U.S. Business Law 3

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  • Created by: Andre
  • Created on: 09-11-11 22:32

If the performance is not completely finished do not pay the person the full amount agreed for that % of the work as it may cost more to complete the rest of the work. Example, to complete a building company agrees $500,000, company completes 60% - do not pay 60% as the market price to complete the remaining 40% may be higher than what would be left from the money allocated for the building.

Commercial Impracticability (pg. 327) – must be objective, not that you can’t do it – must be that no one can do it.

ASSIGNMENTS

Is where a finance rights is assigned to someone else for financial compensation. E.g. A loan from a bank may be assigned to a 3rd party and the bank will receive money from the 3rd for assigning them the loan. The 3rd party will then get payment from the loanee.

ASSIGNOR is the one assigning the rights to the 3rd party.

ASSIGNEE is the one receiving the rights.

OBLIGOR is the one who is obligated to perform the duties.

OBLIGEE the one who is owed the duty of obligation.

The effect of an assignment is that when the rights under a contract are assigned unconditionally to a 3rd party the rights of the assignor are extinguished. The assignee takes only the rights that the assignor originally had.

Rights Assigned Are Subject to the Same Defense

Assignments can be in either oral or written form.

Exception anything covering the statute of frauds must be in writing.

Rights that cannot be assigned:

WHEN A STATUTE PROHIBITS ASSIGNMENT

These may be assigning future benefits which state statute may prohibit.

WHEN A CONTRACT IS PERSONAL IN NATURE

Such services as tutoring which is personal in nature cannot be assigned elsewhere.

WHEN AN ASSIGNMENT WILL SIGNIFICANTLY CHANGE THE RISK OR DUTIES OF THE OBLIGATOR

A right cannot be assigned to another party if it has the potential of significantly increasing the risks or duties imposed on the obligator.

WHEN THE CONTRACT PROHIBITS ASSIGNMENT

When a contract specifically states that it cannot be assigned to a third party. An ANTIASSIGNMENT clause is effective dependent in parts on how it is phrased. This prohibition is not restrictive on operation of law pursuant to bankruptcy or death.

A contract cannot prevent an assignment of the rights to receive funds.

The assignment of rights in real estate cannot be prohibited. Prohibitions of these kinds are referred to as restraints against alienation.

The assignment of negotiable instruments cannot be prohibited (is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time).

A contract for the sale of goods, allows assignment of the rights to receive damages for breach of contract or payment even if prohibited in the assignment.

Notice of Assignment – once a valid assignment of rights has been made the assignee should notify the obligor of the assignment. Although not legally necessary.

If the…

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