musicfor18 wrote:smokeylarue wrote:Jacking this from the Themis thread but I'm curious about it too because this assignment/delegation/third party beneficiary stuff ALWAYS trips me up....
Can someone explain to me 3rd Party Beneficiaries in these contexts?
1) A contracts with B. B owes A $1,000. A tells B to give the $1,000 to C (assigning A's rights to C). A tells C that B will give her money. C goes out and buys $1,000 worth of stuff on her credit card. B later gives $1,000 to A. Can C sue B for not giving her the money?
2) Same facts as above, EXCEPT B doesn't give money at all to A. Can C sue B for payment?
I've been really confused whether incidental beneficiaries can ever vest by detrimental reliance if they had notice (like A telling C that B will give her money).
Also, is there a difference between creditor/donee beneficiaries as to how their interests vest?
If anyone can tell me how they handle assignments of payment on K questions, I would greatly appreciate it! (e.g., who owes who the money, who can sue whom).
I'll take a shot at this, but others should check my work.
(1) This isn't a TPB question; it's an assignment question. I think that C could sue B because B knew about the assignment. I don't think C could sue A, though, because it was a gratuitous assignment (no consideration), which means it's revocable. Is this right?
(2) Yes, C can sue B. (Assignee can sue obligor)
I don't think there's any difference between creditor and donee beneficiaries regarding vesting. The only difference is that a creditor beneficiary can enforce the contract against the promisee to the extent of the pre-existing debt, whereas donee beneficiaries can't enforce the contract against the promisee at all (only the promisor).
According to my notes a gratuitous assignment is irrevocable if the assignee reasonably and foreseeably relied on the assignment.