Английский язык для юристов. Предпринимательское право

Unit 9 Third Parties in Contract Law Третьи лица в договорном праве

Договором в пользу третьего лица признается договор, в котором стороны установили, что должник обязан произвести исполнение не кредитору, а указанному или не указанному в договоре третьему лицу, имеющему право требовать от должника исполнения обязательства в свою пользу (статья 430 ГК РФ).

List of key terms and word combinations:

– assignee – правопреемник; цессионарий, уполномоченный; агент; назначенное лицо

– assignment – передача права; уступка требования; цессия; перевод долга; отчуждение, ассигнование; предназначение, назначение

– assignor – лицо, совершающее передачу (вещи, права); цедент

– beneficiary – лицо, в интересах которого осуществляется доверительная собственность; бенефициарий; выгодоприобретатель

– creditor beneficiary – бенефициар-кредитор

– delegation – передача, делегирование (полномочий), перевод долга

– donee beneficiary – дарополучатель, лицо, распределяющее наследственное имущество по доверенности

– incidental beneficiary – случайный бенефициар

– intended beneficiary – намеренный; умышленный бенефициар

– novation – новация; перевод долга; цессия прав по обязательству

– obligor – лицо, принявшее на себя обязательство; должник по обязательству, дебитор

– warranty – гарантия, ручательство

A third party is a person who may, in some way, be affected by a contract but who is not one of the contracting parties. A third party, also known as an outside party, is at times given benefits from a contract made between two other parties. A third party receiving benefits from a contract made by others is known as a beneficiary. Although not obligated by the agreement made between those in privity, third parties may have the legal right to enforce the benefits given them by such agreements.

A beneficiary in whose favor a contract is made is an intended beneficiary. With exceptions in some jurisdictions, an intended beneficiary can enforce the contract made by those in privity of contract. Those who are most frequently recognized to be intended beneficiaries and who have the right to demand and enforce the benefits promised are creditor beneficiaries, donee beneficiaries, and insurance beneficiaries.

A creditor beneficiary is an outside third party to whom one or both contracting parties owe a continuing debt of obligation arising from a contract. Frequently, the obligation results from the failure of the contracting party or parties to pay for goods delivered or services rendered by the third party at some time in the past.

A third party who provides no consideration for the benefits received and who owes the contracting parties no legal duty is known as a donee beneficiary. However, the contracting parties owe the donee beneficiary the act promised; if it is not forthcoming, the donee beneficiary may bring suit. The consideration that supports this type of agreement is the consideration exchanged by the parties in privity to the contract.

An individual named as the beneficiary of an insurance policy is usually considered a donee beneficiary. The beneficiary does not have to furnish the insured with consideration to enforce payment of the policy. In some cases, an insurance beneficiary may also be a creditor beneficiary. This situation occurs in consumer or mortgage loans when the creditor requires the debtor to furnish a life-term insurance policy naming the creditor as the beneficiary. The policy will pay the debt if the debtor dies before the loan has been repaid.

An incidental beneficiary is an outside party for whose benefit a contract was not made but who would substantially benefit if the agreement were performed according to its terms and conditions. An incidental beneficiary, in contrast to an intended beneficiary, has no legal grounds for enforcing the contract made by those in privity of contract.

When people enter into contracts, they receive rights and they incur duties that may be transferred to others. An assignment is a transfer of a contract right. A delegation is a transfer of a contract duty.

Three parties are associated with any assignment. Two of the parties are the ones who entered the original agreement. The party who assigns rights or delegates duties is the assignor. The outside third party to whom the assignment is made is the assignee. The remaining party to the original agreement is the obligor.

Consideration is not required in the creation of an assignment. When there is no supporting consideration, however, the assignor may repudiate the assignment at any time prior to its execution.

To be valid, an assignment must follow certain accepted procedures designed to protect all of the parties. Form of assignment, notice of assignment, and the rights of parties in successive or subsequent assignments must conform to practices established by case law and statutes.

An assignment is valid at the time it is made. As a mean of protection against subsequent assignments, the assignee should give notice of assignment to the obligor. This is an obligation of the assignee, not the assignor. If notice is not given, it would be normal practice for the obligor to render performance to the other original contracting party, in this case, the assignor. If due notice has been given and the obligor makes payment to the assignor, the obligor is not excused from making payment to the assignee.

The rights and duties of the assignee are the same as those previously held by the assignor under the original contract. Claims the assignor may have had against the obligor now belong to the assignee. In addition, defenses the obligor may have had against the assignor's claims may now be used against the assignee.

The assignee's duty in an assignment is to give notice of the assignment to the obligor. The obligor is allowed a reasonable time to seek assurance that an assignment has been truly made. Making the assignment in writing reduces the possibility of one's fraudulent representation as an assignee.

The assignor is obligated to any express and implied warranties that serve to protect either the assignee or the obligor. A warranty is a promise, statement, or other representation that a thing has certain qualities.

The assignor is bound by an implied warranty that the obligor will respect the assignment and will make performance as required by the original agreement between the assignor and the obligor.

If the assignor delegates to an assignee duties owed the obligor, there is an implied warranty that the duties delegated will be carried out in a complete and satisfactory manner.

Parties to a contract may include a condition that will not allow its assignment.

If all three parties agree, however, the assignor can be released from liability at the time of the assignment, and privity of contract can exist between the assignee and the obligor. Such an arrangement is called a novation, which is a substitution, by mutual agreement, of a new party for one of the original parties to a contract.

Exercise 1. Comprehension questions:

1. Give definition of a third party and identify what rights it has.

2. What are the types of intended beneficiaries?

3. Explain who creditor beneficiaries are.

4. What do the contracting parties owe the donee beneficiary?

5. Why is consideration important in creation of an agreement?

6. What are the forms of assignment?

7. Which of the two assignees has a superior right and claim against the obligor?

8. Explain the term warranty.

Exercise 2. Find in the text English equivalents to the following:

Правопреемник; лицо, совершающее передачу (вещи, права); лицо, в интересах которого осуществляется доверительная собственность; перевод долга; дарополучатель; новация; цессия прав по обязательству; лицо, принявшее на себя обязательство; должник по обязательству, дебитор;