Question 1

A party who is owed a right under a contract is called an obligor.

Accepted Answer

A) True 
 B)False  False

Question 2

A legal right that arises out of a breach of contract may be assigned.

Accepted Answer

A) True 
 B)False  True

Question 3

The term ________ refers to a third party who is not in privity of contract but who has rights under the contract and can enforce the contract against the promisor.

Accepted Answer

A) third-party contractor 
B) third-party assignee 
C) subassignee 
D) intended third-party beneficiary 
A) third-party contractor 
B) third-party assignee 
C) subassignee 
D) intended third-party beneficiary D

Question 4

Which of the following is true in the event an assignee does not provide a notice of assignment to the obligor?

Accepted Answer

A) The assignee's only course of action is to sue the obligee for damages. 
B) The assignee cannot sue the assignor for damages. 
C) The obligor's only recourse is to sue the assignee for damages. 
D) The assignee cannot sue the obligor to recover payment. 
A) The assignee's only course of action is to sue the obligee for damages. 
B) The assignee cannot sue the assignor for damages. 
C) The obligor's only recourse is to sue the assignee for damages. 
D) The assignee cannot sue the obligor to recover payment.

Question 5

Which of the following is true of an assignment of a right?

Accepted Answer

A) Unconditional assignment of a contract right retains all the assignor's rights. 
B) The obligor is entitled to performance from the assignor. 
C) The assignor loses the right to sue the obligor directly for nonperformance in an unconditional assignment. 
D) The obligor cannot raise personal defenses against the assignee. 
A) Unconditional assignment of a contract right retains all the assignor's rights. 
B) The obligor is entitled to performance from the assignor. 
C) The assignor loses the right to sue the obligor directly for nonperformance in an unconditional assignment. 
D) The obligor cannot raise personal defenses against the assignee.

Question 6

Anti-assignment clause in a contract prohibits the assignment of rights under the contract.

Accepted Answer

A) True 
 B)False

Question 7

Karen borrows $10,000 from Celeste.Karen is to pay Celeste the principal amount,with 8 percent interest,over the next five years in 60 equal monthly payments.After one year of receiving proper payments from Karen,Celeste assigns this right to receive future payments to Larry.Who has the duty to notify Karen about the assignment?

Accepted Answer

A) Celeste 
B) Larry 
C) Karen's attorney 
D) the authority who drafted the contract 
A) Celeste 
B) Larry 
C) Karen's attorney 
D) the authority who drafted the contract

Question 8

Which of the following phrases describes the term covenant?

Accepted Answer

A) an unconditional promise to perform 
B) a breach of contract 
C) mutual rescission of a contract 
D) successive assignments of a right 
A) an unconditional promise to perform 
B) a breach of contract 
C) mutual rescission of a contract 
D) successive assignments of a right

Question 9

A(n)________ refers to a condition that requires the occurrence of an event before a party is obligated to perform a duty under a contract.

Accepted Answer

A) Condition precedent 
B) Condition subsequent 
C) Concurrent condition 
D) Implied condition 
A) Condition precedent 
B) Condition subsequent 
C) Concurrent condition 
D) Implied condition

Question 10

Distinguish between conditions and covenants.

Accepted Answer

A covenant is an unconditional promise t

Question 11

Approval clauses require that the ________ approve any assignment of a contract.

Accepted Answer

A) obligee 
B) obligor 
C) assignor 
D) assignee 
A) obligee 
B) obligor 
C) assignor 
D) assignee

Question 12

An obligor can raise any personal defenses he or she may have directly against an assignee.

Accepted Answer

A) True 
 B)False

Question 13

A(n)________ occurs when there is a transfer of both rights and duties under a contract.

Accepted Answer

A) assignment and delegation 
B) declaration of duties 
C) assumption of duties 
D) discharge 
A) assignment and delegation 
B) declaration of duties 
C) assumption of duties 
D) discharge

Question 14

If the conditions are met,a qualified promise becomes a covenant.

Accepted Answer

A) True 
 B)False

Question 15

The reasonable person test is used to judge contracts involving mechanical fitness.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is true of third-party beneficiaries?

Accepted Answer

A) A creditor beneficiary is an unintended beneficiary. 
B) An intended third-party beneficiary cannot enforce the contract against the promisor. 
C) An incidental beneficiary cannot sue under other people's contracts. 
D) Incidental beneficiary is a third party who is benefitted intentionally. 
A) A creditor beneficiary is an unintended beneficiary. 
B) An intended third-party beneficiary cannot enforce the contract against the promisor. 
C) An incidental beneficiary cannot sue under other people's contracts. 
D) Incidental beneficiary is a third party who is benefitted intentionally.

Question 17

An assignment and delegation occurs when there is a transfer of both rights and duties under a contract.

Accepted Answer

A) True 
 B)False

Question 18

James hires Franco for a painting job.Their contract explicitly states that Franco's employment can be terminated if he is employed by another party during the contract period.Two weeks into the job,James finds out that Franco is also working for a painting agency two blocks away and terminates his employment.This is an instance of ________.

Accepted Answer

A) condition precedent 
B) condition subsequent 
C) concurrent condition 
D) implied condition 
A) condition precedent 
B) condition subsequent 
C) concurrent condition 
D) implied condition

Question 19

Contracts for the provision of personal services are generally not assignable.

Accepted Answer

A) True 
 B)False

Question 20

Lionel Richmond is a soccer player who has a six-year contract with the Christshire United soccer team.Two years into the contract,he meets with an accident which results in the complete amputation of his right leg.On what basis is Richmond discharged from further performance of the contract?

Accepted Answer

A) novation 
B) substituted contract 
C) accord and satisfaction 
D) discharge by impossibility 
A) novation 
B) substituted contract 
C) accord and satisfaction 
D) discharge by impossibility

Exam 15: Third-Party Rights and Discharge

A party who is owed a right under a contract is called an obligor.

A legal right that arises out of a breach of contract may be assigned.

The term ________ refers to a third party who is not in privity of contract but who has rights under the contract and can enforce the contract against the promisor.

Which of the following is true in the event an assignee does not provide a notice of assignment to the obligor?

Which of the following is true of an assignment of a right?

Anti-assignment clause in a contract prohibits the assignment of rights under the contract.

Which of the following phrases describes the term covenant?

A(n)________ refers to a condition that requires the occurrence of an event before a party is obligated to perform a duty under a contract.

Distinguish between conditions and covenants.

Approval clauses require that the ________ approve any assignment of a contract.

An obligor can raise any personal defenses he or she may have directly against an assignee.

A(n)________ occurs when there is a transfer of both rights and duties under a contract.

If the conditions are met,a qualified promise becomes a covenant.

The reasonable person test is used to judge contracts involving mechanical fitness.

Which of the following is true of third-party beneficiaries?

An assignment and delegation occurs when there is a transfer of both rights and duties under a contract.

Contracts for the provision of personal services are generally not assignable.

Lionel Richmond is a soccer player who has a six-year contract with the Christshire United soccer team.Two years into the contract,he meets with an accident which results in the complete amputation of his right leg.On what basis is Richmond discharged from further performance of the contract?

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