Question 1

The transfer of rights under a contract is called a(n):

Accepted Answer

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

Question 2

Jessica contracts with a custom furniture maker for the construction of an ornate walnut desk.Jessica explains to the furniture maker that this desk is a gift for Jessica's boyfriend and that the desk should be shipped directly to the boyfriend.They agree that the desk will be delivered on June 1,2010.On May 27,2010,Jessica tells her boyfriend about the gift.Which of the following is true?

Accepted Answer

A)  Jessica has delegated the duty to deliver the desk to the furniture maker. 
B)  If Jessica tells the furniture maker that there has been a change in plans and that her boyfriend is to not get the desk, the boyfriend can sue either Jessica or the furniture maker. 
C)  Because the boyfriend gave no consideration for the desk, he acquires no rights to sue under the contract. 
D)  Jessica and the furniture maker have entered into a novation agreement. 
E)  The boyfriend can recover from the furniture maker if the furniture maker delivers a defective desk. 
A)  Jessica has delegated the duty to deliver the desk to the furniture maker. 
B)  If Jessica tells the furniture maker that there has been a change in plans and that her boyfriend is to not get the desk, the boyfriend can sue either Jessica or the furniture maker. 
C)  Because the boyfriend gave no consideration for the desk, he acquires no rights to sue under the contract. 
D)  Jessica and the furniture maker have entered into a novation agreement. 
E)  The boyfriend can recover from the furniture maker if the furniture maker delivers a defective desk.

Question 3

Some courts permit the delegation of impersonal duties despite the existence of an anti-delegation clause.

Accepted Answer

A) True 
 B)False

Question 4

Upon formation,an accord and a substituted contract both have the same effect on the duties of the original contract.

Accepted Answer

A) True 
 B)False

Question 5

Only people specifically identified by name in a contract may have the rights of an intended beneficiary.

Accepted Answer

A) True 
 B)False

Question 6

When there has been an assignment of rights under a contract,who has a duty to notify the obligor of the assignment?

Accepted Answer

A)  the assignor 
B)  the assignee 
C)  the assignor and the assignee 
D)  neither the assignor nor the assignee 
E)  the party closer to the obligor geographically 
A)  the assignor 
B)  the assignee 
C)  the assignor and the assignee 
D)  neither the assignor nor the assignee 
E)  the party closer to the obligor geographically

Question 7

Only a few states recognize the doctrine of commercial impracticability as an excuse for nonperformance of contracts.

Accepted Answer

A) True 
 B)False

Question 8

When an assignor makes an assignment of a right under a contract,the assignee is under a duty to notify the obligor that:

Accepted Answer

A)  the assignment has been made. 
B)  performance must be rendered by the assignee. 
C)  the assignment has been made, or performance must be rendered by the assignee. 
D)  the assignment has been made, and performance must be rendered to the assignee. 
E)  the assignment has been made, and performance must be rendered to the assignor. 
A)  the assignment has been made. 
B)  performance must be rendered by the assignee. 
C)  the assignment has been made, or performance must be rendered by the assignee. 
D)  the assignment has been made, and performance must be rendered to the assignee. 
E)  the assignment has been made, and performance must be rendered to the assignor.

Question 9

What are the two (2)tests used to judge whether or not a satisfaction-based condition precedent has been met?

Accepted Answer

A)  the "all facts and circumstances" test and the "good faith" test 
B)  the "objective standard" test and the "industry custom" test 
C)  the "reasonable person" test and the "good faith" test 
D)  the "incidental beneficiary" test and the "personal satisfaction" test 
E)  the "personal satisfaction" test and the "reasonable person" test 
A)  the "all facts and circumstances" test and the "good faith" test 
B)  the "objective standard" test and the "industry custom" test 
C)  the "reasonable person" test and the "good faith" test 
D)  the "incidental beneficiary" test and the "personal satisfaction" test 
E)  the "personal satisfaction" test and the "reasonable person" test

Question 10

A creditor beneficiary cannot sue on the contract that made her a creditor beneficiary.

Accepted Answer

A) True 
 B)False

Question 11

Josh is having a house built and the contract specifies that the completion date is November 23rd.If the builder doesn't complete the house until November 28th,the builder is not liable for damages unless a "time is of the essence" clause is part of the contractual conditions.

Accepted Answer

A) True 
 B)False

Question 12

Wilma has signed a contract to purchase a car with 48 monthly payments.If she changes her mind she can assign the car and payment obligation to her friend Betty as long as Betty has sufficient income to make the payments.

Accepted Answer

A) True 
 B)False

Question 13

From the assignor's perspective,the unconditional assignment of a contract right ________ all the assignor's rights,including the right to sue the obligor directly for non-performance.

Accepted Answer

A)  preserves 
B)  enhances 
C)  reduces 
D)  extinguishes 
E)  codifies 
A)  preserves 
B)  enhances 
C)  reduces 
D)  extinguishes 
E)  codifies

Question 14

What is the purpose of a force majeure clause in a contract?

Accepted Answer

A)  It sets out the damages to be awarded in the event of a breach. 
B)  It specifies that the entire agreement of the parties is contained within the written contract. 
C)  It identifies certain events, such as natural disasters, that will discharge the parties from their duties under the contract. 
D)  It provides for one of the parties to a contract to be replaced by another. 
E)  It is how the parties to a contract will be coerced to perform their duties. 
A)  It sets out the damages to be awarded in the event of a breach. 
B)  It specifies that the entire agreement of the parties is contained within the written contract. 
C)  It identifies certain events, such as natural disasters, that will discharge the parties from their duties under the contract. 
D)  It provides for one of the parties to a contract to be replaced by another. 
E)  It is how the parties to a contract will be coerced to perform their duties.

Question 15

An obligor can assert any defense he or she had against the assignor or the assignee.

Accepted Answer

A) True 
 B)False

Question 16

John entered into a contract with Barb to restore Barb's antique Ford for $9,000.Because John owes his younger brother a large sum of money,John assigned,prior to notifying Barb of the assignment,his right to receive payment to his brother.John began the restoration,but quickly stopped working on the car.Because of this,Barb retrieved the car from John.Almost no restoration work had been performed.Which of the following is true in this situation?

Accepted Answer

A)  As a result of the assignment, John's brother is entitled to payment despite the fact that John did not perform the restoration. 
B)  Because of the assignment, John's brother was responsible for John's performance. 
C)  John's brother does not have a right to collect the $9,000 from Barb. 
D)  Barb is obligated to allow John's brother to complete the restoration if he so desires. 
E)  John's assignment of his right to payment without Barb's consent was improper and discharged John's duties under the contract. 
A)  As a result of the assignment, John's brother is entitled to payment despite the fact that John did not perform the restoration. 
B)  Because of the assignment, John's brother was responsible for John's performance. 
C)  John's brother does not have a right to collect the $9,000 from Barb. 
D)  Barb is obligated to allow John's brother to complete the restoration if he so desires. 
E)  John's assignment of his right to payment without Barb's consent was improper and discharged John's duties under the contract.

Question 17

When there is an accord and satisfaction,when are the duties under the original contract discharged?

Accepted Answer

A)  when the original contract is breached 
B)  when the accord is formed 
C)  when the duties of the original contract are fully performed by one of the parties 
D)  when the duties under the accord are fully performed by both parties 
E)  when the duties under both the original contract and the accord are fully performed by both parties 
A)  when the original contract is breached 
B)  when the accord is formed 
C)  when the duties of the original contract are fully performed by one of the parties 
D)  when the duties under the accord are fully performed by both parties 
E)  when the duties under both the original contract and the accord are fully performed by both parties

Question 18

A party's duty to perform under a contract may be discharged by mutual agreement of the parties,by impossibility of performance,by commercial impracticability,or by operation of law.

Accepted Answer

A) True 
 B)False

Question 19

Many professional athletes' contracts contain a clause permitting an assignment of the contract.

Accepted Answer

A) True 
 B)False

Question 20

Sandy was in her sixties and had a single child,a daughter,Tonya,who was approaching her fortieth birthday.Sandy wanted to do something special for Tonya's fortieth birthday.Tonya approached a local contractor and decorator and discussed this with them.Sandy,the decorator and the contractor entered into a contract wherein the contractor would construct an addition onto Tonya's house,expanding her kitchen into a large combination kitchen and family room.In addition,all of the kitchen countertops,cabinets and appliances would be replaced.With the assistance of the decorator,new furniture would be acquired and all of the wall coverings and window treatments would be replaced.Because Sandy did not want her tastes imposed on Tonya,the contract contained a clause that read,"All work must meet the personal satisfaction of Tonya." Tonya thought that this was a great birthday present and enjoyed working with the decorator and contractor in working out the details of the project.She had been so busy as the project approached its conclusion that she hadn't really stopped to look it over closely.One Sunday she examined all the work closely and found several problems.She then told the contractor that part of the kitchen countertop was not level and that anything spilled on it would immediately run off onto the floor.She decided that she did not like the placement of some of the kitchen cabinets and wanted them changed.She also said that many of the seams on the wallpaper had gaps that were too large.Lastly,she said that the color of the paint on the wood trim was too dark.Although Tonya was happy with the new floor,she was upset that the contractor had subcontracted its installation rather than install it himself.The contractor brought in an outside consultant who said that all workmanship except for the countertop exceeded normal standards.Two other decorators said that the color of the woodwork was proper.The contractor refused to make any changes.Tonya is unhappy with the work and wants to sue the contractor and also wants to sue her mother.Discuss this situation.

Accepted Answer

Tonya is a donee beneficiary under her m

Exam 13: Third-Party Rights and Discharge

The transfer of rights under a contract is called a(n):

Some courts permit the delegation of impersonal duties despite the existence of an anti-delegation clause.

Upon formation,an accord and a substituted contract both have the same effect on the duties of the original contract.

Only people specifically identified by name in a contract may have the rights of an intended beneficiary.

When there has been an assignment of rights under a contract,who has a duty to notify the obligor of the assignment?

Only a few states recognize the doctrine of commercial impracticability as an excuse for nonperformance of contracts.

When an assignor makes an assignment of a right under a contract,the assignee is under a duty to notify the obligor that:

What are the two (2)tests used to judge whether or not a satisfaction-based condition precedent has been met?

A creditor beneficiary cannot sue on the contract that made her a creditor beneficiary.

Josh is having a house built and the contract specifies that the completion date is November 23rd.If the builder doesn't complete the house until November 28th,the builder is not liable for damages unless a "time is of the essence" clause is part of the contractual conditions.

Wilma has signed a contract to purchase a car with 48 monthly payments.If she changes her mind she can assign the car and payment obligation to her friend Betty as long as Betty has sufficient income to make the payments.

From the assignor's perspective,the unconditional assignment of a contract right ________ all the assignor's rights,including the right to sue the obligor directly for non-performance.

What is the purpose of a force majeure clause in a contract?

An obligor can assert any defense he or she had against the assignor or the assignee.

When there is an accord and satisfaction,when are the duties under the original contract discharged?

A party's duty to perform under a contract may be discharged by mutual agreement of the parties,by impossibility of performance,by commercial impracticability,or by operation of law.

Many professional athletes' contracts contain a clause permitting an assignment of the contract.

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Josh is having a house built and the contract specifies that the completion date is November 23^rd.If the builder doesn't complete the house until November 28^th,the builder is not liable for damages unless a "time is of the essence" clause is part of the contractual conditions.