Exam 15: Third Parties

Shirley is an actress under contract with Twentieth Century.Shirley agreed to perform the lead role in a musical to be filmed in Hollywood by Twentieth Century.At the last minute,Twentieth Century decided to scrap the musical and assigned its rights in Shirley to MGM.MGM was planning to film a western in Australia requiring Shirley to spend six months filming in Australia.Can Shirley successfully prevent this assignment?

Which statement most accurately describes third party beneficiary rights?

Most,but not all,contract rights are assignable.

The status of a third party is determined by:

Gill and Mike are the original parties to a contract.Mike is obligated to design a brochure for Gill's massage business.They subsequently make an agreement with Eric that Eric should take the place of Mike and assume all of Mike's rights and duties under the contract.The agreement releases Mike from his obligations under the contract.This agreement is:

Jerry purchased a state-of-the-art computer for his personal use from Computer City on an installment loan contract thinking he would make monthly payments directly to Computer City.The sales contract stated that in the event the contract is assigned to a third party,the purchaser (Jerry)promises he will not assert any claim or defense against the assignee which he might have against Computer City.Computer City immediately assigns the contract rights to Finance USA.The computer stops working within two weeks of the purchase.

Briefly discuss the enforceability of contracts by third parties.

Amanda buys a vacuum cleaner to use in her home from retailer Andy.Amanda promises to pay for it in six monthly installment of $50 each.Andy assigns the contract to Big Finance Co.who paid value and took without notice of any defense.Big Finance Co.sues Amanda for nonpayment.Amanda has stopped making payments because the vacuum stopped working and Andy refuses to honor the express warranty he made to her at the time of the sale.Generally,any defense that Amanda may have against Andy is good against Big Finance Co.

A party may make either an assignment or a delegation,but cannot make both an assignment and a delegation simultaneously.

A third party beneficiary's status occurs:

An assignment is valid:

Wright Company contracted with the city of St.Louis to train and employ disadvantaged youths.If Wright fails to fulfill the contract and is sued by one of the disadvantaged youths,the youth would:

A rock group assigns its payment under a performance contract to the Costume Shop,a business that has supplied the group with outrageous stage outfits,and to which the group owes a great sum of money.Under this arrangement the rock group is the:

The beneficiary of a life insurance policy would ordinarily be:

Contract prohibitions against assignments are invalid as a matter of public policy.

Joan purchases a recreational vehicle on credit from RV World.RV World keeps a security interest in the vehicle.RV World then assigns the security interest to West First Bank.Explain what having a security interest means.Under the UCC,what defenses can Joan assert against West First Bank?

Ted and Alice own their recreational vehicle subject to a security agreement to Third U.S.Bank to secure the repayment of the purchase money loan.Ted and Alice sell their RV to Bob and Carol,who agree to take over the loan payments to the bank.There is no novation with the bank.Under these facts,if Bob and Carol do not make the loan payments,Third U.S.Bank:

Generally,in comparison to a donee beneficiary,and a creditor beneficiary has:

If Ray agrees to rake leaves for Michelle in exchange for Michelle's promise to pay off the debt Ray owes to Dean,then Dean is a donee beneficiary of the agreement between Ray and Michelle.

An assignment: