K 3PB - MBE
What is the critical issue in 3PB law?
whether the 3pB has standing to enforce the K
What are the 3 categories of 3PB under the 1st Restatement?
(1) creditor beneficiary
(2) donee beneficiary
(3) incidental beneficiary
What is the definition of a creditor beneficiary under the 1st restatement?
PEE seeks a performance from the POR that will satisfy an obligation owed to a 3P
What is the definition of a donee beneficiary under the 1st restatement?
PEE seeks performance from the POR in order to make a gift of that performance to a 3P
What is the definition of an incidental beneficiary under the 1st restatement?
3P who will benefit from a POR performance as a practical matter but aren't either creditor or donee beneficiaries
What are the 2 categories of 3PB under the 2nd restatement?
(1) intended beneficiaries
(2) incidental beneficiaries
What is the "intent to benefit test"?
did the K parties expressly intend to benefit this 3P
What is the purpose of the "intent to benefit" test?
determining whether a party is an intended beneficiary
What is the definition of an incidental beneficiary under the 2nd restatement?
3P who will be benefit from a POR performance as a practical matter but aren't intended beneficiaries
Does an incidental beneficiary enjoy any right to seek enforcement of the K?
May an intended 3PB sue the POR?
Does a 3PB have any rights against the PEE in connection with the promised performance under the new K?
When will a 3PB have rights against the PEE?
when there is a prior obligation b/t the PEE and the 3PB
Parties to a K may modify or rescind a 3PB provision w/o the beneficiary's consent unless what?
the beneficiary's rights under the K have vested
In what 4 situations does the beneficiary's rights vest under the K?
(1) 3PB brings suit on the matter
(2) 3PB changes his position in justifiable reliance on the K
(3) 3PB manifests assent to the K at the request of the POR or PEE
(4) rights of the 3PB have vested under the express terms of the K
What defenses does the POR have against the 3PB?
any valid defense the POR has against the PEE are also effective against the 3PB
May a POR assert defenses based on separate Xs with the PEE?
When the POR doesn't perform the PEE has what kind of claim against the POR?
breach of K
If the POR's performance is intended to benefit a donee beneficiary, may the PEE recover damages?
no b/c he hasn't suffered any economic loss
may obtain SP if appropriate
If the POR's performance is intended to benefit a creditor beneficiary, what remedies is the PEE entitled to?
SP of the POR obligation
Some courts refuse to allow the PEE to recover damages against the POR unless what?
the PEE has already made payment to the 3PB to cover the default
What is an assignment?
a transfer of a right to receive a performance under a K
To make an effective assignment of a K right, the owner of the right must do what?
(1) manifest an intention
(2) to make a present transfer of an existing right
What is the general rule about the assignment of rights?
all rights are assignable subject to a few exceptions
In what instances are rights not assignable?
(1) assignment would materially alter the risks to or obligations of the other party
(2) when the OBR has a personal interest in rendering the performance in question to the OBE and not a 3P
(3) when it would violate applicable law or public policy
(4) when the assignment is prohibited by K
How do most courts treat an assignment in violation of a K restriction?
a breach of K by the ASR but not a basis for nullifying OBE rights
an anti-assignment clause takes away the right but not the power to assign
Is an assignment of value valid against the OBR?
Is an assignment of value revocable by the ASR?
What are the legal effects of a gratuitous assignment as b/t the ASE and OBR?
valid against the OBR who can't claim lack of consideration as a defense
What is the legal effect of a gratuitous assignment as b/t the ASR and the ASE?
under the law of gifts an executory gift is revocable but an excecuted gift is not
What is the basic rule regarding the rights of the ASE against the OBR?
an ASE gets whatever rights to the K that his ASR had AND the ASE takes subject to whatever defenses the OBR could have raised against the ASR
Is the OBR's payment to the ASR a defense the OBR can raise against the ASE?
yes if the payment was made b4 notice of the assignment was given to the ASE
Unless a contrary intention is manifested, one who assigns or purports to make an assignment for value impliedly warrants what 2 things?
(1) that he will do nothing to defeat or impair the value of the assignment and has no knowledge of any fact that will do so
(2) that a right as assigned actually exists and is subject to no limitations or defenses good as against the ASR
Does an assignment in and of itself operate as a warranty to the ASE that the OBR is solvent or that the OBR will perform his obligation?
Who is an OBR?
the party with the obligation to perform
Who is an ASE?
the party to whom the right was assigned
Who is an ASR?
the party who assigned the right
Who is an OBE?
the party for whom the performance obligation is owed
Who is the DGR?
the party who delegated his performance to a 3P
Who is a DGE?
the party to whom the performance obligation was delegated
Does a delegation of duties operate as a transfer of those duties from the DGR to the DGE?
absent a novation a delegation doesn't relieve the DGR from his obligations under the K
Can the OBE still sue the DGR after he has delegated his duties under the K?
If the delegation was for consideration what CoA does the DGR have against the DGE who doesn't perform?
breach of K
If the delegation was for consideration what CoA does the OBE have against the DGE who doesn't perform?
an action as an intended 3PB of the delegation
What is the general rule regarding delegable duties?
all K duties/obligations can be delegated
What are the exception to the general rule that all K duties and obligations are delegable?
(1) where the performance in question is personal
(2) when the K prohibits the delegation
K 3PB - MBE
K 3P Beneficiaries