Third Party Beneficiary Rights

Summary

A third-party beneficiary is someone who benefits from a contract they are not a party to. In Texas, for a third-party beneficiarys rights to vest, they must manifest assent, materially change their position in reliance, or bring a lawsuit to enforce the contract. If these conditions are not met before a contract is rescinded, the beneficiarys rights may not be enforceable. Additionally, creditor beneficiaries can enforce contracts, while incidental beneficiaries cannot. Personal service contracts require consent for assignment, and delegators remain liable if delegatees fail to perform. The English rule prioritizes the first assignee to give notice.

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Someone who is not a party to a contract but receives benefits as a result of the contract is known as a(n): delegator. assignor. delegate. third-party beneficiary.
The correct term for someone who is not a party to a contract but receives benefits as a result of the contract is a "third-party beneficiary."
Do you have any specific legal concerns or need further assistance with a contract issue in Texas?
Ali and Lily negotiate a contract that specifically provides that Tomas will receive a $*-million benefit as a result of the agreement. But before they tell Tomas about the agreement, they change their minds and rescind the contract. Tomas finds out that they canceled his benefit and sues to enforce the contract. Will Tomas win? Yes, because Ali and Lily materially altered the terms of the contract without Tomas’s consent. No, because his rights have not vested. Yes, because he is an intended third-party beneficiary. No, because he is an incidental third-party beneficiary.
Based on the information provided, Tomas's ability to enforce the contract depends on whether his rights as a third-party beneficiary have vested. In Texas, the rights of an intended third-party beneficiary vest when:
- The third party manifests assent to the contract at the request of the promisor or promisee.
- The third party materially changes their position in justifiable reliance on the contract.
- The third party brings a lawsuit to enforce the contract.
Given that Tomas was not informed about the contract before it was rescinded and has not taken any action to manifest assent, change his position, or bring a lawsuit before the rescission, it is likely his rights have not vested. Therefore, the correct answer is:
No, because his rights have not vested.
If a contract between Good Sports and Balls Unlimited calls for Balls Unlimited to pay Big Bank money because Good Sports owes Big Bank for a previous loan, then Big Bank is a(n): debtor beneficiary. creditor beneficiary. donee beneficiary. incidental beneficiary.
In the scenario where Balls Unlimited is paying Big Bank money because Good Sports owes Big Bank for a previous loan, Big Bank is a:
- Creditor beneficiary.
If a contract between Good Sports and Balls Unlimited calls for Balls Unlimited to pay Big Bank money because Good Sports owes Big Bank for a previous loan, then Big Bank is a(n): debtor beneficiary. creditor beneficiary. donee beneficiary. incidental beneficiary.
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Big Bank is a creditor beneficiary because they are receiving the payment as satisfaction for a pre-existing debt owed by Good Sports.
Do you have any additional questions or need further clarification on any other legal matters in Texas?
The Central City government agrees to give Sunny Solar a large tax break if it agrees not to move *,* jobs to a different city. The language in the contract reads as follows: “Central City intends for this agreement to benefit all Central City residents.” Sunny Solar reverses course and moves the *,* jobs to Star City and fires the Central City workers. Those workers sue Sunny Solar to enforce the contract it signed with Central City. Who wins? Sunny Solar wins because the workers were not residents of Central City and therefore were only incidental beneficiaries of the contract. The workers win because Sunny Solar breached its contract. The workers win because they were intended beneficiaries of the contract. Sunny Solar wins because the workers were not intended beneficiaries of the contract.
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In this scenario, the likely answer is:
- Sunny Solar wins because the workers were not intended beneficiaries of the contract.
The workers are considered incidental beneficiaries and do not have the standing to enforce the contract between Sunny Solar and Central City.
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What is the difference between a right and a duty? Rights are things you receive, and duties are things you must do. Rights are freely transferrable to third parties, but duties are not. Duties are freely transferrable to third parties, but rights are not. Duties are things you receive, and rights are things you must do.
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A right is generally something you are entitled to receive or do, while a duty is something you are obligated to perform. Specifically:
- Rights are things you receive.
- Duties are things you must do.
Do you have any specific legal concerns or need further assistance with another legal issue in Texas?
Good Sports owes Big Bank $* million. If Good Sports delegates its duty to pay to Balls Unlimited and Balls Unlimited pays Big Bank without giving Big Bank notice of the delegation, is the delegation valid? Yes, notice is not required in this situation. No, the delegation is not valid without giving Big Bank notice. No, delegation requires the consent of the other party to the contract. Yes, notice is never required for assignments or delegations.
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In Texas, delegation of duties is generally valid without notice to the obligee unless the contract specifically requires notice or consent. Here's some relevant information:
- Delegation of duties does not usually require notice to the creditor.
- Consent from the other party is typically not needed unless the duty involves personal performance or the contract states otherwise.
Would you like more details on how delegation works in Texas?
Good Sports owes Big Bank $* million. If Good Sports delegates its duty to pay to Balls Unlimited and Balls Unlimited pays Big Bank without giving Big Bank notice of the delegation, is the delegation valid? Yes, notice is not required in this situation. No, the delegation is not valid without giving Big Bank notice. No, delegation requires the consent of the other party to the contract. Yes, notice is never required for assignments or delegations.
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In Texas, delegation of duties is generally valid without notice to the obligee unless the contract specifically requires notice or consent. Here are some points to clarify:
- Delegation of duties does not usually require notice to the creditor.
- Consent from the other party is typically not needed unless the duty involves personal performance or the contract states otherwise.
Would you like more details on how delegation works in Texas?
What’s the correct answer
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The correct answer is:
Yes, notice is not required in this situation.
In Texas, the delegation of duties is generally valid without notice to the obligee unless the contract specifically requires notice or consent.
Tri agrees to purchase a haircut from Lee, the world’s finest barber. Before the haircut occurs, Tri decides he wants to grow his hair longer, so he assigns the contract to Evan. When Evan shows up, Lee refuses to cut Evan’s hair, so Evan sues him for breaching the contract. Who wins? Lee wins because only Tri can enforce the contract. Lee wins because personal service contracts cannot be assigned without the consent of the other party. Evan wins because he paid for something he did not receive. Evan wins because an assignee acquires all the rights of the original contracting party, including the right to enforce the agreement.
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In this situation, Lee wins because personal service contracts, such as a haircut from a specific barber, cannot be assigned without the consent of the other party. Personal service contracts typically involve a specific skill or trust in the person performing the service, and therefore, the consent of the service provider (Lee) is required before the contract can be assigned to another person (Evan).
Would you like to know more about personal service contracts or have any other legal questions specific to Texas?
Mariel owes Ladonna $*,* under a contract between the two of them. Mariel refuses to pay, and they get into a fight. Mariel punches Ladonna in the mouth, causing $*,* in damages to her teeth. Ladonna doesn’t really want to sue her friend. Instead, she wants to assign Henry her legal rights under the contract as well as her right to collect the $*,* for her injuries. Which of the rights can she validly assign to him? The right to the $*,* for the injury Both the right to the $*,* under the contract and the right to the $*,* for the injury The right to the $*,* under the contract Neither
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Ladonna can validly assign her right to the $*,* under the contract to Henry. However, the right to collect the $*,* for her injuries is a personal right arising out of a tort, which typically cannot be assigned to another person.
Would you like to know more about assigning contract rights or have any other legal questions related to Texas?
So what’s the answer
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Based on the information you provided, the correct answer is:
- The right to the $*,* under the contract.
Ladonna can assign her contractual right to Henry, but the right to collect $*,* for her injuries is personal and typically cannot be assigned.
If you have any other legal questions or need further clarification, feel free to ask!
Hannah lives in a state where the English rule applies and assigns her rights to a contract to Nigel. She then assigns those same rights to Alastair, who immediately notifies the other party to the contract of the assignment. Who is the rightful owner of the rights? Alistair, because the English rule states that the first assignee to give notice wins. Nigel, because the English rule states that the first assignee to give notice wins. Nigel, because the English rule states that the first assignment in time wins. Alistair, because the English rule states that the first assignment in time wins.
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In a state where the English rule applies to assignments, the first assignee to give notice to the obligor typically has priority. Therefore, the correct answer is:
- Alastair, because the English rule states that the first assignee to give notice wins.
Would you like any more details on this topic or have another legal question specific to Texas?
If a delegatee fails to perform a contract and the other party sues the delegator, who wins? The delegator wins because the delegatee is the proper party to sue. The other party wins because the delegation was invalid. The other party wins because the delegator remains liable for the contractual duties that have been delegated to it. The delegator wins because delegators are relieved from liability for their delegated duties.
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The correct answer is:
- The other party wins because the delegator remains liable for the contractual duties that have been delegated to it.
In Texas, when a contract duty is delegated, the delegator is still liable if the delegatee fails to perform. Do you have any other questions or need more details on this topic?