Sometimes a person who entered into a contract must transfer the contract rights or duties to anothe - PowerPoint PPT Presentation

Loading...

PPT – Sometimes a person who entered into a contract must transfer the contract rights or duties to anothe PowerPoint presentation | free to download - id: 3f9c1-YzI0M



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Sometimes a person who entered into a contract must transfer the contract rights or duties to anothe

Description:

Sometimes a person who entered into a contract must transfer the contract rights ... Choice because MedEcon employed him and placed him in charge of the First Choice ... – PowerPoint PPT presentation

Number of Views:49
Avg rating:3.0/5.0
Slides: 22
Provided by: everett9
Learn more at: http://www.odu.edu
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Sometimes a person who entered into a contract must transfer the contract rights or duties to anothe


1
Overview
  • Sometimes a person who entered into a contract
    must transfer the contract rights or duties to
    another person (third party)
  • Examples sublease of your apartment, asking
    another person take over work you agreed to do,
    or doing something to benefit a third person
  • Key to successful transfer understand the third
    partys abilities, limitations, and needs

17 - 1
2
Overview
  • A person who owes a duty to perform under a
    contract is called an obligor
  • The person to whom the duty is owed is called the
    obligee

17 - 2
3
Assignment of Contracts
  • Transfer of a right under a contract is called an
    assignment
  • Example Jane arranges for her employer to
    transfer her next paycheck to her parents bank
    account
  • Employer is the obligor (owes Jane money)
  • Jane is the obligee and assignor
  • Janes parents are the assignees

17 - 3
4
Assignment Process
17 - 4
5
Details of Assignment
  • Assignments may be made in any way sufficient to
    show assignors intent to assign
  • A writing is not necessary
  • Unless statute of frauds applies
  • Assignee does not need to give consideration to
    assignor in exchange for the assignment

17 - 5
6
Limitations on Assignment
  • Assignment will not be effective if it
  • Is contrary to public policy
  • Violates a non-assignment clause in a contract
  • Adversely affects obligor in some significant way
  • Assignment may be ineffective if the contract
    right involved a personal relationship or element
    of personal skill or character
  • But see Managed Health Care Associates v. Kethan

17 - 6
7
Managed Health Care Associates v. Kethan
  • Facts Procedural History
  • Kethan signed an employment agreement with
    MedEcon that contained a non-compete clause and
    requirement that modifications be in writing
  • MHA purchased MedEcon and Kethan left to join
    First Choice, a customer with whom Kethan had
    developed a sales relationship
  • MHA sought an injunction to prohibit Kethan from
    working for First Choice, but the district court
    denied the suit and MHA appealed

17 - 7
8
Managed Health Care Associates v. Kethan
  • Issue and Legal Reasoning
  • First issue is whether MedEcons assignment of
    Kethans employment agreement modified the terms
    of his contract
  • An assignment does not modify the terms of the
    underlying contract, thus did not modify Kethans
    employment agreement
  • Second issue is whether a non-competition clause
    is assignable under Kentucky law
  • Yes

17 - 8
9
Managed Health Care Associates v. Kethan
  • Holding
  • Kethan was able to develop his business
    relationship with First Choice because MedEcon
    employed him and placed him in charge of the
    First Choice account
  • Kethan is precisely the type of employee for whom
    noncompetition clauses were designed
  • Reversed and remanded in favor of MHA

17 - 9
10
Delegation of Duties
  • Appointment of another person to perform a duty
    under a contract is called a delegation
  • Example Mike mows Janets lawn weekly. Mike
    becomes ill and arranges for Sonny to mow Janets
    lawn.
  • Janet is the obligee
  • Mike is the obligor and delegator
  • Sonny is the delegatee

17 - 10
11
Delegation of Duties
  • Caution an assignment extinguishes the
    assignors right and transfers it to the
    assignee, but the delegation of a duty does not
    extinguish the duty owed by delegator
  • Delegator remains liable to the obligee unless
    the obligee agrees to make a new contract
    substituting the delegatees for the delegator

17 - 11
12
Delegation Process
17 - 12
13
Effective Delegation
  • In an effective delegation, performance by the
    delegatee will discharge the delegator
  • The reason why you should understand the
    delegatees abilities and limitations

17 - 13
14
Non-delegable Duties
  • Duties are not delegable if the delegation
  • Is contrary to public policy
  • Is prohibited by a contract clause
  • Also, duties that are dependent on the individual
    traits, skill, or judgment of the person who owes
    the duty to perform may not be delegable
  • Example a hip hop artist probably could not
    delegate concert obligation to an opera star

17 - 14
15
Details of Delegation
  • Delegation may be made in any way that shows the
    delegators intent to delegate
  • Delegator may be discharged from contract
    performance by a substituted contract (novation)
    in which obligee agrees to discharge original
    obligor and substitute a new obligor
  • Effect original obligor has no further
    obligation and obligee looks to the new obligor
    for performance

17 - 15
16
Third-Party Beneficiaries
  • If parties to a contract intended to benefit a
    third party, courts give effect to their intent
    permitting third party to enforce the contract
  • Referred to as third-party beneficiary
  • Example Father contracts and pays for Homes,
    Inc. to build house as gift for Son
  • Son (third-party beneficiary) may sue Homes, Inc.
    if the company breaches the contract
  • Father may also sue Homes, Inc.

17 - 16
17
Third-Party Beneficiary Diagram
17 - 17
18
Incidental Beneficiaries
  • Incidental beneficiary is one obtaining a benefit
    as unintended by-product of a contract
  • No rights under contract
  • In foregoing example, Sons Wife would be an
    incidental beneficiary

17 - 18
19
Locke v. Ozark City Board of Ed.
  • Facts Procedural History
  • Locke, a high school teacher and umpire at high
    school games, was severely injured by a parent of
    a high school athlete after a game
  • Locke sued the Board because (a) it failed to
    provide adequate police protection as required
    by the Alabama High School Athletic Assoc., (b)
    such failure was a breach of contract between
    Board and AHSAA, and (c) Locke was an intended
    third-party beneficiary of the contract
  • Trial court entered summary judgment for Board
    and Locke appealed

17 - 19
20
Locke v. Ozark City Board of Ed.
  • Issue
  • Was Locke a third-party beneficiary?
  • Law Applied to Facts
  • Locke must show 1) contracting parties intended
    direct benefit upon a third party 2) Locke was
    an intended beneficiary of the contract 3)
    contract was breached, and 4) contract was
    intended for his direct, as opposed to
    incidental, benefit
  • Contract states that the purpose of adequate
    police protection is to provide good game
    administration and supervision.

17 - 20
21
Locke v. Ozark City Board of Ed.
  • Holding
  • Based on the plain language of the contract and
    the surrounding circumstances, the contract
    anticipates third-party umpires, the contract was
    intended to directly benefit umpires like Locke
  • Reversed and remanded in favor of Locke

17 - 21
About PowerShow.com