Question 1

A third party is categorized as a donee beneficiary when:

Accepted Answer

A) the promisee's primary purpose in contracting is to make a gift of the agreed-on performance to the third party. 
B) the benefit derived by the third party was merely an unintended by-product of a contract that was created for the benefit of those who were parties to it. 
C) he/she is unable to establish that the contract was made with the intent to benefit him/her. 
D) the promisor's performance is intended to satisfy a legal duty that the promisee owes to the third party. 
A) the promisee's primary purpose in contracting is to make a gift of the agreed-on performance to the third party. 
B) the benefit derived by the third party was merely an unintended by-product of a contract that was created for the benefit of those who were parties to it. 
C) he/she is unable to establish that the contract was made with the intent to benefit him/her. 
D) the promisor's performance is intended to satisfy a legal duty that the promisee owes to the third party.

Question 2

Which of the following characterizes assignability?

Accepted Answer

A) An assignment is ineffective if it occurs in the present. 
B) Assignment is ineffective in the case of land rights. 
C) Assignment is ineffective when contrary to public policy. 
D) Assignment is mostly effective in the case of wage earners. 
A) An assignment is ineffective if it occurs in the present. 
B) Assignment is ineffective in the case of land rights. 
C) Assignment is ineffective when contrary to public policy. 
D) Assignment is mostly effective in the case of wage earners.

Question 3

The Uniform Commercial Code states that a party to a contract may delegate his duty to perform unless the other party has a substantial interest in having the original obligor perform the acts required by the contract.Which of the following is not considered in determining whether there is a substantial interest?

Accepted Answer

A) The degree to which performance is dependent on the reputation of the person who owes the duty to perform. 
B) The degree to which performance is dependent on the individual traits of the person who owes the duty to perform. 
C) The degree to which performance is dependent on the skill of the person who owes the duty to perform. 
D) The degree to which performance is dependent on the judgment of the person who owes the duty to perform. 
A) The degree to which performance is dependent on the reputation of the person who owes the duty to perform. 
B) The degree to which performance is dependent on the individual traits of the person who owes the duty to perform. 
C) The degree to which performance is dependent on the skill of the person who owes the duty to perform. 
D) The degree to which performance is dependent on the judgment of the person who owes the duty to perform.

Question 4

Rice contracted with Locke to build an oil refinery for Locke.The contract provided that Rice was to use United Pipe Fittings.Rice did not do so.United learned of the contract and,anticipating the order,manufactured additional fittings.United sued Locke and Rice.United is:

Accepted Answer

A) entitled to recover from Rice only,because Rice breached the contract. 
B) entitled to recover from either Locke or Rice because it detrimentally relied on the contract. 
C) not entitled to recover because it is a donee beneficiary. 
D) not entitled to recover because it is an incidental beneficiary. 
A) entitled to recover from Rice only,because Rice breached the contract. 
B) entitled to recover from either Locke or Rice because it detrimentally relied on the contract. 
C) not entitled to recover because it is a donee beneficiary. 
D) not entitled to recover because it is an incidental beneficiary.

Question 5

The appointment of another person to perform a duty under a contract is called a(n):

Accepted Answer

A) assignment. 
B) delegation. 
C) affidavit. 
D) bilateral contract. 
A) assignment. 
B) delegation. 
C) affidavit. 
D) bilateral contract.

Question 6

For an assignment to be valid,the assignee must give some consideration to the assignor.

Accepted Answer

A) True 
 B)False

Question 7

Josh acquires beneficiary rights under a contract between Sunny and James.Any modification to that contract which discharges Josh of his rights under the contract will not be enforceable by the court.

Accepted Answer

A) True 
 B)False

Question 8

For a third person to have the right to enforce a contract,he/she must necessarily prove that:

Accepted Answer

A) he/she was the party to the contract. 
B) he/she had been given a promise. 
C) the contract was made to benefit him. 
D) the contract provides him/her incidental benefit. 
A) he/she was the party to the contract. 
B) he/she had been given a promise. 
C) the contract was made to benefit him. 
D) the contract provides him/her incidental benefit.

Question 9

Mr.Green contracts with Mr.Brown for $500 to landscape the home of Roy,who is Mr.Green's son.What is Roy's status in the contract with Mr.Green and Mr.Brown?

Accepted Answer

A) Donee beneficiary 
B) Incidental beneficiary 
C) Corporate beneficiary 
D) International beneficiary 
A) Donee beneficiary 
B) Incidental beneficiary 
C) Corporate beneficiary 
D) International beneficiary

Question 10

A valid assignment always requires:

Accepted Answer

A) consideration. 
B) writing. 
C) filing with a local court. 
D) an intention to assign. 
A) consideration. 
B) writing. 
C) filing with a local court. 
D) an intention to assign.

Question 11

Al hires Bob to move his furniture to his new house.On the day of the move,Bob does not feel like moving furniture,so he asks his friend Chuck to move the furniture.Chuck decides to leave before completing the move in order to watch a football game on TV.Al has to delay his move and hire another mover at a higher price.Al wants to sue Bob to recover for his damages.Given these facts,Al will most likely:

Accepted Answer

A) lose,because it was Chuck,not Bob,who failed to fulfill his duty to Al. 
B) win,because Bob's duty to Al was not delegable. 
C) win,because Bob is liable to Al. 
D) lose,because he failed to insist on Bob's performance. 
A) lose,because it was Chuck,not Bob,who failed to fulfill his duty to Al. 
B) win,because Bob's duty to Al was not delegable. 
C) win,because Bob is liable to Al. 
D) lose,because he failed to insist on Bob's performance.

Question 12

If a contract is breached,the donee beneficiary will only have a cause of action against the:

Accepted Answer

A) promisee. 
B) donor. 
C) breaching party. 
D) promisor. 
A) promisee. 
B) donor. 
C) breaching party. 
D) promisor.

Question 13

Which of the following statements about delegable duties is false?

Accepted Answer

A) A duty that can be performed fully by a number of different persons is delegable. 
B) The Uniform Commercial Code allows delegation unless the parties agreed to the contrary. 
C) Delegations are always enforceable,even if they violate public policy. 
D) The Uniform Commercial Code allows delegation unless the other party has a substantial interest in having the original obligor perform. 
A) A duty that can be performed fully by a number of different persons is delegable. 
B) The Uniform Commercial Code allows delegation unless the parties agreed to the contrary. 
C) Delegations are always enforceable,even if they violate public policy. 
D) The Uniform Commercial Code allows delegation unless the other party has a substantial interest in having the original obligor perform.

Question 14

An obligor:

Accepted Answer

A) owes a duty to perform under a contract. 
B) is owed a duty. 
C) is one to whom a right has been transferred. 
D) facilitates a contract. 
A) owes a duty to perform under a contract. 
B) is owed a duty. 
C) is one to whom a right has been transferred. 
D) facilitates a contract.

Question 15

Courts have held that a beneficiary's rights cannot be lost by modification or discharge.This is known as:

Accepted Answer

A) assignment. 
B) dissociation. 
C) malfeasance. 
D) vesting. 
A) assignment. 
B) dissociation. 
C) malfeasance. 
D) vesting.

Question 16

An assignee can notify the obligor of the assignment whenever he/she desires.

Accepted Answer

A) True 
 B)False

Question 17

Which section of the Uniform Commercial Code (UCC)indicates that it is presumed that an assignment includes a delegation under contract law?

Accepted Answer

A) 2-210 
B) 1-104 
C) 7-344 
D) 2-114 
A) 2-210 
B) 1-104 
C) 7-344 
D) 2-114

Question 18

Mr.Blue is in a contract with Mr.Brown for the repair of Mr.Blue's roof for $9,000.Mr.Brown has already performed the work,but contacts Mr.Blue that he should pay his cousin Joe Jr.the amount owed.Joe Jr.'s status under the contract is called what?

Accepted Answer

A) Delegation 
B) Assignment 
C) Incorporation 
D) Organizing 
A) Delegation 
B) Assignment 
C) Incorporation 
D) Organizing

Question 19

Jada owned an insurance policy on her life,on which she paid all the premiums.Shaun was named the beneficiary.Jada died and the insurance company refused to pay the insurance proceeds to Shaun.An action by Shaun against the insurance company for the insurance proceeds will be:

Accepted Answer

A) successful because Shaun is a third-party donee beneficiary. 
B) successful because Shaun is a proper assignee of Jada's rights. 
C) unsuccessful because Shaun is not the owner of the policy. 
D) unsuccessful because Shaun did not pay any of the premiums. 
A) successful because Shaun is a third-party donee beneficiary. 
B) successful because Shaun is a proper assignee of Jada's rights. 
C) unsuccessful because Shaun is not the owner of the policy. 
D) unsuccessful because Shaun did not pay any of the premiums.

Question 20

Which of the following is true of delegation?

Accepted Answer

A) It requires special,formal language. 
B) It covers all duties stated in a contract. 
C) It is often confused with assignment. 
D) It automatically places all legal responsibilities on the delegatee. 
A) It requires special,formal language. 
B) It covers all duties stated in a contract. 
C) It is often confused with assignment. 
D) It automatically places all legal responsibilities on the delegatee.

Exam 17: Rights of Third Parties

A third party is categorized as a donee beneficiary when:

Which of the following characterizes assignability?

Rice contracted with Locke to build an oil refinery for Locke.The contract provided that Rice was to use United Pipe Fittings.Rice did not do so.United learned of the contract and,anticipating the order,manufactured additional fittings.United sued Locke and Rice.United is:

The appointment of another person to perform a duty under a contract is called a(n):

For an assignment to be valid,the assignee must give some consideration to the assignor.

Josh acquires beneficiary rights under a contract between Sunny and James.Any modification to that contract which discharges Josh of his rights under the contract will not be enforceable by the court.

For a third person to have the right to enforce a contract,he/she must necessarily prove that:

Mr.Green contracts with Mr.Brown for $500 to landscape the home of Roy,who is Mr.Green's son.What is Roy's status in the contract with Mr.Green and Mr.Brown?

A valid assignment always requires:

If a contract is breached,the donee beneficiary will only have a cause of action against the:

Which of the following statements about delegable duties is false?

An obligor:

Courts have held that a beneficiary's rights cannot be lost by modification or discharge.This is known as:

An assignee can notify the obligor of the assignment whenever he/she desires.

Which section of the Uniform Commercial Code (UCC)indicates that it is presumed that an assignment includes a delegation under contract law?

Mr.Blue is in a contract with Mr.Brown for the repair of Mr.Blue's roof for $9,000.Mr.Brown has already performed the work,but contacts Mr.Blue that he should pay his cousin Joe Jr.the amount owed.Joe Jr.'s status under the contract is called what?

Jada owned an insurance policy on her life,on which she paid all the premiums.Shaun was named the beneficiary.Jada died and the insurance company refused to pay the insurance proceeds to Shaun.An action by Shaun against the insurance company for the insurance proceeds will be:

Which of the following is true of delegation?

The Nature of Law

The Resolution of Private Disputes

Business and the Constitution

Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Criminal Law and Procedure

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Unfair Competition

Introduction to Contracts

The Agreement: Offer

The Agreement: Acceptance

Consideration

Reality of Consent

Capacity to Contract

Illegality

Writing

Performance and Remedies

Formation and Terms of Sales Contracts

Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contracts

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance Law

Introduction to Credit and Secured Transactions

Security Interests in Personal Property

Bankruptcy

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Transfers

The Agency Relationship

Third-Party Relations of the Principal and the Agent

Introduction to Forms of Business and Formation of Partnerships

Operation of Partnerships and Related Forms

Partners Dissociation and Partnerships Dissolution and Winding up

Limited Liability Companies, limited Partnerships, and Limited Liability Limited Partnerships

History and Nature of Corporations

Organization and Financial Structure of Corporations

Management of Corporations

Shareholders Rights and Liabilities

Securities Regulation

Legal and Professional Responsibilities of Auditors, Consultants, and Securities Professionals

Administrative Law

The Federal Trade Commission Act and Consumer Protection Laws

Antitrust: the Sherman Act

The Clayton Act, the Robinsonpatman Act, and Antitrust Exemptions and Immunities

Employment Law

Environmental Regulation

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