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b

OR the gvt agency is subject to such liability and a direct action against the contractor is consistent w/ the terms of the K and the terms of the law authorizing the K (in other words, citizen could sue gvt agency directly)

IV

Defenses

A

Defenses promisor could have asserted against promisee

1

Promisor can use any def against bene that he could have used against promisee.  (Rouse heater case — fraud C/A)

B

Defenses promisee could have asserted against bene

1

Gen’y, promisor can’t assert against bene defs promisee could have asserted against bene

a

Ex: Rouse’s promise to pay bene money in Rouse heater case

b

EXCEPTION: where promisor has promised to pay whatever promisee’s liability was.  For example, had promisor in Rouse heater case agreed to “assume promisee’s liability to bene,” rather than simply agreeing to “pay bene money”

V

What can benes seek?

A

Donee bene CAN’T sue promisor for dams, b/c promisee didn’t owe donee bene a duty (by definition).  But donee bene can seek spec perf of promisor’s promise to promisee

B

Creditor bene can sue promisor or promisee (on orig obligation)

VI

Termination / modification of bene’s rights

A

3d-party bene’s righs can be modified or terminated until they vest

B

When do 3d-party bene’s right vest?  ELTS:  (Rest § 311)

1

Bene manifests assent to the promise on invitation of parties

2

OR bene brings suit to enforce the promise

3

OR bene materially changes position in reliance

33

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