Question 1

A person who is not a party to a contract but is intended by the contracting parties to benefit as a consequence of a contract is termed a(n):

Accepted Answer

A)  third party beneficiary. 
B)  incidental beneficiary. 
C)  official receiver. 
D)  arbitrator. 
A)  third party beneficiary. 
B)  incidental beneficiary. 
C)  official receiver. 
D)  arbitrator. A

Question 2

The Uniform Commercial Code (UCC)states,"No delegation of performance relieves the party delegating of any duty to perform or any liability for breach" under:

Accepted Answer

A)  UCC 1-210. 
B)  UCC 2-210. 
C)  UCC 3-210. 
D)  UCC 4-210. 
A)  UCC 1-210. 
B)  UCC 2-210. 
C)  UCC 3-210. 
D)  UCC 4-210. B

Question 3

Even employment contracts may be assigned if there is no relationship of trust or confidence,or any other circumstance that would create a materially greater burden on the party whose services are being assigned.

Accepted Answer

A) True 
 B)False  True

Question 4

In a private-service contract,the party who hires the specific person to perform certain duties has a(n)____________interest in having only the hired person perform.

Accepted Answer

A)  substantial 
B)  implied 
C)  explicit 
D)  reasonable 
A)  substantial 
B)  implied 
C)  explicit 
D)  reasonable

Question 5

Person A was contracted by Person B to build a beach house.Soon after,Person A was unable to complete the entire house,and hence assigned Person C to complete the contract,after seeking Person B's approval.In this example,the obligation of Person A is discharged and this is a:

Accepted Answer

A)  novation of contract. 
B)  contingent contract. 
C)  specialty contract. 
D)  contract of records. 
A)  novation of contract. 
B)  contingent contract. 
C)  specialty contract. 
D)  contract of records.

Question 6

Rights or duties under a contract may be assigned by a court of law when a contracting party:

Accepted Answer

A)  earns profits. 
B)  incurs losses. 
C)  opens new business. 
D)  dies or becomes bankrupt. 
A)  earns profits. 
B)  incurs losses. 
C)  opens new business. 
D)  dies or becomes bankrupt.

Question 7

For personal service contracts,parties may transfer their rights but never their duties.

Accepted Answer

A) True 
 B)False

Question 8

When all parties to a contract agree to a significant change in the contract,the change is called a(n):

Accepted Answer

A)  assignment. 
B)  delegation. 
C)  execution. 
D)  novation. 
A)  assignment. 
B)  delegation. 
C)  execution. 
D)  novation.

Question 9

The person who transfers his or her rights is known as the assignor; the third party to whom the rights are transferred is known as the assignee.

Accepted Answer

A) True 
 B)False

Question 10

The beneficiary named in the insurance policy is legally a(n):

Accepted Answer

A)  substantial beneficiary. 
B)  material beneficiary. 
C)  incidental beneficiary. 
D)  third-party beneficiary. 
A)  substantial beneficiary. 
B)  material beneficiary. 
C)  incidental beneficiary. 
D)  third-party beneficiary.

Question 11

An incidental beneficiary is one who may benefit as an indirect consequence of a contract,although that was not the intent of the:

Accepted Answer

A)  administrator. 
B)  contracting parties. 
C)  assignor. 
D)  deceased party. 
A)  administrator. 
B)  contracting parties. 
C)  assignor. 
D)  deceased party.

Question 12

An incidental beneficiary is one who may benefit as a direct consequence of contract.

Accepted Answer

A) True 
 B)False

Question 13

A party's rights in a contract can be assigned to another party; and also a party's duties are transferred to a third party if the duties do not involve:

Accepted Answer

A)  charity. 
B)  royalty. 
C)  goodwill. 
D)  unique skills or abilities. 
A)  charity. 
B)  royalty. 
C)  goodwill. 
D)  unique skills or abilities.

Question 14

Personal-service contracts may be assigned.

Accepted Answer

A) True 
 B)False

Question 15

The burden of investigating claims of assignment falls on the party notified of the:

Accepted Answer

A)  assignment. 
B)  delegation. 
C)  execution. 
D)  rescission. 
A)  assignment. 
B)  delegation. 
C)  execution. 
D)  rescission.

Question 16

A party to a contract will not be obligated by an assignment made by the other party without his or her knowledge until:

Accepted Answer

A)  recorded. 
B)  stamped. 
C)  notified. 
D)  rejected. 
A)  recorded. 
B)  stamped. 
C)  notified. 
D)  rejected.

Question 17

A third-party beneficiary to a contract has no legal right to the benefits resulting from the contract.

Accepted Answer

A) True 
 B)False

Question 18

Third parties to a contract are those who are not a party to the contract but who:

Accepted Answer

A)  are witnesses to a contract. 
B)  are affected by it. 
C)  are part of a contract of three persons. 
D)  always have rights under the contract. 
A)  are witnesses to a contract. 
B)  are affected by it. 
C)  are part of a contract of three persons. 
D)  always have rights under the contract.

Question 19

Personal service contracts are automatically assigned at the time of death.

Accepted Answer

A) True 
 B)False

Question 20

Athletes are hired because of their special personal skills; because of this,their services under a contract:

Accepted Answer

A)  may not be delegated. 
B)  may be delegated. 
C)  may not be assigned. 
D)  may be assigned. 
A)  may not be delegated. 
B)  may be delegated. 
C)  may not be assigned. 
D)  may be assigned.

Exam 14: Operation of Contracts

A person who is not a party to a contract but is intended by the contracting parties to benefit as a consequence of a contract is termed a(n):

The Uniform Commercial Code (UCC)states,"No delegation of performance relieves the party delegating of any duty to perform or any liability for breach" under:

Even employment contracts may be assigned if there is no relationship of trust or confidence,or any other circumstance that would create a materially greater burden on the party whose services are being assigned.

In a private-service contract,the party who hires the specific person to perform certain duties has a(n)____________interest in having only the hired person perform.

Person A was contracted by Person B to build a beach house.Soon after,Person A was unable to complete the entire house,and hence assigned Person C to complete the contract,after seeking Person B's approval.In this example,the obligation of Person A is discharged and this is a:

Rights or duties under a contract may be assigned by a court of law when a contracting party:

For personal service contracts,parties may transfer their rights but never their duties.

When all parties to a contract agree to a significant change in the contract,the change is called a(n):

The person who transfers his or her rights is known as the assignor; the third party to whom the rights are transferred is known as the assignee.

The beneficiary named in the insurance policy is legally a(n):

An incidental beneficiary is one who may benefit as an indirect consequence of a contract,although that was not the intent of the:

An incidental beneficiary is one who may benefit as a direct consequence of contract.

A party's rights in a contract can be assigned to another party; and also a party's duties are transferred to a third party if the duties do not involve:

Personal-service contracts may be assigned.

The burden of investigating claims of assignment falls on the party notified of the:

A party to a contract will not be obligated by an assignment made by the other party without his or her knowledge until:

A third-party beneficiary to a contract has no legal right to the benefits resulting from the contract.

Third parties to a contract are those who are not a party to the contract but who:

Personal service contracts are automatically assigned at the time of death.

Athletes are hired because of their special personal skills; because of this,their services under a contract:

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