Part 3- Contracts, Chapter 17: Rights of Third Parties, Doc 1

Summary and Analysis: Peterson v. Evening News and Key Contract Law Concepts Case Overview: Peterson was under a three-year employment contract with Post-Network as a newscaster, with additional options for extension. When Post-Network sold its operation, including Peterson’s contract, to Evening News, Peterson continued working but later resigned to join a competitor. Evening News sued Peterson for breach of contract. Key Questions: 1. Can a third party enforce a contract? o Yes, a third party (like Evening News) can enforce a contract if the contract rights were validly assigned to them. In this case, Evening News, as the assignee, may assert Post-Network's contractual rights if the assignment was valid. 2. Was the assignment of Peterson’s contract valid? o Assignment of Employment Contracts: Employment contracts that involve personal services, skill, or trust are generally not assignable without the employee’s consent because they are considered personal. As a newscaster, Peterson’s role likely required specific personal skills and a degree of trust that may make the assignment questionable. Courts have ruled that when contracts involve personal service, they may require consent from the individual before assignment. o The validity of the assignment may depend on whether Peterson's role is seen as a personal one, making the assignment to Evening News potentially invalid without his consent. 3. Can Peterson enforce any terms of the sale contract between PostNetwork and Evening News? o Peterson could potentially enforce terms of the sale contract if he is considered a third-party beneficiary with specific rights. However, unless the contract explicitly provides rights to Peterson, he may have limited ability to enforce provisions of the Post-Network sale agreement with Evening News. 4. Is it ethical for Evening News to prevent Peterson from changing jobs? o Ethically, it may be viewed as unreasonable to prevent Peterson from pursuing career opportunities, especially given that he did not initially agree to work for Evening News. Furthermore, enforcing a noncompete or blocking Peterson’s career mobility could be perceived as limiting his professional autonomy without prior agreement. Key Legal Concepts: 1. Assignment and Delegation:   Assignment: The transfer of rights from one party (assignor) to another (assignee). Assignments are typically permissible unless they materially alter the obligations of the other party or involve personal services. Delegation: The transfer of duties to another party. In employment or personal service contracts, delegation without consent is often restricted. 2. Third-Party Beneficiaries:   Intended Beneficiaries: If a third party is intended to benefit from a contract (e.g., if Peterson were explicitly named), they can enforce contract terms. Incidental Beneficiaries: Parties who benefit from a contract but are not specifically intended to have enforceable rights cannot assert claims. 3. Ethical Considerations in Employment Assignments:  Ethically, employees should ideally have a choice regarding a new employer, especially if a sale or transfer alters their professional environment or impacts career prospects. Blocking an employee from career opportunities, especially when they did not agree to work for the new employer, may be considered unethical unless expressly agreed upon. Learning Objectives Recap:   Assignment and Delegation: Understand that assignments transfer contract rights, while delegations transfer duties. Both may have limitations based on the nature of the service or duties. Third-Party Beneficiaries: Differentiate between intended and incidental beneficiaries and recognize their respective enforcement rights.