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Transfer of Contractual Obligations

Transfer of Contractual Obligations . Chris Vetter. Do Now.

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Transfer of Contractual Obligations

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  1. Transfer of Contractual Obligations Chris Vetter

  2. Do Now • Jim bought a car from Oriental Motors for $32,000. After a $2000 down payment, the balance, plus a finance charge were to be paid in installments over the next 48 months. Oriental Motors needed money to restore their stock and sold Jim’s contract to a finance company and told Jim to make all installment payments to the finance company. Is this contract legal?

  3. Answer • It is legal and when Jim was informed about the sale of his contract, he became obligated to make payments to the finance company.

  4. Vocab • Contractual Rights-something they will receive under a contract • Assignor-the party who transfers the contractual right to another • Assignee-the party who receives the contractual right • Performance-the fulfillment of contractual promises as agreed • Contractual Duties-legal obligations created by a contract • Delegation of Duties-routine duties being transferred to another party • Obligator-the one who owes a duty under a contract

  5. Non Assignable Rights • A right created under contact that prohibits the transfer of contractual rights • Claims for damages for personal injuries • Claims against the United States • Rights to personal services, especially those of a skilled nature, or when personal trust and confidence are involved • Assignments of future wages, as limited by state statutes

  6. Obligations • If a contractual right is transferred, it doesn’t change the legal rights of the other party to the contract. If you are supposed to pay a finance company, and don’t receive your contractual rights, you aren’t obligated to pay the finance company. • If the obligator breaches, the assignee must sue for the breach, not the assignor

  7. Closing Question • John hired Ron to come to his home and take care of his children while he was at work. Can Ron legally delegate the child care duties to a well qualified third party?

  8. Answer • Ron cannot delegate this duty because it involves special qualifications of trust and skill

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