Exam 16: Third Parties to Contracts

Marlene owes Bailey $750 due June 1.Bailey assigns the debt to Greg on May 1, but neither Bailey nor Greg informs Marlene.On June 1, Marlene pays Bailey.Marlene is fully discharged from her obligation.

A contract in which a party (the promisor) promises to render a certain performance not to the other party (the promisee) but to a third person (the beneficiary) is called a third-party beneficiary contract.

Mary goes to her stockbroker, purchases 30 shares of P & G stock, and instructs the broker to register the stock in her husband Warren's name.If this stock is intended as a Valentine's gift, Warren becomes:

Give an example of an assignment of rights and explain the relationship of the parties.

Discuss defenses available to the promisor in an action by an intended third-party beneficiary to enforce the promise.

Discuss the revocability of assignments.

In some states, the vesting of a third party's rights occurs only when the third party learns of the contract and assents to it.

Barbara owes Arthur $2,000.On July 1, Arthur assigns the right to the $2,000 to Caleb.Thereafter, on July 15, Arthur assigns the same right to David, who in good faith gives value for it and knows nothing about the first assignee.In this case:

The delegation of a duty still leaves the delegator responsible for the performance of the duty.

Dena purchases a life insurance policy naming her adult son as beneficiary.His rights as a donee beneficiary vest at the time she purchases the policy, even though the policy permits her to cancel the policy or change beneficiaries.

List the implied warranties imposed by law on an assignor who has received value for the assignment.

Article 9 of the UCC makes ineffective any term in a contract prohibiting the assignment of a security interest arising out of a sale of any right to payment for goods sold.

A(n) __________ is an intended beneficiary of a contract who receives the benefits of the contract as a gift.

a.Distinguish between an assignment, a delegation, and a third-party beneficiary contract as to the time rights of the third party arise. b.Identify and define the following terms: assignor and assignee; delegator and delegatee; intended beneficiary, incidental beneficiary, creditor beneficiary.

Scott voluntarily transfers to Carlos his right to receive a payment of $425 due to him from Opal.Opal is the assignee.

Stark enters into a contract with a contractor to build a large shopping mall in River City.Donner will greatly benefit from this contract since his convenience store is adjacent to the mall.Donner in this instance is:

After an assignment, only the assignee has a right to the obligor's performance.

Veronica entered into a contract with a local car dealer to have a new convertible sports car delivered to her daughter, Jasmine, as a college graduation present.In this contract, Jasmine is:

All but which of the following is true about a delegation of duties?

To protect the obligor or the public interest, some contract rights are not assignable.