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Click your mouse anywhere on the screen to advance the text in each slide. After the starburst appears, click a blue triangle to move to the next slide or previous slide. 1 16 p Business Law for a New Century

Quote of the Day “For kindness begets kindness evermore, but he from whose mind

Quote of the Day “For kindness begets kindness evermore, but he from whose mind fades the memory of benefits, noble is he no more. ” Sophocles, Greek playwright 2 16 p Business Law for a New Century

Third Party Beneficiary Someone who was not a party to the contract but stands

Third Party Beneficiary Someone who was not a party to the contract but stands to benefit from it. p An intended beneficiary may enforce a contract if the parties intended her to benefit and if either: • enforcing the promise will satisfy a duty of the promisee to the beneficiary; or • the promisee intended to make a gift to the beneficiary. 3 16 p Business Law for a New Century

Third Party Beneficiary (cont’d) p Any beneficiary who is not an intended beneficiary is

Third Party Beneficiary (cont’d) p Any beneficiary who is not an intended beneficiary is an incidental beneficiary, and may not enforce the contract. p If the promisee is fulfilling some duty, the third party beneficiary is called a creditor beneficiary. 16 4 p Business Law for a New Century

Assignment and Delegation p A contracting party may transfer his rights under the contract,

Assignment and Delegation p A contracting party may transfer his rights under the contract, which is called an assignment of rights. p A contracting party may transfer her duties pursuant to the contract, which is a delegation of duties. p The assignor is the one making an assignment and the assignee is the one receiving an assignment. 5 16 p Business Law for a New Century

Assignment p Any contractual right may be assigned unless assignment: • (a) would substantially

Assignment p Any contractual right may be assigned unless assignment: • (a) would substantially change the obligor’s rights or duties under the contract; or • (b) is forbidden by law or public policy; or • (c) is validly precluded by the contract itself. p Assignment is also prohibited when the obligor is agreeing to perform personal services. 6 16 p Business Law for a New Century

How Rights Are Assigned p Writing p Consideration • An assignment for consideration is

How Rights Are Assigned p Writing p Consideration • An assignment for consideration is irrevocable. • A gratuitous assignment is made as a gift for no consideration. • A gratuitous assignment is generally revocable if it is oral and generally irrevocable if it is written. p Notice to the Obligor 7 16 p Business Law for a New Century

Rights of the Parties after Assignment p Once the assignment is made and the

Rights of the Parties after Assignment p Once the assignment is made and the obligor notified, the assignee may enforce her contractual rights against the obligor. p The obligor may generally raise all defenses against the assignee that she could have raised against the assignor. 8 16 p Business Law for a New Century

Assignor’s Warranty p Difference under the UCC • In general, the obligor on a

Assignor’s Warranty p Difference under the UCC • In general, the obligor on a sales contract may assert any defenses against the assignee that arise from the contract, and that arose before notice of assignment. • An agreement by a buyer that he will not assert against an assignee any claim or defense that he may have against the seller is generally enforceable if he took the assignment in good faith, for value, without notice of the potential defenses. 9 16 p Business Law for a New Century

Delegation of Duties p Most duties are delegable. But delegation does not by itself

Delegation of Duties p Most duties are delegable. But delegation does not by itself relieve the delegator of his own responsibility to perform the contract. p An obligor may delegate unless • (1) delegation would violate public policy, or • (2) the contract prohibits delegation, or • (3) the obligee has a substantial interest in personal performance by the obligor. 10 16 p Business Law for a New Century

Novation p A novation is a three-way agreement in which the obligor delegates all

Novation p A novation is a three-way agreement in which the obligor delegates all duties to the delegatee and the obligee agrees to look only to the delegatee for performance. p The obligee releases the obligor from all liability. 11 16 p Business Law for a New Century

“A moment’s caution should enable contracting parties to anticipate and realistically appraise any rights

“A moment’s caution should enable contracting parties to anticipate and realistically appraise any rights and responsibilities of third parties. ” 16 12 p Business Law for a New Century

Link to the Internet p Clicking on the orange button below will link you

Link to the Internet p Clicking on the orange button below will link you to the website for this book. (You must first have an active link to the internet on this computer. ) p Once there, click: • • p 13 Online Study Guide, then Your choice of a chapter, then Practice, then Internet Applications You should then see web links related to that chapter. Click here! Click above to return to the slide show. 16 p Business Law for a New Century