Question 1

What happens when an obligor does not get a notice of assignment?

Accepted Answer

When an assignor makes an assignment of

Question 2

Ellen,who has a good driving record,purchases automobile insurance from an insurance company.Ellen cannot assign her rights to be insured to another driver for which of the following reasons?

Accepted Answer

A) The assignment would materially alter the risk and duties of the insurance company. 
B) Claiming insurance is a future right and hence cannot be assigned. 
C) Insurance is a personal service contract and hence cannot be assigned. 
D) Personal contracts like insurance are assignable only with the agreement of all parties involved in the contract. 
A) The assignment would materially alter the risk and duties of the insurance company. 
B) Claiming insurance is a future right and hence cannot be assigned. 
C) Insurance is a personal service contract and hence cannot be assigned. 
D) Personal contracts like insurance are assignable only with the agreement of all parties involved in the contract.

Question 3

Nonperformance of a covenant is not considered a breach of contract because a covenant is an unconditional promise.

Accepted Answer

A) True 
 B)False

Question 4

In a concurrent condition,each party's duty to perform is conditioned on the other party's duty to perform.

Accepted Answer

A) True 
 B)False

Question 5

A contract between a retailer and a supplier provides that payment is due upon delivery of goods by the supplier.The retailer's duty to pay and the supplier's duty to deliver constitutes ________.

Accepted Answer

A) an implied condition 
B) a condition precedent 
C) a condition subsequent 
D) concurrent conditions 
A) an implied condition 
B) a condition precedent 
C) a condition subsequent 
D) concurrent conditions

Question 6

A(n)________ is an original creditor who becomes a beneficiary under the debtor's new contract with another party.

Accepted Answer

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

Question 7

Kimlon Informatics has to recover $5000 from a client for its services.The recovery period is 100 days but Kimlon needs the money immediately.It sells the right of collecting money from its client to Quikcollect,a collection agency.Here,Kimlon Informatics is the ________.

Accepted Answer

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

Question 8

Under the possession of tangible token rule,the first assignee who receives delivery of the tangible token prevails over subsequent assignees.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is used to resolve a case where the obligee fraudulently makes successive assignments of the same right to a number of assignees?

Accepted Answer

A) the English rule 
B) an approval clause 
C) an anti-assignment clause 
D) a novation agreement 
A) the English rule 
B) an approval clause 
C) an anti-assignment clause 
D) a novation agreement

Question 10

A(n)________ is used if the obligor does not want to deal with or render performance to an unknown third party.

Accepted Answer

A) anti-assignment clause 
B) approval clause 
C) novation agreement 
D) anti-delegation clause 
A) anti-assignment clause 
B) approval clause 
C) novation agreement 
D) anti-delegation clause

Question 11

Which of the following is true of discharge of performance by agreement?

Accepted Answer

A) A partially executed contract cannot be rescinded. 
B) Mutual rescission requires parties to enter into a second agreement that expressly terminates the first one. 
C) A party is allowed to rescind a contract without the consent of the other party. 
D) Unilateral rescission is not regarded as breach of contract. 
A) A partially executed contract cannot be rescinded. 
B) Mutual rescission requires parties to enter into a second agreement that expressly terminates the first one. 
C) A party is allowed to rescind a contract without the consent of the other party. 
D) Unilateral rescission is not regarded as breach of contract.

Question 12

A legal right that arises out of a breach of contract is ________.

Accepted Answer

A) assignable 
B) not assignable 
C) subject to approval clause 
D) considered a future right 
A) assignable 
B) not assignable 
C) subject to approval clause 
D) considered a future right

Question 13

Which of the following refers to an agreement that substitutes a new party for one of the original contracting parties and relieves the existing party of liability on the contract?

Accepted Answer

A) novation 
B) substituted contract 
C) mutual rescission 
D) accord 
A) novation 
B) substituted contract 
C) mutual rescission 
D) accord

Question 14

Who should provide a notice of assignment to the obligor?

Accepted Answer

A) An assignee 
B) An assignor 
C) An obligee 
D) A facilitator 
A) An assignee 
B) An assignor 
C) An obligee 
D) A facilitator

Question 15

The American rule provides that the first assignment in time prevails,regardless of notice.

Accepted Answer

A) True 
 B)False

Question 16

Unilateral rescission of a contract constitutes a breach of that contract.

Accepted Answer

A) True 
 B)False

Question 17

A reasonable person test is a subjective test that applies to contracts involving personal taste and comfort.

Accepted Answer

A) True 
 B)False

Question 18

Condition precedent 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) True 
 B)False

Question 19

The injured party loses the right to sue if the lawsuit is not brought within the ________.

Accepted Answer

A) privity of contract 
B) notice of assignment 
C) future right 
D) statute of limitations 
A) privity of contract 
B) notice of assignment 
C) future right 
D) statute of limitations

Question 20

Which of the following is an illustration of the possession of tangible token rule?

Accepted Answer

A) An obligee who is owed $10,000 assigns the right of collecting $5,000 each to two assignees. 
B) The right of collecting $10,000 is recorded in the assignee's savings account passbook. 
C) The assignee can re-assign the right only to a subassignee selected by the obligee. 
D) An obligee cannot assign a right to collection more than once. 
A) An obligee who is owed $10,000 assigns the right of collecting $5,000 each to two assignees. 
B) The right of collecting $10,000 is recorded in the assignee's savings account passbook. 
C) The assignee can re-assign the right only to a subassignee selected by the obligee. 
D) An obligee cannot assign a right to collection more than once.

Exam 15: Third-Party Rights and Discharge

What happens when an obligor does not get a notice of assignment?

Ellen,who has a good driving record,purchases automobile insurance from an insurance company.Ellen cannot assign her rights to be insured to another driver for which of the following reasons?

Nonperformance of a covenant is not considered a breach of contract because a covenant is an unconditional promise.

In a concurrent condition,each party's duty to perform is conditioned on the other party's duty to perform.

A contract between a retailer and a supplier provides that payment is due upon delivery of goods by the supplier.The retailer's duty to pay and the supplier's duty to deliver constitutes ________.

A(n)________ is an original creditor who becomes a beneficiary under the debtor's new contract with another party.

Kimlon Informatics has to recover $5000 from a client for its services.The recovery period is 100 days but Kimlon needs the money immediately.It sells the right of collecting money from its client to Quikcollect,a collection agency.Here,Kimlon Informatics is the ________.

Under the possession of tangible token rule,the first assignee who receives delivery of the tangible token prevails over subsequent assignees.

Which of the following is used to resolve a case where the obligee fraudulently makes successive assignments of the same right to a number of assignees?

A(n)________ is used if the obligor does not want to deal with or render performance to an unknown third party.

Which of the following is true of discharge of performance by agreement?

A legal right that arises out of a breach of contract is ________.

Which of the following refers to an agreement that substitutes a new party for one of the original contracting parties and relieves the existing party of liability on the contract?

Who should provide a notice of assignment to the obligor?

The American rule provides that the first assignment in time prevails,regardless of notice.

Unilateral rescission of a contract constitutes a breach of that contract.

A reasonable person test is a subjective test that applies to contracts involving personal taste and comfort.

Condition precedent refers to a condition that requires the occurrence of an event before a party is obligated to perform a duty under a contract.

The injured party loses the right to sue if the lawsuit is not brought within the ________.

Which of the following is an illustration of the possession of tangible token rule?

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