Question 1

If a contract requires the occurrence or nonoccurrence of an event before a party is obligated to perform a contractual duty,this is a condition antecedent.

Accepted Answer

A) True 
 B)False  False

Question 2

Where a valid delegation of duties contains the term assumption or other similar language,there is a declaration of duties.

Accepted Answer

A) True 
 B)False  False

Question 3

In a declaration of duties,the delegatee is not liable to the obligee for nonperformance or negligent performance,and the obligee cannot recover damages from the delegatee.

Accepted Answer

A) True 
 B)False  True

Question 4

The American Rule regarding successive assignments is also referred to as the ________ Rule.

Accepted Answer

A)  New York 
B)  Boston 
C)  Los Angeles 
D)  Chicago 
E)  San Francisco 
A)  New York 
B)  Boston 
C)  Los Angeles 
D)  Chicago 
E)  San Francisco

Question 5

Which of the following is a true statement about the rights of an assignee of contract rights?

Accepted Answer

A)  The assignee must have received all of the assignor's rights, because partial assignments are not permissible. 
B)  The assignee often gets greater ability to enforce a right than the assignor had. 
C)  The assignee obtains the assignor's rights only if the obligor consents. 
D)  The assignee's rights are no greater than those of the assignor. 
E)  The assignee has rights, but must have the assignor institute any lawsuit needed to compel performance. 
A)  The assignee must have received all of the assignor's rights, because partial assignments are not permissible. 
B)  The assignee often gets greater ability to enforce a right than the assignor had. 
C)  The assignee obtains the assignor's rights only if the obligor consents. 
D)  The assignee's rights are no greater than those of the assignor. 
E)  The assignee has rights, but must have the assignor institute any lawsuit needed to compel performance.

Question 6

When an obligor transfers her obligation to perform a contract duty to another,this is known as a(n):

Accepted Answer

A)  denigration. 
B)  assignment. 
C)  delegation. 
D)  accord. 
E)  stipulation. 
A)  denigration. 
B)  assignment. 
C)  delegation. 
D)  accord. 
E)  stipulation.

Question 7

WorldRest Hotels has contracted with QuickBuild Construction to build a 650-bed hotel in Downtown Dallas.Marty has entered into a lease agreement for retail space in an adjacent building to open a gift shop catering to the hotel guests.QuickBuild was aware of Marty's lease agreement.QuickBuild breached its contract with WorldRest by not completing the hotel until seven months after the contractual due date.Because the hotel was late opening and there were seven months when the hotel had no guests,Marty lost considerable profits in the retail shop.Marty has sued QuickBuild to recover these lost profits.Which of the following is true?

Accepted Answer

A)  Marty is a donee beneficiary of QuickBuild's contract to build the hotel. 
B)  Marty cannot recover because Marty is an incidental beneficiary of the hotel construction contract. 
C)  Because QuickBuild is now in debt to Marty for the lost profits, Marty is a creditor beneficiary of the hotel construction contract. 
D)  Marty can recover in the situation on the basis of an assignment of rights. 
E)  The court would likely order QuickBuild to delegate its duties on future contracts so that they are finished on time. 
A)  Marty is a donee beneficiary of QuickBuild's contract to build the hotel. 
B)  Marty cannot recover because Marty is an incidental beneficiary of the hotel construction contract. 
C)  Because QuickBuild is now in debt to Marty for the lost profits, Marty is a creditor beneficiary of the hotel construction contract. 
D)  Marty can recover in the situation on the basis of an assignment of rights. 
E)  The court would likely order QuickBuild to delegate its duties on future contracts so that they are finished on time.

Question 8

Generally,the public and taxpayers are intended third-party beneficiaries to contracts entered into by the government on their behalf.

Accepted Answer

A) True 
 B)False

Question 9

Barry has contracted to paint the exterior of Al's house for $3,000.Al hired Barry because he heard that Barry did an excellent job.Because Al really wanted Barry to paint the house,the contract contained an anti-delegation clause.Barry,however,delegates his duty to paint the house to his younger brother,Doug.Barry and Doug agree that Barry will pay Doug $1,900 to paint the house.Doug is unaware of how much Al is paying Barry.Al is unaware of the fact that Doug will actually be painting the house.Which of the following is true about this situation?

Accepted Answer

A)  This is an example of a simultaneous assignment and delegation. 
B)  Barry has committed fraud by not telling Doug how much he is being paid by Al. 
C)  The anti-delegation clause would not be enforced, and Barry has not breached the contract. 
D)  Barry is obligated to pay Doug $3,000 if Doug properly does the complete job of painting Al's house. 
E)  Barry has breached the contract if Doug paints the house. 
A)  This is an example of a simultaneous assignment and delegation. 
B)  Barry has committed fraud by not telling Doug how much he is being paid by Al. 
C)  The anti-delegation clause would not be enforced, and Barry has not breached the contract. 
D)  Barry is obligated to pay Doug $3,000 if Doug properly does the complete job of painting Al's house. 
E)  Barry has breached the contract if Doug paints the house.

Question 10

A contract for life insurance with a named beneficiary is an example of a donee beneficiary contract.

Accepted Answer

A) True 
 B)False

Question 11

A qualified promise is another name for a covenant.

Accepted Answer

A) True 
 B)False

Question 12

What is the legal significance of whether a delegation of duties is an assumption of duties or a declaration of duties?

Accepted Answer

A)  It determines whether the delegator remains liable for the performance of the duty. 
B)  It determines whether the duty is one that can be delegated. 
C)  It determines whether the delegator must pay the delegatee to perform the duty. 
D)  It determines whether the delegatee is liable to the obligee for failure to perform. 
E)  It determines whether notice of the delegation must be given to the obligee. 
A)  It determines whether the delegator remains liable for the performance of the duty. 
B)  It determines whether the duty is one that can be delegated. 
C)  It determines whether the delegator must pay the delegatee to perform the duty. 
D)  It determines whether the delegatee is liable to the obligee for failure to perform. 
E)  It determines whether notice of the delegation must be given to the obligee.

Question 13

In many instances,the parties to a contract unintentionally benefit a third party when a contract is performed.In such situations,the third party is referred to as a(n)________ beneficiary.

Accepted Answer

A)  creditor 
B)  donee 
C)  third-party 
D)  incidental 
E)  accidental 
A)  creditor 
B)  donee 
C)  third-party 
D)  incidental 
E)  accidental

Question 14

Under which types of delegation of duties does the delegatee become liable to the obligee for the performance of the duty?

Accepted Answer

A)  assumption of duties 
B)  declaration of duties 
C)  both an assumption of duties and a declaration of duties 
D)  neither an assumption nor a declaration of duties 
E)  both an assumption of duties and a declaration of duties, if it can be shown that the obligee approved of the delegation. 
A)  assumption of duties 
B)  declaration of duties 
C)  both an assumption of duties and a declaration of duties 
D)  neither an assumption nor a declaration of duties 
E)  both an assumption of duties and a declaration of duties, if it can be shown that the obligee approved of the delegation.

Question 15

A force majeure clause is used to specify the remedies in the event of a breach of contract.

Accepted Answer

A) True 
 B)False

Question 16

A legal right that arises out of a breach of contract may not be assigned.

Accepted Answer

A) True 
 B)False

Question 17

What is the significance of a contract clause stating that "time is of the essence?"

Accepted Answer

A)  It creates a legal goal for the parties. 
B)  It puts a duty on the parties to a contract to perform as soon as possible. 
C)  It means that the contract is ineffective if the time for performance is not expressly stated. 
D)  It means that performance by the stated time is an express condition. 
E)  It means that if performance of the contract is completed within a short time of the stated time, it will be considered performed at essentially the proper time. 
A)  It creates a legal goal for the parties. 
B)  It puts a duty on the parties to a contract to perform as soon as possible. 
C)  It means that the contract is ineffective if the time for performance is not expressly stated. 
D)  It means that performance by the stated time is an express condition. 
E)  It means that if performance of the contract is completed within a short time of the stated time, it will be considered performed at essentially the proper time.

Question 18

What is the modern view when a legal document refers to the assignment of a contract?

Accepted Answer

A)  Only the rights of one party are assigned, and no duties of either party are assigned. 
B)  The rights of both parties are assigned, but no duties are assigned. 
C)  The rights of one party are assigned and that same party's duties are simultaneously delegated. 
D)  The rights of both parties are assigned, and the duties of both parties are delegated. 
E)  The rights are assigned only if the obligor consents, and duties are never assigned. 
A)  Only the rights of one party are assigned, and no duties of either party are assigned. 
B)  The rights of both parties are assigned, but no duties are assigned. 
C)  The rights of one party are assigned and that same party's duties are simultaneously delegated. 
D)  The rights of both parties are assigned, and the duties of both parties are delegated. 
E)  The rights are assigned only if the obligor consents, and duties are never assigned.

Question 19

When a delegator delegates duties,the delegator remains responsible for the performance of the duties.

Accepted Answer

A) True 
 B)False

Question 20

When a party improperly assigns the same contract rights to more than one assignee,the American rule provides that the earliest assignment in time prevails.

Accepted Answer

A) True 
 B)False

Exam 13: Third-Party Rights and Discharge

If a contract requires the occurrence or nonoccurrence of an event before a party is obligated to perform a contractual duty,this is a condition antecedent.

Where a valid delegation of duties contains the term assumption or other similar language,there is a declaration of duties.

In a declaration of duties,the delegatee is not liable to the obligee for nonperformance or negligent performance,and the obligee cannot recover damages from the delegatee.

The American Rule regarding successive assignments is also referred to as the ________ Rule.

Which of the following is a true statement about the rights of an assignee of contract rights?

When an obligor transfers her obligation to perform a contract duty to another,this is known as a(n):

Generally,the public and taxpayers are intended third-party beneficiaries to contracts entered into by the government on their behalf.

A contract for life insurance with a named beneficiary is an example of a donee beneficiary contract.

A qualified promise is another name for a covenant.

What is the legal significance of whether a delegation of duties is an assumption of duties or a declaration of duties?

In many instances,the parties to a contract unintentionally benefit a third party when a contract is performed.In such situations,the third party is referred to as a(n)________ beneficiary.

Under which types of delegation of duties does the delegatee become liable to the obligee for the performance of the duty?

A force majeure clause is used to specify the remedies in the event of a breach of contract.

A legal right that arises out of a breach of contract may not be assigned.

What is the significance of a contract clause stating that "time is of the essence?"

What is the modern view when a legal document refers to the assignment of a contract?

When a delegator delegates duties,the delegator remains responsible for the performance of the duties.

When a party improperly assigns the same contract rights to more than one assignee,the American rule provides that the earliest assignment in time prevails.

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