privity of contract
the state of two specified parties being in a contract
assignment
the transfer of contractual rights by an obligee to another party
assignor
an obligee who transfers a right
assignee
a party to whom a right has been transferred
anti-assignment clause
a clause that prohibits the assignment of rights under the contract
delegation of duties
a transfer of contractual duties by an obligor to another party for performance
delegator
an obligor who has transferred his or her duty
delegatee
a party to whom a duty has been transferred
assumption of duties
a situation in which a delegation of duties contains the terms assumption , i assume the duties or other similar language. In such a case, the delegatee is legally liable to the obligeee for nonperformance
anti-delegation clause
a clause that prohibits the delegation of duties under the contract
donee beneficiary contract
a contract entered into with the intent to confer a benefit or gift on an intended third party
donee beneficiary
a third party on whom a benefit is to be conferred
creditor beneficiary contract
a contract that arises in the following situation: (1) a debtor borrows money, (2) the debtor signs an agreement to pay back the money plus interest, (3) the debtor sells the item to a third party before the loan is paid off, and (4) the third party promises the debtor that he or she will pay the remainder of the loan to the creditor
creditor beneficiary
an original creditor who becomes a beneficiary under the debtor's new contract with another party.
incidental beneficiary
a party who is unintentionally benefited by other people's contracts
covenant
an unconditional promise to perform
condition
a qualification of a promise that becomes a covenant if it is met. There are three types of conditions; conditions precedent, conditions subsequent, and concurrent conditions
condition precedent
a condition that requires the occurrence of an event before a party is obligated to perform a duty under a contract
personal satisfaction test
a subjective test that applies to contracts involving personal taste and comfort
reasonable person test
an objective test that applies to commercial contracts and contracts involving mechanical fitness.
condition subsequent
a condition whose occurrence or nonoccurrence of a specific event automatically excuses the performance of an existing contractual duty to perform.
concurrent condition
a condition that exists when the parties to a contract must render performance simultaneously; each party's absolute duty to perform is conditioned on the other party's absolute duty to perform
implied-in-fact condition
a condition that an be implied from the circumstances surrounding a contract and the parties' conduct
novation agreement
an agreement that substitutes a new party for one of the original contracting parties and relieves the exiting party of liability on the contract.
accord and satisfaction
the settlement of a contract dispute
impossibility of performance
nonperforne that is excused if a contract becomes impossible to perform. It must be objective, impossibility, not subjective
commercial impracticability
nonperformance that is excused if an extreme or unexpected development or expense makes it impractical for the promisor to perform
statute of limitations
a statues that established the time period during which a lawsuit must be brought; if the lawsuit is not brought within this period, the injured party loses the right to sue.
