CRR After Exam 2 Onwards
Delegation of Duties
When one party delegates his duties under the contract to a 3rd party.
Ex: Kim gets a student loan for $30,000 from First Bank. Kim delegates her duty to pay the $30,000
to Han.
Kim delegates her duty to repay First Bank to Han, making Kim the
delegator
Han now has the obligation to pay first bank; he is the
delegatee
A delegation does NOT extinguish all of the delegator's obligations under the ontract; if the delegatee
does not perform,
the delegator is still liable!
Example where delegator is still liable
If Han does not pay First Bank, Kim must. If neither Han nor Kim pys, First Bank can sue either or
both of them (in most cases).
Why is the delegator not cut out of the contract like in assignments?
To protect the receiver to ensure they can still collect from either party.
Most contractual duties can be delegated, except when performance by delegatee will
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vary materially from that expected by the obligee.
Example where contractual duties cannot be assigned because the performance varies materially
Getting brain surgery from a med student vs a 30 year surgeon.
Rights are assigned; duties are delegated; but an ______________ or ____________ is BOTH an
assignment and a delegation.
"Assignment of all rights" or an "assignment of the contract"
Assignment of All Rights
The effect is to end all of the assignor's rights under the contract, but assignor is still liable if assignee
doesn't perform all the assignor's duties. Assignment and delegation!
Third Party Beneficiary
a 3rd party whom the contracting parties intend the contract to directly benefit can enforce the
contract against the party whose performance will benefit the 3rd party.
- because they arre intended to benefit, they have the right to enforce the contract.
Ex of 3rd Party beneficiary
Nino pays Professor Liedtka for a Pen, and instructs her to give the pen to Charlie for his birthday. If
Professor Liedtka doesn't deliver the pen, Nino can sue but so can Charlie.
Only ______________ have a right to enforce the contract.
intended beneficiaries
Incidental beneficiaries
,cannot enforce a contract, even if they obtain some unintentional benefit from it. *must be named
specifically as beneficiary in contract such as "class of 2026 from VSB"
Case Problem: Rich Uncle Mike decides to give Alex a new car. Mike contracts with Jack's Auto to
buy a car for $10,000 to be delivered to Alex in December. Mike pays, tells Alex about the car, then
goes on a cruise. Jack's never delivers the car. Can Alex sue Jack's?
Yes, he can sue Jack's. He cannot sue Mike.
Performance and Discharge
Ending Contracts
A party fulfills (discharges) is duties by
performing as required by the contract.
Conditions to performance and discharge:
performance is required if condition is triggered; otherwise, duty to perform is discharged.
Condition Precendent
must be fulfilled before a party can be required to perform.
Example of Condition Precendent
Contract will be binding only if my attorney approves it.
My mortgage has to be approved by the bank before I can purchase the home.
*If attorney doesn't approve the contract, it was never formed and we are not obligated to perform.
Condition Subsequent
after a party has begun to perform, a condition that must be met before the party must continue.
Example of Condition Subsequent
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I had to pass the bar exam after being hired by my law firm. If I did not pass, I would have only had
one more chance before the condition was not met and firm could let me go.
Performance
usually the duty to perform under a contract is absolute
Complete performance
when a party performs exactly as agreed. --> if i promise a new blue pen, I can't give them a used red
pen.
A party has _______ performance when he/she is ready willing and able to perform as promised =
_________________
tendered; discharged of duty
Example of tendered performance
She tried to give the pen to Charlie and he doesn't accept, he cannot then sue her for breach of not
"fully performing" because she was ready, willing, and able to perform.
Substantial Performance
a party in good faith substantially performs the terms of the contract so that the other party got the
"important and essential benefits of the contract". Failure to perform results in a minor (nonmaterial)
breach.
Ex of Substantial performance
, If HGTV promises a pool table but you are over budget so they give you everything but the pool table
it is fine substantial performance. If the breach is the basement is 10 feet smaller than discussed and
you can't fit a couch, they did not substantially perform.
If the breach is minor, the non-breaching party can seek damages, but is
not excused from performing himself (SP)
Case Problem: Kent hired J&Y to build his house. Contract stated they must use Reading pipe. J&Y
couldn't find Reading pipe so they used a comparable brand. Kent refused to pay for the house. Does
Kent have to perform as promised?
Yes. J&Y substantially performed. If the pipes were faulty and leaked then he would not have to
perform.
Material breach
a substantial failure to perform as promised; the other party did not get the consideration he
bargained for.
The non-breaching party is _________ from performing and can sue for damages caused by the
material breach.
excused
Ex: Man cave big enough for putting green, now it doesn't fit, you are excused from paying
(performing) due to material breach.
Anticipatory repudiation
is the refusal of one party to perform before performance is required
The non-breaching party can treat the repudiation
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immediately as a material breach and is excused from performing.
Discharge by law
where the law automatically discharges the parties
Impossibility
when it is objectively impossible for anyone to perform as required (not just impossible for the
obligor), duty to perform is discharged.
---> when a change in the law makes performing illegal for example.
Commercial Impracticability (UCC)/Frustration of Purpose (CL)
a party might be excused if performance gets extremely difficult or expensive due to unforeseeable
reasons.
*this is for ending a contract, different consequence than modifying a contract.
Jimenez, a famous singer, contracts to perform in your nightclub. He dies prior to performance.
Impossible - discharge
Raglione contracts to sell your her land. Just before title is to be transferred she dies. Does
Raglione's Estate have to complete the land transfer?
No discharge - estate can perform
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