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BU231 Lecture Notes - Life Insurance

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Shelley Mc Gill

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Who can I sue- Privity
Who should you sue when a promise that was made to you is not fulfilled
o Logical answer is the guy who made the promise
o Party to the contract- logically who we sue
o Only people in contract have obligation to fulfill it is called privity of contract
Different from tort
Exceptions to the privity rule
o Tort liability
Way around privity rule
Manufacturers liability- different than people in the contract
All of tort rule is exception to privity rule
o Insurance
Buy life insurance- contract with insurance company
Kids of person who dies sue insurance for not paying
Privity says kids cannot sue
Therefore exception
o Vicarious performance- someone else does it for you
What if someone wrongly performs for you
Restitution, undue enrichment
Equitable modification
o Novation- end the contract
Tool rather than an exemption around the privity rule
If bound by contract, someone can sue you
If sublet room, and they damage, landlord will sue you
Create obligation/right between landlord and tenant to be able to occupy that
If you don’t want the apartment back, you can novate the contract instead of
Kill original contract and replace contract with other person
Same terms and conditions
Another example is original contract is basement, want to move to second floor,
opening, novation is to destroy legal obligations of first contract and replace with
End chain of privity liability
Either major term or person in contract
o Exemption clauses
Even though we have a contract and you should be able to sue me, because I put
this term in, you can’t
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Thye are technically legal but can limit their range
Impossible to remove all liability- can’t destroy very nature of contracts
Require that they be brought to the attention of the other party
o Trusts
Often set up as a way of transferring wealth from generation to generation
Separate the asset from the legal owner before give to next owner
Creates entity that can manage the asset- middle man
Complicated scenario depending on which vehicle you use
Think of it as trust fund
Usually put trust in your will
In a document in contractual form
You have the money
Settle money on trustee (just technical owner)
Beneficiary of trust that will get the benefit
For example once die money help in trust in support and education of child
until youngest child reaches 25, or finishes undergraduate degree
Quite common in second marriages
Separate the asset from the revenue generated from the asset- benefit 2 different
Can the beneficiary who is not the trustee, have any contractual rights? Not party to
the contract
Beneficiary should have a say in lack of performance of the trustee
o Land
Lasts longer than you do, so the people involved with the land will eventually
disappear and just left with the land
Had to be writing (statute of frauds)
Registry system to record this writing
Always been government sanctioned database where determine who owns the land
Used not only for ownership, but also other interests in the land
When you want to buy- you know who and what interests in your land
Must get approval of new subdivision
For example, make high rise in rural
Attach conditions to agreement
Agreement between developer and municipality
Attaches more conditions from deed from developer to builder
All of this recorded on the title
Never party to agreement between developer and builder if you let’s say don’t pay
your dues or put satellite dish in backyard
Privity rule would say you can’t win because not parties to the agreement
You buy property, you are bound by everything registered on title
For the preceding 40 years
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