Exam 17: Third Party Rights

Steel Mill Inc. and Transport Delivery LLC enter into a contract. UniOil Corporation will indirectly benefit from the deal. Under the principle of privity, UniOil has the right to

An accountant can delegate his or her contractual duty to another accountant, even if the contract expressly prohibits it, because accounting is a delegable skill.

When the original parties to a contract agree that its performance should directly benefit a third party, that party can sue the promisor directly for breach.

Until the obligor has notice of assignment, the obligor can discharge his or her obligation by performance to any party.

A bank's sale of its right to receive payment on a loan to a third party is a transfer but not an assignment.

In a state in which a statute prohibits an employee from assigning the right to receive workers' compensation benefits, the employee can assign the right

As a general rule, any duty can be delegated.

The unconditional assignment of rights under a contract extinguishes any defenses that the obligor had against the assignor.

A transfer of contract rights to a third party is an incidental benefit .

For a price, Recycle LLC agrees to empty the dumpster behind Sushi Café. Recycle delegates this duty to Trash Inc. Sushi is

If a statute expressly prohibits assignment, the particular right in question cannot be assigned.

Beau borrows $15,000 from Credit Center to buy a car. The lender assigns the right to receive the loan payments to Debt Collections Inc. If Beau does not pay the debt, the assignee can

Jim and Kiel agree that Jim will fix the refrigeration unit in Kiel's Food Truck in exchange for payment of a debt that Jim owes to Lenders Bank. Under this contract, the intended beneficiary is

Molly is a third party beneficiary under a contract between Ned and Otis. Ned and Otis can modify or rescind their contract to take away Moly's rights under the contract without her consent

Leo contracts to install watering troughs in Ken's dairy barn. When Leo becomes seriously ill, he contracts with Jay to do the work. Jay is unreliable and never shows up. Ken hires Ike to do the installation. To recover for any loss on the deal, Ken can sue

In a contract for a sale of goods, the right to receive payment on an account may be assigned unless the sales contract prohibits such an assignment.

To create a valid delegation of duties requires

Laminate LLC agrees to buy factory equipment from Metalwork Company on the seller's misrepresentation that it meets certain specifications. Metalwork assigns the right to payment on the deal to Nations Credit Corporation. When the buyer discovers the fraud, the firm returns the equipment and cancels their contract. Laminate

Privity of contract establishes the basic principle that contracting parties have a right to privacy in the information expressed in their contracts.

Generally, the duties under a contract can be delegated