs the original contract, they are still liable to perform to the assignee o Successive assignments (when an assignor assigns the same right to more than one assignee in succession) Majority (American) Rule: 1st in time, 1st in right Minority (English) Rue: 1st to give notice to the obligor is entitled to the performance y Delegation- transfer of Contract Duty o Terms Delegator is the party who transfers their duty Delegatee is the party to who the duty is transferred o All duties can be delegated unless obligee has a substantial interest in having the original obligor perform OR prohibited by contract General prohibition against transfer or specific anti-delegation clause o Effect of delegation Delegatees liability depends on their assumption of the duties Delegators liability Remains liable until Delegatee performs (Delegation of a duty does not automatically extinguish the delegators liability)
UNLESS obligee gives a novation (obligee explicitly agrees to release the delegator and substitute the Delegatee in their place) Third Party Beneficiaries (3rd PB) o Incidental 3rd party beneficiaries = no rights under the Contract o Intended 3rd party beneficiaries= rights under the Contract (you can sue under the contract) Subject to defenses (that actually deal with contract parties) Rights against promisee (do you (3rd party) have any rights against party who entered contract on 3rd partys behalf) Creditor 3rd party beneficiary (there was consideration)= yes you have a cause of action Donee 3rd party beneficiary (no consideration)=no Example: parents who are buying the car for child
11/3/2008 12:21:00 PM
11/3/2008 12:21:00 PM