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Restatement (Second) of Contracts § 302.
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1What is an intended third-party beneficiary?
What is an intended third-party beneficiary?2What is an incidental beneficiary?
What is an incidental beneficiary?3In the context of contract law, what is an assignee?
In the context of contract law, what is an assignee?4In the context of contract law, what is a delegatee?
In the context of contract law, what is a delegatee?5In the context of contract law, what is an obligor?
In the context of contract law, what is an obligor?6What is the primary distinction between an intended beneficiary and an incidental beneficiary of a contract?
What is the primary distinction between an intended beneficiary and an incidental beneficiary of a contract?7A terminally ill man required constant care. The man’s daughter was his primary caregiver. Wishing to relieve the daughter of this heavy responsibi...
A terminally ill man required constant care. The man’s daughter was his primary caregiver. Wishing to relieve the daughter of this heavy responsibility, the man entered into a contract with a hospice under which the hospice agreed to care for the man until his death. The hospice understood that the daughter had been caring for the man up to that time, that she was overwhelmed by the task, and that matters would get worse as the man’s condition deteriorated. Four weeks after the contract was executed, the hospice breached the contract by terminating its care of the man. The daughter had to resume the caregiving responsibility and cared for the man until his death. The daughter suffered financial losses as a result of the hospice’s breach of its contract with the man.Does the daughter have a direct right of action against the hospice for her damages?8A homeowner and a landscaper entered into a contract for the construction of an elaborate new garden and patio on the homeowner’s property. One of ...
A homeowner and a landscaper entered into a contract for the construction of an elaborate new garden and patio on the homeowner’s property. One of the homeowner’s neighbors learned that the garden and patio would significantly increase the value of her own property, and she was thus very excited for the homeowner’s upgraded yard. The landscaper ultimately abandoned the job, materially breaching the contract with the homeowner. Does the neighbor have a right to sue the landscaper to enforce the contract?9A mall entered into a lease with a store under which the store rented a large self-standing building for ten years. The store rented the entire bui...
A mall entered into a lease with a store under which the store rented a large self-standing building for ten years. The store rented the entire building, so it was the only tenant. The lease obligated the mall to renovate the building before the store took occupation. The mall hired a contractor to do the renovation. The store had been involved in the design of the renovation, it supervised construction, and the completion date for the contract work was based on the store’s schedule for opening for business. The contractor breached its contract with the mall by completing the renovation six weeks after the contractual due date. As a result, the store suffered a loss of profits for the six weeks that it could not operate its business. Does the store have the right to sue the contractor to recover its lost profits?10A woman hired a lawyer to draft a will that would leave her entire estate to her neighbor. Without the will, the neighbor would not have any right ...
A woman hired a lawyer to draft a will that would leave her entire estate to her neighbor. Without the will, the neighbor would not have any right to inherit from the woman. Unfortunately, the lawyer negligently failed to comply with the formalities required to validate the will. After the testator died, the probate court declared the will invalid. The neighbor received nothing from the woman’s estate, which was distributed to the woman’s heirs according to the rules of intestate succession. Does the neighbor have a right to claim damages from the lawyer as an intended third-party beneficiary of the contract between the lawyer and the woman?11A man owed $3,000 to a lender. The man sold a car to his friend for $3,000. The contract of sale for the car provided for the friend to pay the $3,...
A man owed $3,000 to a lender. The man sold a car to his friend for $3,000. The contract of sale for the car provided for the friend to pay the $3,000 directly to the lender. Does the lender have the right to sue the friend for the $3,000 if the friend fails to pay?12For a contract to create a right of enforcement in an intended third-party beneficiary, must the contract specifically identify the beneficiary?
For a contract to create a right of enforcement in an intended third-party beneficiary, must the contract specifically identify the beneficiary?13If a contract is intended to confer an independent enforcement right on a beneficiary, and that beneficiary sues the promisor, may the promisor ass...
If a contract is intended to confer an independent enforcement right on a beneficiary, and that beneficiary sues the promisor, may the promisor assert against the beneficiary any defenses that the promisor could have asserted if sued by the promisee?14Does an incidental beneficiary to a contract have the right to sue the promisor directly to enforce the promisor’s performance obligation?
Does an incidental beneficiary to a contract have the right to sue the promisor directly to enforce the promisor’s performance obligation?15A lessor leased premises to a lessee. The lease provided that the lessor would be responsible for providing security services. An employee of the l...
A lessor leased premises to a lessee. The lease provided that the lessor would be responsible for providing security services. An employee of the lessee was attacked by a robber while on duty on the premises. At the time, there were no security guards on the premises. Assume that this was a breach of the lessor’s obligation under the lease to provide security services. Does the employee have a direct and independent cause of action against the lessor for compensation for the injuries caused by the robber?16Does an intended third-party beneficiary to a contract have the right to sue the promisor directly to enforce the promisor’s performance obligation?
Does an intended third-party beneficiary to a contract have the right to sue the promisor directly to enforce the promisor’s performance obligation?17If a contract confers an enforceable benefit on an intended third-party beneficiary, does the promisee continue to have a right to enforce the prom...
If a contract confers an enforceable benefit on an intended third-party beneficiary, does the promisee continue to have a right to enforce the promise?18If a contract confers a benefit on an intended third-party beneficiary, giving the beneficiary an independent right of enforcement, when may the pa...
If a contract confers a benefit on an intended third-party beneficiary, giving the beneficiary an independent right of enforcement, when may the parties to the contract revoke that benefit by agreement between themselves, without the consent of the beneficiary?19What is the primary distinction between a creditor beneficiary and a donee beneficiary of a contract?
What is the primary distinction between a creditor beneficiary and a donee beneficiary of a contract?20Does a member of the public have the right to sue for enforcement of a government contract for the benefit of the public at large?
Does a member of the public have the right to sue for enforcement of a government contract for the benefit of the public at large?21What is an assignment of a contract right?
What is an assignment of a contract right?22What is the main difference between an assignee and an intended third-party beneficiary?
What is the main difference between an assignee and an intended third-party beneficiary?23In general, can a party to a contract assign its rights under the contract without the permission of the other party to the contract?
In general, can a party to a contract assign its rights under the contract without the permission of the other party to the contract?24A client and a lawyer entered a representation agreement under which the lawyer was to handle a personal injury suit on the client’s behalf. The la...
A client and a lawyer entered a representation agreement under which the lawyer was to handle a personal injury suit on the client’s behalf. The lawyer committed malpractice by failing to file the lawsuit before the statute of limitations had run. As a result, the client lost the ability to sue on the claim. The client sued the lawyer for malpractice. While the malpractice suit was pending, the client received an offer to sell the malpractice claim for a fraction of its face value. The client decided to accept the offer because it assured an immediate payment and put the risk of losing the case on the buyer. The client therefore sold and assigned the claim. Upon learning that the client had done this, the lawyer objected, arguing that the claim was nonassignable.Would a court likely conclude that the malpractice claim was nonassignable?25A borrower took a loan from a small local bank. The bank assigned its right to monthly payments under the borrower’s loan agreement to a large inte...
A borrower took a loan from a small local bank. The bank assigned its right to monthly payments under the borrower’s loan agreement to a large international bank.May the borrower object to the bank’s assignment on the ground that the borrower intentionally took the loan from the small bank because she wanted to do business with a small local creditor?26A baker entered into a contract with a customer. The baker assigned its payment right under the contract to a supplier. The customer, who owed the ...
A baker entered into a contract with a customer. The baker assigned its payment right under the contract to a supplier. The customer, who owed the payment, knew about the assignment, but the customer paid the baker instead of the supplier.Is the customer liable to the supplier for the payment?27If an assignor assigns a contractual right to an assignee, does the assignee take the right subject to any conditions, restrictions, or defenses ar...
If an assignor assigns a contractual right to an assignee, does the assignee take the right subject to any conditions, restrictions, or defenses arising from the contract that the obligor would have been able to assert against the assignor?28On February 1, a bank loaned a borrower $100,000, to be repaid with interest on May 1. On March 1, the bank assigned its payment right to a financi...
On February 1, a bank loaned a borrower $100,000, to be repaid with interest on May 1. On March 1, the bank assigned its payment right to a financier and gave the borrower notice of the assignment. On March 15, while doing business at the bank, the borrower slipped on the bank’s floor and was injured. On March 20, the bank and the borrower entered into an agreement settling the borrower’s personal injury claim for $75,000. On April 15, the bank was shut down by regulators for financial irregularities. The bank ceased doing business and was scheduled to be liquidated. The bank had not yet paid the settlement to the borrower at the time of the shutdown.When the time comes for the borrower to pay the $100,000 to the financier on May 1, can the borrower deduct the $75,000 owed to him by the bank from the $100,000 payable to the financier?29Must the assignee of contract rights give consideration to the assignor in exchange for receiving an assignment of the assignor’s rights?
Must the assignee of contract rights give consideration to the assignor in exchange for receiving an assignment of the assignor’s rights?30Under what circumstances is an assignment given for no consideration irrevocable?
Under what circumstances is an assignment given for no consideration irrevocable?31If revocation is permitted, how can an assignor revoke an assignment?
If revocation is permitted, how can an assignor revoke an assignment?32A debtor owed $200,000 to a man. The debt was due on September 1. On August 1, the man decided to make a gift of $200,000 to his son to enable the ...
A debtor owed $200,000 to a man. The debt was due on September 1. On August 1, the man decided to make a gift of $200,000 to his son to enable the son to put a down payment on a house. The man gave notice to the debtor to pay the $200,000 debt to the son on September 1. On August 25, the man and his son had a bitter argument, and the man changed his mind about giving the gift to his son. The man gave notice to the debtor on August 26, cancelling the instruction to pay the debt to the son. Is the man’s revocation of the assignment effective?33If a party delegates a contractual duty of performance to a person who is not a party to the contract, does the party remain responsible for ensuri...
If a party delegates a contractual duty of performance to a person who is not a party to the contract, does the party remain responsible for ensuring that the performance is completed?34What is the difference between an assignment and a delegation with regard to what is being transferred?
What is the difference between an assignment and a delegation with regard to what is being transferred?35What is the difference between an assignment and a delegation with respect to the state of the original contracting parties’ rights and responsibil...
What is the difference between an assignment and a delegation with respect to the state of the original contracting parties’ rights and responsibilities after the transfer?36May a party generally delegate his contractual duties to perform?
May a party generally delegate his contractual duties to perform?37A designer entered into a one-year exclusive agency contract with a broker under which the broker undertook to use best efforts to promote and sell...
A designer entered into a one-year exclusive agency contract with a broker under which the broker undertook to use best efforts to promote and sell the designer’s designs and remit the proceeds to the designer after deducting a commission. Three months into the contract period, the broker became very busy and no longer had time to market the designs. The broker gave notice to the designer that she intended to delegate her duties under the contract to another broker who performed similar work. The designer objected. Does the designer have good cause to object to the broker’s intended delegation?38A customer hired an electrician to rewire the customer’s house. The electrician became too busy and knew he could not get to the rewiring job on ti...
A customer hired an electrician to rewire the customer’s house. The electrician became too busy and knew he could not get to the rewiring job on time.Assuming that there is no contractual provision prohibiting delegation, can the electrician delegate the rewiring work to another electrician with equivalent technical expertise?39What is the difference between an assignment of a contract right and the assignment of the contract as a whole?
What is the difference between an assignment of a contract right and the assignment of the contract as a whole?40In a contract for the sale of goods, how does the Uniform Commercial Code (UCC) interpret a provision that prohibits assignment of the contract?
In a contract for the sale of goods, how does the Uniform Commercial Code (UCC) interpret a provision that prohibits assignment of the contract?41A contract for the sale of goods contained a provision stating: “The seller may not assign this contract.”Does this contract provision prevent the ...
A contract for the sale of goods contained a provision stating: “The seller may not assign this contract.”Does this contract provision prevent the seller from assigning its right to payment for the goods?42In a contract for the sale of goods, may the seller delegate its duty to deliver the goods to the buyer?
In a contract for the sale of goods, may the seller delegate its duty to deliver the goods to the buyer?43What is the difference between an assignment and a novation?
What is the difference between an assignment and a novation?44A manufacturer entered into a five-year distributorship agreement with a wholesaler under which the wholesaler undertook to sell the manufacturer’s...
A manufacturer entered into a five-year distributorship agreement with a wholesaler under which the wholesaler undertook to sell the manufacturer’s products. Two years after executing the contract, the wholesaler decided to close the distributorship and sold the distributorship agreement to a company. The manufacturer was upset but felt that it made more sense to allow the company to take over the contract than to look for a new distributor. It therefore agreed to the transfer of the distributorship contract and executed a new contract with the company. The company turned out to be a very poor distributor and lost virtually all the manufacturer’s customers in the area. Assume that the manufacturer can prove that the company’s substandard performance was a breach of contract and can show damages with reasonable certainty. Is the company or the wholesaler liable for those damages?45What right does an intended third-party beneficiary of a contract have, if any, to enforce the contract’s terms?
What right does an intended third-party beneficiary of a contract have, if any, to enforce the contract’s terms?46If a contractual party unilaterally delegates its contractual performance obligations to someone else, what impact does that delegation have on the...
If a contractual party unilaterally delegates its contractual performance obligations to someone else, what impact does that delegation have on the delegating party’s legal responsibility for those contractual obligations?