Question 1

An incidental beneficiary of a contract cannot recover under that contract.

Accepted Answer

A) True 
 B)False

Question 2

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 3

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 4

All contract rights are assignable.

Accepted Answer

A) True 
 B)False

Question 5

Under the "American rule" governing successive assignments,the first assignee in time has the superior right.

Accepted Answer

A) True 
 B)False

Question 6

Why is it important for an assignee to immediately notify the obligor of the assignment?

Accepted Answer

An assignee should promptly notify the o

Question 7

It is important to promptly notify the obligor that an assignment has occurred.Why?

Accepted Answer

A)  It is a necessary requirement for a valid assignment. 
B)  The obligor might perform to the assignor rather than the assignee. 
C)  The obligor's duty to perform is completely discharged. 
D)  If the obligor neither knew nor had reason to know about the assignment,the obligor remains liable to the assignee. 
A)  It is a necessary requirement for a valid assignment. 
B)  The obligor might perform to the assignor rather than the assignee. 
C)  The obligor's duty to perform is completely discharged. 
D)  If the obligor neither knew nor had reason to know about the assignment,the obligor remains liable to the assignee.

Question 8

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 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

In an assignment/delegation,which party remains secondarily liable on the obligation that has been delegated?

Accepted Answer

A)  Assignor/delegator 
B)  Assignee/delegatee 
C)  Third party 
D)  Obligee 
A)  Assignor/delegator 
B)  Assignee/delegatee 
C)  Third party 
D)  Obligee

Question 11

Edna is a leading brain surgeon in the United States.She enters into a contract to perform a complicated brain surgery on Ben.However,since Edna is very busy,she wants to assign this contract to a less experienced surgeon,Charles.This would be Charles's first operation of this type.Ben can object to this assignment and prevent it because the contract between Ben and Edna is a(n):

Accepted Answer

A)  contract for services to be performed in the future. 
B)  contract involving personal skill. 
C)  services contract. 
D)  employment contract. 
A)  contract for services to be performed in the future. 
B)  contract involving personal skill. 
C)  services contract. 
D)  employment contract.

Question 12

Once a party properly delegates a duty to the delegatee,that party is relieved of any obligation to perform the duty.

Accepted Answer

A) True 
 B)False

Question 13

The term for an individual outside of a contract but who is envisioned to be benefited by a contract is a third-party beneficiary.

Accepted Answer

A) True 
 B)False

Question 14

The Mandarin City contracts with the Zoid Construction Company to construct a new sewer system for the city.Later,Zoid breaches the contract.George,a resident of the city,sues Zoid for its breach of contract.Can George recover? Why or why not?

Accepted Answer

No,George cannot recover,becau

Question 15

Selena delegates her rights under a contract.The clause delegating her rights are termed: "All my rights under the contract are hereby effectively delegated to...." This language shows that the contract is of:

Accepted Answer

A)  delegation only. 
B)  assignment only. 
C)  assignment and delegation. 
D)  a third-party beneficiary. 
A)  delegation only. 
B)  assignment only. 
C)  assignment and delegation. 
D)  a third-party beneficiary.

Question 16

Unless specific language indicates otherwise then an assignment of a right will be interpreted to include a delegation of duty under a contract.

Accepted Answer

A) True 
 B)False

Question 17

The power to delegate under a contract is universal right and parties may not restrict the power to delegate in the contract.

Accepted Answer

A) True 
 B)False

Question 18

On August 1,Neptune Fisheries contracted in writing with West Markets to deliver to West 3,000 pounds of lobsters at $4 a pound.Delivery of the lobsters was due October 1 with payment due November 1.On August 4,Neptune entered into a contract with Deep Sea Lobster Farms which provided as follows: "Neptune Fisheries assigns all the rights under the contract with West Markets dated August 1 to Deep Sea Lobster Farms." The best interpretation of the August 4 contract would be that it was:

Accepted Answer

A)  only an assignment of rights by Neptune. 
B)  only a delegation of duties by Neptune. 
C)  an assignment of rights and a delegation of duties by Neptune. 
D)  an unenforceable third-party beneficiary contract. 
A)  only an assignment of rights by Neptune. 
B)  only a delegation of duties by Neptune. 
C)  an assignment of rights and a delegation of duties by Neptune. 
D)  an unenforceable third-party beneficiary contract.

Question 19

Which of the following is NOT one of the implied warranties that the assignor gives to the assignee?

Accepted Answer

A)  That the obligor has capacity to contract. 
B)  That the contract is not voidable for any reason known to the assignor. 
C)  That the assignor has good title to the rights assigned. 
D)  That the obligor is solvent. 
A)  That the obligor has capacity to contract. 
B)  That the contract is not voidable for any reason known to the assignor. 
C)  That the assignor has good title to the rights assigned. 
D)  That the obligor is solvent.

Question 20

A delegator can be discharged from his/her obligation to perform his/her duty to the original promisee by a contract of novation.

Accepted Answer

A) True 
 B)False

Exam 17: Rights of Third Parties

An incidental beneficiary of a contract cannot recover under that contract.

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

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:

All contract rights are assignable.

Under the "American rule" governing successive assignments,the first assignee in time has the superior right.

Why is it important for an assignee to immediately notify the obligor of the assignment?

It is important to promptly notify the obligor that an assignment has occurred.Why?

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.

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?

In an assignment/delegation,which party remains secondarily liable on the obligation that has been delegated?

Once a party properly delegates a duty to the delegatee,that party is relieved of any obligation to perform the duty.

The term for an individual outside of a contract but who is envisioned to be benefited by a contract is a third-party beneficiary.

The Mandarin City contracts with the Zoid Construction Company to construct a new sewer system for the city.Later,Zoid breaches the contract.George,a resident of the city,sues Zoid for its breach of contract.Can George recover? Why or why not?

Selena delegates her rights under a contract.The clause delegating her rights are termed: "All my rights under the contract are hereby effectively delegated to...." This language shows that the contract is of:

Unless specific language indicates otherwise then an assignment of a right will be interpreted to include a delegation of duty under a contract.

The power to delegate under a contract is universal right and parties may not restrict the power to delegate in the contract.

Which of the following is NOT one of the implied warranties that the assignor gives to the assignee?

A delegator can be discharged from his/her obligation to perform his/her duty to the original promisee by a contract of novation.

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 Robinson-Patman Act, and Antitrust Exemptions and Immunities

Employment Law

Environmental Regulation

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