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I promise to pay you $8500.

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. Hunter.

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I promise to pay you $8500.

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  1. 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.)

  2. Githler Hunter I accept. I promise to paint your house next April if you pay me $8500 at the end of the job. I promise to pay you $8500 at the end of the job if you paint my house next April. 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.)

  3. 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 I’ll give you two dollars for that snack bar. Githler Frank It’s a deal! Murray can’t sue to enforce this contract Murray

  4. Assignment of a Right Assignor - assigns (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

  5. Assignment of a Right Assignor - assigns (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 Assignor Obligor Now owes performance The right to to Murray receive performance ( ) Githler makes an assignment to Murray Murray Assignee

  6. “The Assignee stands in the Assignor’s shoes” (Assignee’s rights are subject to the obligor’s defenses) Githler Frank Assignor 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

  7. A very typical example…. (seriously) Assignor Beneficial will sell (and assign) the right to collect Owes $10,923.65 Frank’s debt for $1800 to the MCM collection company $1800 the right to collect Frank Obligor Frank now owes $10,923.65 to MCM Assignee MCM Collections

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

  9. 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. Beneficial could only assign the rights that it had: The right to collect from Nathan, subject to any defenses that Nathan has

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

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

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

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

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

  15. 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

  16. 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 Obligatee Delegator Frank delegates duty to Murray Murray now owes duty to Githler Murray Delegatee

  17. 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 Obligatee Delegator Frank delegates duty to Murray Murray now owes duty to Githler Frank is still responsible to Githler for performance of the duty! Murray Delegatee

  18. 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 talentse.g. a surgeon, a portrait painter 3. When it’s prohibited in the contract

  19. 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 toMurray. Githler Frank Very well. Frank is a party to this contract and has standing to sue to enforce it Murray Intended Beneficiary

  20. 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

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