Question 1

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 men. 
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 men. 
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 2

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 3

Anita owes Brad $75,000.Brad signs a written statement granting Carl a gratuitous assignment of his rights from Anita.If Brad delivers the signed statement to Carl before he dies:

Accepted Answer

A) the delivery of the statement makes the assignment irrevocable. 
B) the assignment is terminated upon Brad's death. 
C) the signing of the statement makes the assignment irrevocable. 
D) the assignment is invalid, because it is revocable. 
A) the delivery of the statement makes the assignment irrevocable. 
B) the assignment is terminated upon Brad's death. 
C) the signing of the statement makes the assignment irrevocable. 
D) the assignment is invalid, because it is revocable.

Question 4

A party delegating his duty to a third party is known as a delegator.

Accepted Answer

A) True 
 B)False

Question 5

Professor Doright has a life insurance policy on his own life that provides that in the event of his death, his mother will receive the proceeds.Professor Doright's mother 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 6

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 7

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

Accepted Answer

A) True 
 B)False

Question 8

In a third-party beneficiary contract, the third party's rights arise after the original contract is formed.

Accepted Answer

A) True 
 B)False

Question 9

The privilege to play tennis and socialize at the Capital City Country Club (CCCC) is obtained through application, references, resumes, and fees.Steven and Chanel want to assign the remaining 4 years of their 5-year membership to Charles and Prissy so that Steven and Chanel may join the posh Silver Hawk Tennis and Polo Club.CCCC sues to enjoin Steven and Chanel from assigning their membership.CCCC will probably:

Accepted Answer

A) not prevail because all contract rights are assignable. 
B) prevail because the parties intended the contract to be personal and non-assignable. 
C) not prevail because the membership contract constitutes a lease. 
D) None of the above. 
A) not prevail because all contract rights are assignable. 
B) prevail because the parties intended the contract to be personal and non-assignable. 
C) not prevail because the membership contract constitutes a lease. 
D) None of the above.

Question 10

An implied warranty is an obligation imposed by law upon the transferor of property or contract rights.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is NOT true concerning the requirements for an effective assignment?

Accepted Answer

A) The assignment must be voluntary. 
B) Consideration is required. 
C) There must be an intention to make the assignee the owner of the right. 
D) The assignment may be either written or oral. 
A) The assignment must be voluntary. 
B) Consideration is required. 
C) There must be an intention to make the assignee the owner of the right. 
D) The assignment may be either written or oral.

Question 12

A person who owes a duty under a contract is an obligee.

Accepted Answer

A) True 
 B)False

Question 13

An incidental beneficiary has a right to enforce a contract.

Accepted Answer

A) True 
 B)False

Question 14

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 15

Courts will enforce contracts for the benefit of all but which of the following?

Accepted Answer

A) Donee beneficiaries. 
B) Creditor beneficiaries. 
C) Incidental beneficiaries. 
D) Intended beneficiaries. 
A) Donee beneficiaries. 
B) Creditor beneficiaries. 
C) Incidental beneficiaries. 
D) Intended beneficiaries.

Question 16

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

Accepted Answer

A) When the delegatee assumes the delegated duty, both the delegator and the delegatee are liable for performance of the contractual duty to the obligee. 
B) Contractual duties are generally delegable. 
C) The courts will examine an assignment more closely than a delegation. 
D) A delegation will not be permitted if the nature of the duties are personal in that the obligee has a substantial interest in having the delegator perform the contract. 
A) When the delegatee assumes the delegated duty, both the delegator and the delegatee are liable for performance of the contractual duty to the obligee. 
B) Contractual duties are generally delegable. 
C) The courts will examine an assignment more closely than a delegation. 
D) A delegation will not be permitted if the nature of the duties are personal in that the obligee has a substantial interest in having the delegator perform the contract.

Question 17

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 18

Name four types of contract rights that are non-assignable.

Accepted Answer

Non-assignable contract rights include t

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

The general rule is that an assignee stands in the shoes of the assignor.He acquires the rights of the assignor but acquires no new or additional rights.

Accepted Answer

A) True 
 B)False

Exam 16: Third Parties to Contracts

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

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.

Anita owes Brad $75,000.Brad signs a written statement granting Carl a gratuitous assignment of his rights from Anita.If Brad delivers the signed statement to Carl before he dies:

A party delegating his duty to a third party is known as a delegator.

Professor Doright has a life insurance policy on his own life that provides that in the event of his death, his mother will receive the proceeds.Professor Doright's mother is a(n):

Which of the following duties would not be delegable?

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

In a third-party beneficiary contract, the third party's rights arise after the original contract is formed.

An implied warranty is an obligation imposed by law upon the transferor of property or contract rights.

Which of the following is NOT true concerning the requirements for an effective assignment?

A person who owes a duty under a contract is an obligee.

An incidental beneficiary has a right to enforce a contract.

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

Courts will enforce contracts for the benefit of all but which of the following?

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

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.

Name four types of contract rights that are non-assignable.

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

The general rule is that an assignee stands in the shoes of the assignor.He acquires the rights of the assignor but acquires no new or additional rights.

Introduction to Law

Business Ethics

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Performance, Breach, and Discharge

Contract Remedies

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer

Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

Formation and Internal Relations of General Partnerships

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Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

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Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

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