Download intended beneficiary k

PAROL EVIDENCE RULE
• ONE CAN NOT VARY OR ALTER THE TERMS OF
A WRITTEN K
WITH EVIDENCE OF TERMS AGREED TO BEFORE OR
CONTEMPORANEOUSLY WITH THE WRITING
Exceptions (to P.E. Rule)
•
•
•
•
•
•
Lack of consent (fraud, duress, undue influence, mistake)
Ambiguous K
Incomplete (can fill in gaps, but cant change or contradict terms)
Subsequent oral K’s (but courts are suspicious)
Admissions
Orally agreed on conditions (if existence of entire K depends on condition,
but cant alter the terms of the K)
To determine if parol evidence allowed, ask:
• Is it an integrated
K?
(a complete and final agreement)
• If integrated, no parol evidence (unless one of the
exceptions applies)
IF a K is only partially integrated
(then it isn’t done yet) and parol evidence may be
allowed to show additional, consistent terms to
supplement
(but not to contradict)
REMEMBER!
Parol evidence can NEVER be used to
contradict the terms of the K
Third Party Beneficiary K’s
When the performance is intended to
benefit someone other than the person
who made the K
Third Party Beneficiary Contracts
Types:
• Donee Beneficiary
• Creditor Beneficiary
• Incidental beneficiary
INTENTIONAL BENEFICIARIES
ARE DONEE AND CREDITOR
BENEFICIARIES
THEY CAN ENFORCE THE CONTRACT
INTENDED BENEFICIARY K
3rd party beneficiary can sue the PROMISOR for
enforcement
BUT NOT
the PROMISEE
Who is the PRMISOR in a 3rd party beneficiary K?
• The party that made the promise that benefits
the 3rd party
Example
Life Insurance Co makes K w/ Grandpa for life insurance and Fred
is the beneficiary
__________________________________
Life Ins. Co= promisor
Fred= 3rd party benefic.
Grandpa= promisee
 Fred can sue Life ins co to enforce K but not Grandpa
DONEE BENEFICIARY
• Primary purpose of contracting was to make a
gift of performance to the beneficiary
DONEE BENEFICIARY
CAN ENFORCE THE
CONTRACT AGAINST THE
ORIGINAL PROMISOR
BUT NOT THE PROMISEE
Donee Beneficiary (Examples)
• PURCHASE OF HOUSE BY PARENT FOR CHILD; ROOF
FALLS IN.
• MAN BUYS ENGAGEMENT RING FOR FIANCEE AND IT
TURNS OUT THAT THE STONE IS GREEN GLASS NOT
EMERALD
• Life Insurance contracts (designated beneficiary is a donee
beneficiary)
Creditor Beneficiary
If performance will satisfy a legal duty that owed a
third party (can be any legal duty; not just payment
of $)
INCIDENTAL BENEFICIARIES
CAN NOT ENFORCE THE
CONTRACT
Incidental Beneficiary
K is not intended to benefit
--------------------Has NO RIGHTS under the K
(is NOT an intended beneficiary)
Examples Incidental beneficiary
• Someone next door makes a K to have their ugly house painted
• Business in strip center makes contract with guy to dress up like gorilla
and stand on corner to bring traffic to center
A contract consists of rights and duties
A transfer of rights is called an assignment
A transfer of duties is called a delegation
Material Breach
If performance is not at least substantial
(failure to perform)
When material breach
• The other party no longer has to perform
• And can sue for breach of K
Anticipatory breach
Also called anticipatory repudiation
Occurs before a contract has been fully performed
------------------------------------------If other party indicates intent not to perform other party can
treat the K as breached (and sue)
EXCUSES FOR NONPERFORMANCE
• Prevention (other side prevents)
• Impossibility
a. death or illness
b. intervening illegality
c. destruction of the subject matter
Remedies for breach
Damages (remedies at law)
OR
Equitable remedy
Damages
• Compensatory (actual)
• Consequential (special circumstances; flow from
the consequences of the breach)
• Nominal (when technical breach but no actual
loss)
NO PUNATIVE DAMAGES
Are allowed for breach of
contract
Liquidated Damages
Provide in advance that a specific sum recovered
if breach
When liquidated. Damages are in the K, it is the
exclusive remedy (cant get more)
Duty to Mitigate
Parties injured by a breach of contract have a duty to
minimize damages
(Cant recover for injuries that could have been
avoided)
EXAMPLE
Rosco alleging wrongful termination from employer. Rosco can’t just sit
around for 4 years waiting for case to go to trial. Has to MITIGATE his
damages by looking for other work.
Equitable Remedies
• Specific performance (if unique subject matter) … I.e.
real estate K’s
• Rescission—undo K and and return parties to status quo
THE END
NOTE:
The Bill of Rights will be the bonus questions on the final . . .