Question 1

Briefly discuss the enforceability of contracts by third parties.

Accepted Answer

Contracts can be enforced by third parti

Question 2

Lincoln has a $100,000 life insurance policy and names his daughter Venus as the beneficiary.When Lincoln dies,the insurance company refuses to pay Venus the $100,000.Can she sue them to recover the money?

Accepted Answer

A) No,because she is the promisor. 
B) Yes,because she is an intended beneficiary. 
C) Yes,because she is the assignee. 
D) No,because incidental beneficiaries cannot enforce contracts. 
A) No,because she is the promisor. 
B) Yes,because she is an intended beneficiary. 
C) Yes,because she is the assignee. 
D) No,because incidental beneficiaries cannot enforce contracts.

Question 3

An assignment for consideration is irrevocable.

Accepted Answer

A) True 
 B)False

Question 4

Cheryl enters into a contract with Gabe.In this contract,Cheryl asks Gabe to pay the money he owes her from the contract to her friend Leah because Leah is having financial troubles.Leah is

Accepted Answer

A) a third party creditor beneficiary. 
B) a third party donee beneficiary. 
C) a third party incidental beneficiary. 
D) the promisee in the contract. 
A) a third party creditor beneficiary. 
B) a third party donee beneficiary. 
C) a third party incidental beneficiary. 
D) the promisee in the contract.

Question 5

Discuss the potential liability differences between a delegation and a novation.

Accepted Answer

When an obligor delegates duties under a

Question 6

Claims for personal injury are generally assignable.

Accepted Answer

A) True 
 B)False

Question 7

If Casey assigns her rights to receive income from rental property to Errol,then Errol will legally acquire any rights to the income held by Casey.

Accepted Answer

A) True 
 B)False

Question 8

Most,but not all,contract rights are assignable.

Accepted Answer

A) True 
 B)False

Question 9

Harris,who owes Nathan $4,000,sells Bethany a used car for $5,000,payable in 30 days.Harris immediately tells Nathan that she doesn't have the money she owes him,but she is willing to give him her claim to Bethany's $5,000.Nathan agrees and gives up his claim against Harris for $4,000,and Harris notifies Bethany of the assignment.In this case,Bethany is best described as the

Accepted Answer

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

Question 10

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

Accepted Answer

A) about the same legal rights. 
B) substantially greater legal rights. 
C) substantially fewer legal rights. 
D) virtually no legal rights. 
A) about the same legal rights. 
B) substantially greater legal rights. 
C) substantially fewer legal rights. 
D) virtually no legal rights.

Question 11

Once a duty is delegated,it relieves the delegator of his or her own liability to perform the contract.

Accepted Answer

A) True 
 B)False

Question 12

Char-Glo Industries contracted with Evergreen Lawn Service to mow and trim the company's lawn.In the contract,Char-Glo included a clause prohibiting Evergreen from delegating its duties.Courts will ordinarily not enforce such a clause.

Accepted Answer

A) True 
 B)False

Question 13

Brandon orally assigned his right to $100 from a lawn mowing contract to Will as a gift.This assignment is

Accepted Answer

A) not valid because it was not in writing. 
B) valid even though it was oral and there was no consideration from Will. 
C) irrevocable once Brandon has told Will about the gift. 
D) not valid because Will gave no consideration for the assignment. 
A) not valid because it was not in writing. 
B) valid even though it was oral and there was no consideration from Will. 
C) irrevocable once Brandon has told Will about the gift. 
D) not valid because Will gave no consideration for the assignment.

Question 14

Which statement regarding assignment is accurate?

Accepted Answer

A) Gratuitous assignments are generally revocable regardless of whether they are oral or written. 
B) An assignment for consideration is irrevocable. 
C) An assignment becomes valid when the obligor receives notice of the assignment. 
D) An assignment must be written and follow all legal formalities. 
A) Gratuitous assignments are generally revocable regardless of whether they are oral or written. 
B) An assignment for consideration is irrevocable. 
C) An assignment becomes valid when the obligor receives notice of the assignment. 
D) An assignment must be written and follow all legal formalities.

Question 15

Jerry purchased a laptop computer for his personal use from Computer City on an installment loan contract.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.

Accepted Answer

A) This is a valid waiver of defense clause.Jerry signed the contract,so he can't raise a defense to Finance USA. 
B) Finance USA is an intended third party beneficiary and may therefore enforce the contract. 
C) In general,this type of waiver is not permitted in consumer contracts,so Jerry can raise his claim against Finance USA. 
D) This is a delegation of Jerry's duties and the delegator remains liable on the contract unless a novation agreement is made. 
A) This is a valid waiver of defense clause.Jerry signed the contract,so he can't raise a defense to Finance USA. 
B) Finance USA is an intended third party beneficiary and may therefore enforce the contract. 
C) In general,this type of waiver is not permitted in consumer contracts,so Jerry can raise his claim against Finance USA. 
D) This is a delegation of Jerry's duties and the delegator remains liable on the contract unless a novation agreement is made.

Question 16

Which of the following duties can probably be delegated?

Accepted Answer

A) an agreement to perform an operation 
B) a contract to paint a picture 
C) an agreement by an attorney to draft a contract 
D) an agreement to paint a house 
A) an agreement to perform an operation 
B) a contract to paint a picture 
C) an agreement by an attorney to draft a contract 
D) an agreement to paint a house

Question 17

Kirk purchases a sailboat on credit from Lakefront Sales,and Lakefront keeps a security interest in the boat.Lakefront then assigns the security interest to First Finance Co.Explain what having a security interest means.Under the UCC,what defenses can Kirk assert against First Finance?

Accepted Answer

A security interest is a legal right in

Question 18

Johann,a well-known musician,agrees to give ten guitar lessons to Elton for $2,000.Nothing in the contract itself prohibits a delegation.If Johann delegates his obligation to Eugene,a second-year musical student and enthusiastic guitar player,then the delegation will probably be

Accepted Answer

A) permitted because contracts may be freely delegated. 
B) permitted because the contract is just for music lessons. 
C) prohibited because the contract is for service from a specific person. 
D) prohibited by the UCC because this is a sale of services. 
A) permitted because contracts may be freely delegated. 
B) permitted because the contract is just for music lessons. 
C) prohibited because the contract is for service from a specific person. 
D) prohibited by the UCC because this is a sale of services.

Question 19

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

Accepted Answer

A) can sue Bob and Carol only. 
B) can sue Ted and Alice only. 
C) can sue Bob,Carol,Ted,and Alice. 
D) cannot sue anyone but can repossess the RV. 
A) can sue Bob and Carol only. 
B) can sue Ted and Alice only. 
C) can sue Bob,Carol,Ted,and Alice. 
D) cannot sue anyone but can repossess the RV.

Question 20

An assignment is valid from the moment it is made,regardless of whether the assignor notifies the obligor.

Accepted Answer

A) True 
 B)False

Exam 17: Third Parties

Briefly discuss the enforceability of contracts by third parties.

Lincoln has a $100,000 life insurance policy and names his daughter Venus as the beneficiary.When Lincoln dies,the insurance company refuses to pay Venus the $100,000.Can she sue them to recover the money?

An assignment for consideration is irrevocable.

Cheryl enters into a contract with Gabe.In this contract,Cheryl asks Gabe to pay the money he owes her from the contract to her friend Leah because Leah is having financial troubles.Leah is

Discuss the potential liability differences between a delegation and a novation.

Claims for personal injury are generally assignable.

If Casey assigns her rights to receive income from rental property to Errol,then Errol will legally acquire any rights to the income held by Casey.

Most,but not all,contract rights are assignable.

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

Once a duty is delegated,it relieves the delegator of his or her own liability to perform the contract.

Char-Glo Industries contracted with Evergreen Lawn Service to mow and trim the company's lawn.In the contract,Char-Glo included a clause prohibiting Evergreen from delegating its duties.Courts will ordinarily not enforce such a clause.

Brandon orally assigned his right to $100 from a lawn mowing contract to Will as a gift.This assignment is

Which statement regarding assignment is accurate?

Which of the following duties can probably be delegated?

Kirk purchases a sailboat on credit from Lakefront Sales,and Lakefront keeps a security interest in the boat.Lakefront then assigns the security interest to First Finance Co.Explain what having a security interest means.Under the UCC,what defenses can Kirk assert against First Finance?

Johann,a well-known musician,agrees to give ten guitar lessons to Elton for $2,000.Nothing in the contract itself prohibits a delegation.If Johann delegates his obligation to Eugene,a second-year musical student and enthusiastic guitar player,then the delegation will probably be

An assignment is valid from the moment it is made,regardless of whether the assignor notifies the obligor.

Introduction to Law

Ethics and Corporate Social Responsibility

International Law

Common Law, Statutory Law, and Administrative Law

Constitutional Law

Dispute Resolution

Crime

Intentional Torts and Business Torts

Negligence, Strict Liability, and Product Liability

Privacy and Internet Law

Introduction to Contracts

Agreement: Offers and Acceptances

Consideration

Legality

Voidable Contracts: Capacity and Consent

Written Contracts

Contract Termination

Remedies

Practical Contracts

Introduction to Sales

Ownership, Risk and Warranties

Performance and Remedies

Secured Transactions

Creating a Negotiable Instrument

Liability for Negotiable Instruments

Accountants Liability

Agency Law

Employment and Labor Law

Employment Discrimination

Starting a Business: Llcs and Other Options

Partnerships

Life and Death of a Corporation

Management Duties

Shareholder Rights

Bankruptcy

Securities Regulation

Antitrust

Consumer Protection

Environmental Law

Intellectual Property

Real Property and Landlord Tenant Law

Personal Property and Bailment

Planning for the Future: Wills, Trusts and Insurance

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