Githler Hunter Duh OK I promise to pay

Githler Hunter Duh………………. OK. I promise to pay you $8500. This is a promise not supported by consideration and is not enforceable. (Hunter can’t sue me if I don’t pay him. )

Githler I promise to pay you $8500 at the end of the job if you paint my house next April. Hunter I accept. I promise to paint your house next April if you pay me $8500 at the end of the job. This is a promise supported by consideration, and therefore a contract. (If he paints my house next April and I don’t pay him, he can sue me to enforce the promise. )

Third Party Rights Privity of Contract - only the parties to a contract may sue to enforce it “standing to sue” the right to sue another party Githler I’ll give you two dollars for that snack bar. Frank It’s a deal! Murray can’t sue to enforce this contract Murray

Assignment of a Right Assignor - assigns (gives) gives the right (to receive performance) to a third party Assignee – gets the right (to receive performance) from the Assignor Obligor - owes performance (of the duties in the contract) Githler Frank Murray

Assignment of a Right Assignor - assigns (gives) gives the right (to receive performance) to a third party Assignee – gets the right (to receive performance) from the Assignor Obligor - owes performance (of the duties in the contract) Githler Assignor Frank Obligor Now owes performance to Murray The right to receive performance ( Githler makes an assignment to Murray Assignee )

“The Assignee stands in the Assignor’s shoes” (Assignee’s rights are subject to the obligor’s defenses) Githler Assignor Frank Obligor The assignor can only assign what he has Now owes performance to Murray ( ) unless he has a defense, like: Lack of capacity Fraud Statute of Limitations Murray Assignee

A very typical example…. (seriously) Assignor Beneficial will sell (and assign) the right to collect Frank’s debt for $1800 to the MCM collection company Owes $10, 923. 65 $1800 the right to collect Frank Obligor Frank now owes $10, 923. 65 to MCM Assignee MCM Collections

Assignee Obligor Nathan Frank 77 Rowell Hill Road Newfield, NY 14867 Mr. Frank Assignor

But Nathan has a defense – he’s under 18! He’s going to disaffirm the contract! This defense is as good against MCM as it would have been against Beneficial could only assign the rights that it had: The right to collect from Nathan, subject to any defenses that Nathan has

Some things may not be assigned: 1. If it’s against the law (statute) e. g. : welfare benefits, workers compensation benefits

2. Personal services - services unique to the person rendering them

3. Anything that will increase the risk or duties of the obligor

(“This right shall not be assignable”) 4. If it says so in the contract, except the right to receive money is always assignable

Notice of Assignment It is not necessary to notify the obligor of the assignment

Delegation of a Duty Delegator - the party making the delegation Delegatee - the party to whom the duty is delegated Obligatee - the party to whom the duty is owed Githler Frank I accept your generous offer, good sir. Peasant! I’ll pay you $20 to wash my car. Murray

Delegation of a Duty Delegator - the party making the delegation Delegatee - the party to whom the duty is delegated Obligatee - the party to whom the duty is owed Githler Obligatee Frank Delegator Frank delegates duty to Murray now owes duty to Githler Murray Delegatee

Delegation of a Duty Delegator - the party making the delegation Delegatee - the party to whom the duty is delegated Obligatee - the party to whom the duty is owed Githler Obligatee Frank Delegator Frank delegates duty to Murray now owes duty to Githler Frank is still responsible to Githler for performance of the duty! Murray Delegatee

Some things may not be delegated: 1. When there’s a special trust in the duty e. g. a specific lawyer or financial manager 2. When the duty requires special skills or talents e. g. a surgeon, a portrait painter 3. When it’s prohibited in the contract

Third Party Beneficiaries Intended Beneficiary one for whose benefit the contract is made This person can sue to enforce the contract I’ll pay you two dollars to give that snack bar to. Murray. Githler Frank Very well. Frank is a party to this contract and has standing to sue to enforce it Murray Intended Beneficiary

Incidental Beneficiary receives a benefit from the contract, but that wasn’t the primary intention of the parties Githler Frank Motors Toyota is not a party to this contract Toyota Corporation Incidental Beneficiary