Exam 15: Third-Party Rights and Discharge

Sam and Sandy have an agreement whereby Sam will build a house on Sandy's beachfront lot.Before construction begins,Sandy changes her mind and decides she would rather build an addition onto her home in Baltimore.She discusses this with Sam,and they agree that he would build the addition to her home and not build the beach house.In this case,Sandy and Sam have:

A debtor who files for bankruptcy and receives a discharge from the federal bankruptcy court is relieved of the legal liability to pay the debts.

Patty acquires debt from the use of a credit card.The credit card company attempts to sell the debt to a credit collection company.Is such a transfer of debt usually legal?

Ralph Co.contracts to sell 500 televisions to Buyer.Ralph decides that it cannot fulfill its contract,so it transfers all its rights and duties to George Co.If George Co.fails to deliver the televisions as scheduled,then which of the following is true?

The American rule regarding successive assignment of rights is the majority rule.

A unilateral rescission is effective in terminating a contract if done in good faith.

An unconditional promise to perform is known as a(n):

Tenant has a lease on an apartment through December of the current year.Tenant and Newtenant go to Landlord to have Newtenant take over the lease through the end of December.Landlord agrees and releases Tenant from any responsibility under the lease.This is a(n):

In a contract,a party can be both an obligor and an obligee.

Which of the following is true about the similarities and differences between a substituted contract and a novation?

Hargrove Inc.is a distributor of grains and other farm commodities,which it buys directly from the farmers.Hargrove contracts with National Bakery Association to sell and deliver 1,000 tons of wheat during August.The wheat is to be delivered by rail (train).During July,before the wheat was shipped,the railroads went on strike.The wheat could not be shipped by train.However,the grain could be shipped by truck,but only at a cost double that of trains.Hargrove refused to ship the wheat at the extra expense.National sues for breach of contract.It should be noted that the trains have gone on strike four times in the past ten years,and that there was talk of a strike before this contract was created.Who will win in this lawsuit and why?

A force majeure clause:

Robert leased an apartment from Universal Apartments for $600 per month,signing a one-year lease.After two months,Robert's employer transferred him out-of-state,so Robert cannot use the apartment anymore.However,Robert's friend Sam would like to take over the apartment.Robert would like to assign his lease to Sam,but the lease contains a clause that allows assignment only with the consent of the landlord.The landlord refuses to consent to the assignment,because he could now end Robert's lease and rent the apartment for $800 per month.Sam would be just as good a tenant as Robert.Discuss the validity of the anti-assignment clause.

A transfer of some portion of a contract's rights and corresponding duties means that:

On Alice's recent birthday she received a card from her father saying that he was giving her a new desk and table to be made by a local furniture maker.They would be ready in about a month.A week later,without Alice's knowledge,her father talked to the furniture maker about rescinding the contract for the table.The furniture maker agreed to this.About a month after her birthday,the furniture maker delivered the desk.When Alice asked about the table,she learned about the rescission.As she was putting items into the desk,she noticed that the workmanship was poor.Among other problems,two drawers would not operate properly and the finish had several flaws.Alice wants to sue both the furniture maker and her father for the defective desk and the table.Discuss her options.

Regarding the assignment of contract rights,which of the following is true?

Commercial impracticability will sometimes excuse performance if an unforeseeable event makes it impractical for the promisor to perform.

The bank lends money to Jane to buy a car.After several months,Jane sells the car to Dan.Dan agrees to pay off the loan to the Bank.If Dan fails to pay the loan,then which of the following is true?

An accord and satisfaction discharges the original contract upon the formation of the accord.

The party who is owed a right under the contract is called the assignor.