Question 1

Under the Restatement, if there are successive assignments of the same right:

Accepted Answer

A)  the first assignee to notify the obligor prevails. 
B)  the latest assignee is usually entitled to the assigned right. 
C)  a prior assignee is entitled to the assigned right to the exclusion of a subsequent assignee in most circumstances. 
D)  a subsequent assignee is entitled to the assigned right unless a prior assignee gave value and obtains either a judgment against the obligor or a new contract with the obligor. 
A)  the first assignee to notify the obligor prevails. 
B)  the latest assignee is usually entitled to the assigned right. 
C)  a prior assignee is entitled to the assigned right to the exclusion of a subsequent assignee in most circumstances. 
D)  a subsequent assignee is entitled to the assigned right unless a prior assignee gave value and obtains either a judgment against the obligor or a new contract with the obligor.

Question 2

A gratuitous assignment is revocable by the assignor.

Accepted Answer

A) True 
 B)False

Question 3

Annette entered into a contract with a local truck dealer to have a new truck delivered to her daughter, Sue, as a graduation present. In this contract, Sue is:

Accepted Answer

A)  an incidental beneficiary. 
B)  a donee beneficiary. 
C)  a creditor beneficiary. 
D)  an assignor. 
A)  an incidental beneficiary. 
B)  a donee beneficiary. 
C)  a creditor beneficiary. 
D)  an assignor.

Question 4

Which of the following duties would not be delegable?

Accepted Answer

A)  John has a contractual duty to pay Isaac $50. 
B)  Karl has a contractual duty to deliver 50 bushels of corn to Michael by October 1. 
C)  Jeffrey has a duty to mow Georgia's lawn at least once a week. 
D)  Arthur has a duty to teach an accounting class at a community college during the fall semester. 
A)  John has a contractual duty to pay Isaac $50. 
B)  Karl has a contractual duty to deliver 50 bushels of corn to Michael by October 1. 
C)  Jeffrey has a duty to mow Georgia's lawn at least once a week. 
D)  Arthur has a duty to teach an accounting class at a community college during the fall semester.

Question 5

A(n) __________ is a third party who obtains possible benefits but no rights under a contract.

Accepted Answer

A)  incidental beneficiary 
B)  intended beneficiary 
C)  assignor 
D)  donee beneficiary 
A)  incidental beneficiary 
B)  intended beneficiary 
C)  assignor 
D)  donee beneficiary

Question 6

In which of the following situations is there a third party incidental beneficiary who would be unable to enforce the agreement?

Accepted Answer

A)  Wholesalers, when the buyer of a business promises the seller that he will pay outstanding debts to wholesalers who have supplied inventory for the business. 
B)  Workers, where a contractor agrees to post a performance bond to assure payment of workers and material suppliers. 
C)  A debtor, where a new partner enters an accounting firm and agrees to pay a share of debts incurred prior to his admission to the firm. 
D)  A doctor, when an automobile accident policy states that the insurance company will reimburse the insured for medical expenses incurred as a result of an automobile accident. 
A)  Wholesalers, when the buyer of a business promises the seller that he will pay outstanding debts to wholesalers who have supplied inventory for the business. 
B)  Workers, where a contractor agrees to post a performance bond to assure payment of workers and material suppliers. 
C)  A debtor, where a new partner enters an accounting firm and agrees to pay a share of debts incurred prior to his admission to the firm. 
D)  A doctor, when an automobile accident policy states that the insurance company will reimburse the insured for medical expenses incurred as a result of an automobile accident.

Question 7

The student government of State University has a contract with a famous rock band to perform at the university on homecoming weekend. The band cannot assign its rights and delegate its duties under this contract.

Accepted Answer

A) True 
 B)False

Question 8

If a contract explicitly provides that it may be assigned, then rights under it are assignable even if the assignment would change the duty, risk, or burden of performance on the obligor.

Accepted Answer

A) True 
 B)False

Question 9

Barbara owes Arthur $2,000. On July 1, Arthur assigns the debt 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. David immediately notifies Barbara of the assignment. In this case:

Accepted Answer

A)  under the majority rule, David has priority. 
B)  under the English Rule, a second assignment of the same claim can never be effective. 
C)  under the English Rule, David has priority. 
D)  under all of the rules, Caleb has priority since he was the first assignee in time. 
A)  under the majority rule, David has priority. 
B)  under the English Rule, a second assignment of the same claim can never be effective. 
C)  under the English Rule, David has priority. 
D)  under all of the rules, Caleb has priority since he was the first assignee in time.

Question 10

When a partial assignment is made, the obligor may require all the parties entitled to the promised performance to litigate in one action any issues concerning the contract performance.

Accepted Answer

A) True 
 B)False

Question 11

Discuss the revocability of assignments.

Accepted Answer

When an assignee gives consideration in

Question 12

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.

Accepted Answer

A) True 
 B)False

Question 13

An assignee's assent is required for any assignment to be valid.

Accepted Answer

A) True 
 B)False

Question 14

In general, an assignment includes an implied warranty that the assignor who receives value will do nothing to defeat or impair the assignment once it is delivered.

Accepted Answer

A) True 
 B)False

Question 15

An obligor may assert rights of setoff arising out of entirely separate matters that he might have against the assignor, as long as the matters arose before he had notice of the assignment.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Assignments of future wages are subject to statutes that sometimes prohibit them altogether.

Accepted Answer

A) True 
 B)False

Question 18

Will wants to buy a new car. He goes to the bank to get a loan for the purchase, and signs an agreement to pay $10 per month in premiums on a term life insurance policy which names the bank as the recipient of the policy proceeds in the event of his death before the loan is repaid. The bank is a(n):

Accepted Answer

A)  incidental beneficiary. 
B)  creditor beneficiary. 
C)  donee beneficiary. 
D)  assignee. 
A)  incidental beneficiary. 
B)  creditor beneficiary. 
C)  donee beneficiary. 
D)  assignee.

Question 19

Under Article 2 of the UCC, a right to damages for breach of the whole contract can be assigned despite a contractual provision to the contrary.

Accepted Answer

A) True 
 B)False

Question 20

Carlos voluntarily transfers to Opal his right to receive a payment of $125 due to him from Scott. Scott is the assignee.

Accepted Answer

A) True 
 B)False

Exam 16: Third Parties to Contracts

Under the Restatement, if there are successive assignments of the same right:

A gratuitous assignment is revocable by the assignor.

Annette entered into a contract with a local truck dealer to have a new truck delivered to her daughter, Sue, as a graduation present. In this contract, Sue is:

Which of the following duties would not be delegable?

A(n) __________ is a third party who obtains possible benefits but no rights under a contract.

In which of the following situations is there a third party incidental beneficiary who would be unable to enforce the agreement?

The student government of State University has a contract with a famous rock band to perform at the university on homecoming weekend. The band cannot assign its rights and delegate its duties under this contract.

If a contract explicitly provides that it may be assigned, then rights under it are assignable even if the assignment would change the duty, risk, or burden of performance on the obligor.

Barbara owes Arthur $2,000. On July 1, Arthur assigns the debt 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. David immediately notifies Barbara of the assignment. In this case:

When a partial assignment is made, the obligor may require all the parties entitled to the promised performance to litigate in one action any issues concerning the contract performance.

Discuss the revocability of assignments.

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.

An assignee's assent is required for any assignment to be valid.

In general, an assignment includes an implied warranty that the assignor who receives value will do nothing to defeat or impair the assignment once it is delivered.

An obligor may assert rights of setoff arising out of entirely separate matters that he might have against the assignor, as long as the matters arose before he had notice of the assignment.

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

Assignments of future wages are subject to statutes that sometimes prohibit them altogether.

Under Article 2 of the UCC, a right to damages for breach of the whole contract can be assigned despite a contractual provision to the contrary.

Carlos voluntarily transfers to Opal his right to receive a payment of $125 due to him from Scott. Scott is the assignee.

Introduction to Law

Business Ethics

Civil Dispute Resolution

Constitutional Law

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Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

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Contractual Capacity

Contracts in Writing

Performance, Breach, and Discharge

Contract Remedies

Introduction to Sales and Leases

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Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

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Transfer and Holder in Due Course

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Relationship of Principal and Agent

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Secured Transactions and Suretyship

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