Contract Third Parties: Beneficiaries, Assignment, and Novation

Privity of Contract and Its ExceptionsI. Privity of Contract: The FoundationContracts generally confer rights and impose duties only on the parties involved.Third parties typically cannot enforce contractual provisions."Privity of contract" refers to this exclusive contractual relationship.II. Exceptions to Privity: Third-Party Beneficiary ContractsContracts can be designed to benefit a third party.Courts assess the intent of the contracting parties to determine if a third party has enforceable rights.Key factors:III. Transfer of Contractual Rights and DutiesAssignment (Transfer of Rights):Delegation (Transfer of Duties):Assignment of Contract:IV. Novation: Complete SubstitutionNovation replaces one party entirely, transferring both rights and obligations.Requires agreement from all involved parties.Key distinctions from assignment:V. Common Contractual Collocations:Confer rights: Grant legal entitlements.Impose duties: Assign obligations.Enforce contractual provisions: Ensure compliance with terms.Render performance: Fulfill contractual duties.Delegated duties: Tasks assigned to another party