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Law of Commercial Transactions
Chapter 15-Third Party Rights and Discharge
29
Law
Undergraduate 4
09/14/2010

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Cards

Term
privity of contract
Definition
the state of two specified parties being in a contract
Term
assignment
Definition
the transfer of contractual rights by an obligee to another party
Term
assignor
Definition
an obligee who transfers a right
Term
assignee
Definition
a party to whom a right has been transferred
Term
ant-assignment clause
Definition
a clause the prohibits the assignment of rights under the contract
Term
delegation of duties
Definition
a transfer of contractual duties by an obligor to another party for performance.
Term
delegator
Definition
an obligor who has transferred his or her duty
Term
delegatee
Definition
a party to whom a duty has been transferred
Term
assumption of duties
Definition
a situation in which a delegation of duties contains the term "assumption", "I assume the duties", or other similar language. In such a case, the delegatee is legally liable to the obligee for nonperformance.
Term
anti-delegation clause
Definition
a clause that prohibits the delegation of duties under the contract
Term
intended third party beneficiary
Definition
a third party who is not in privity of contract but who has rights under the contract and can enforce the contract against the promisor.
Term
donee beneficiary contract
Definition
a contract entered into with the intent to confer a benefit or gift on an intended third party.
Term
donee beneficiary
Definition
a third party on whom a benefit is to be conferred.
Term
creditor beneficiary contract
Definition
a contract that arises in the following situation:
(1) a debtor borrows money
(2) the debtor signs an agreement to pay back the money plus interest
(3) the debtor sells the item to a third party before the loan is paid off, and
(4) the third party promises the debtor that he or she will pay the remainder of the loan to the creditor.
Term
creditor beneficiary
Definition
an original creditor who becomes a beneficiary under the debtor's new contract with another party.
Term
incidental beneficiary
Definition
a party who is unintentionally benefited by other people's contracts. Has no rights to enforce or sue.
Term
covenant
Definition
an unconditional promise to perform.
Term
condition
Definition
a qualification of a promise that becomes a covenant if it is met.
Term
condition precedent
Definition
a condition that requires the occurrence of an event before a party is obligated to perform a duty under a contract.
Term
personal satisfaction test
Definition
a subjective test that applies to contracts involving personal taste and comfort.
Term
reasonable person test
Definition
an objective test that applies to commercial contracts and contracts involving mechanical fitness. Most contracts the require the work to meet the satisfaction of third person (i.e. engineer, architect) are judged by this standard.
Term
condition subsequent
Definition
a condition who occurrence or nonoccurrence of a specific event automatically excuses the performance of an existing contractual duty to perform.
Term
concurrent condition
Definition
a condition that exists when the parties to a contract must render performance simultaneously; each party's absolute duty to perform is conditioned on the other party's absolute duty to perform.
Term
implied-in-fact condition
Definition
a condition that can be implied from the circumstances surrounding a contract and the parties' conduct.
Term
novation agreement (or simply "novation")
Definition
an agreement that substitutes a new party for one of the original contracting parties and relieves the exiting party of liability on the contract.
Term
impossibility of performance
Definition
nonperformance that is excused if a contract becomes impossible to perform. must be objective, not subjective
Term
force majeure clause
Definition
a clause in a contract in which the parties specify certain events that will excuse nonperformance
Term
commercial impracticability
Definition
nonperformance that is excused if an extreme or unexpected development or expense makes it impractical for the promisor to perform.
Term
statute of limitations
Definition
a statute that establishes the time period during which a lawsuit must be brought; if the lawsuit is not brought within this period, the injured party loses the right to sue.
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