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Contract Law: Gift Giving

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If a person promises to give you a gift, there is usually no consideration. The person can change his mind and decide not to give you the present, and there is nothing you can do about it.But if a person makes a contract with someone else and intends that you will receive a gift under the agreement, you are a donee beneficiary and you do have rights to enforce the deal. Are these rules unacceptably inconsistent? If so, which rule should change?

In your response, focus on:
- Third Party Beneficiary
- Incidental Beneficiaries
- Assignment and Delegation.

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Solution Preview

- Third Party Beneficiary

A donee beneficiary is third party that benefits from donation or a gift. It is person who is considered to be a non-party in a contract but still receives a benefit from the completion of the contract. For example, if a donor promises to donate a Ford truck to a charity. The agreement is between the donor and the charity, but since there is only one local retailer of Ford Company, the retailer stands to gain from the transaction. Now if the contact is in private and the retailer does not know about it the donee beneficiary is not affected and so he cannot sue. However, if the retailer comes to know of the promise and he arranges for bringing the truck from the distributor to his premises, he can sue the purchaser if they cancelled the contract.

The rule that is inconsistent is that even though the two parties to the contract have not asked the third party, in this case the retailer to make the purchase, he can still file for damages. The rule that should be changed is that only if the purchaser has promised the third party that he will buy the truck from him should the retailer be ...

Solution Summary

Gift Giving contract law is discussed step-by-step in this solution. The response also has the sources used.