In a contract, what is true about a third party?

In a contract, what is true about a third party?

• A. Rights may be assigned to them, but duties under a contract cannot be transferred.
• B. Third parties can take on duties but not rights.
• C. A third party can both gain rights and assume duties freely.
• D. There are no third party rights or duties.

Answer: (A)

The concept tested is how third parties interact with contracts through assignment of rights and delegation of duties. In ordinary contract law, a third party can obtain enforceable rights by having those rights assigned to them; the promisee or grantor can transfer their rights under the contract to the third party. However, duties to perform under the contract aren’t transferred to a third party by default. The original party usually remains responsible for fulfilling the obligations unless the other party agrees to a novation (replacing one party with another) or the contract allows delegation with the other party’s consent. So, a third party can end up with rights, but not automatically with duties. This aligns with the correct statement: rights may be assigned to a third party, but duties under a contract cannot be transferred unilaterally. The other options don’t fit because they either deny the possibility of third-party rights (ignoring assignments or beneficiaries) or allow third-party duties to be assumed freely (which requires consent or novation).

The concept tested is how third parties interact with contracts through assignment of rights and delegation of duties. In ordinary contract law, a third party can obtain enforceable rights by having those rights assigned to them; the promisee or grantor can transfer their rights under the contract to the third party. However, duties to perform under the contract aren’t transferred to a third party by default. The original party usually remains responsible for fulfilling the obligations unless the other party agrees to a novation (replacing one party with another) or the contract allows delegation with the other party’s consent. So, a third party can end up with rights, but not automatically with duties.

This aligns with the correct statement: rights may be assigned to a third party, but duties under a contract cannot be transferred unilaterally. The other options don’t fit because they either deny the possibility of third-party rights (ignoring assignments or beneficiaries) or allow third-party duties to be assumed freely (which requires consent or novation).