Contracts 420
4/20/10 4:12 PM
Obligor
Obligee
Rights v. Duties
Assignment - Assign Contractual Right
Delegation - delegate contractual Duty
Creditor Beneficiary
The performance of the promisor will satisfy an obligation of the promisee to
pay $ to the third party beneficiary
Creditor Beneficiaries
Donee Beneficiaries
Mary's promisor, James Promisee...
Promisor's performance will satisfy an obligation that he has to them
Basically - the
Just learn the concepts of Vogan
Intended 3rd party beneficiary - promisee intended to benefit, promisor was
notified
This brings us to assignment and delegation...
Rights and duties
Assign a right
Delegate a duty
Assignment takes place after a contract is created
Assignment is easier to assign a right, instead of delegate a duty
• Assignments do not usually materially alter obligations, or
delegations in the exchange, they aren’t generally valid.
o Pay to him instead to me, doesn’t make a difference
• Change party – the other party is not necessarily getting what they
bargained for
Usually fungible goods are fine
Offer, Acceptance, Consideration for duties.
Consideration consists of rights and duties
Herzog
Jones - - accident prone
Irace - law firm (was obligated to pay Jones money received in litigation)
Herzog – Doctor
Have to have 2 things:
1) unambiguous intent to assign right to 3rd party
2) Permanent relinquishment of this right
• Has to be irrevocable
o Clear when assignment was made, that assignor was giving
up his right to the third party, and that he’s not retaining any
right to revoke that assignment of the right.
Courts are eager to enforce an assignment
Less eager about a delegation
Certain rights cannot be assigned:
Essentially, assignment of a right creates a metaphysical trust. That a
promisor sets to promisee
Trustee has a beneficiary duty to that trust – special relationship – for full
candor… etc. Any profits, must be disclosed… heightened duties
Obligor becomes the defacto ben