Question 1

Which of the following is a correct statement regarding form requirements for a valid assignment?

Accepted Answer

A) In order for an assignment to be valid,a UCC 2-301 compliance statement is required. 
B) In order for an assignment to be valid,a UCC 4-305 perfection statement is required. 
C) In order for an assignment to be valid,a Business Form 2-547 must be executed by the assignor. 
D) In order for an assignment to be valid,a Business Form 4-298 must be executed by the obligor (the other party to the original contract who owes a duty to the assignee). 
E) No form is required for an assignment to be valid. 
A) In order for an assignment to be valid,a UCC 2-301 compliance statement is required. 
B) In order for an assignment to be valid,a UCC 4-305 perfection statement is required. 
C) In order for an assignment to be valid,a Business Form 2-547 must be executed by the assignor. 
D) In order for an assignment to be valid,a Business Form 4-298 must be executed by the obligor (the other party to the original contract who owes a duty to the assignee). 
E) No form is required for an assignment to be valid.

Question 2

Portraits.Belinda,a famous portrait painter,agreed to paint Harry's portrait for $5,000.She also agreed to paint the portraits of Michelle's two Welsh Corgi dogs,Baby and Bree.Michelle agreed to pay Belinda $12,000 for the portraits.Belinda charged Michelle more because the dogs annoyed her.Belinda met the spoiled dogs,and they really got on her nerves.Plus,she was behind on finishing Harry's portrait.Belinda,therefore,proceeded to assign the right to receive the money for the dog portraits and the duty to paint the dog portraits to her assistant,Fred.He eagerly accepted and painted the portraits.As payment for amounts she owed him for various duties,Belinda also assigned to Fred the right to receive payment from Harry.Neither the contract Belinda had with Harry nor the contract she had with Michelle expressly prohibited assignment or delegation of contractual rights and duties.Belinda finished the portrait of Harry and called him to come and pick it up.Meanwhile,a disgruntled secretary who disliked Belinda told both Michelle and Harry about the agreements with Fred.Michelle was furious and refused to pick up the portrait or pay anyone.Harry likewise refused to pay for his portrait claiming that the right to payment could not be assigned.What would be the most likely result if Fred sues Michelle for the $5,000 payment?

Accepted Answer

A) Fred will win,but only if Fred did a good job on the portraits. 
B) Fred will lose because Michelle's only obligation is to pay Belinda. 
C) Fred will win unless Michelle can prove that Fred knew that she did not want him to do the portraits. 
D) Fred will lose unless Fred can prove that he did not know that Michelle did not want him to do the portraits. 
E) Michelle will win because painting the portrait was personal in nature and could not be delegated. 
A) Fred will win,but only if Fred did a good job on the portraits. 
B) Fred will lose because Michelle's only obligation is to pay Belinda. 
C) Fred will win unless Michelle can prove that Fred knew that she did not want him to do the portraits. 
D) Fred will lose unless Fred can prove that he did not know that Michelle did not want him to do the portraits. 
E) Michelle will win because painting the portrait was personal in nature and could not be delegated.

Question 3

The ________ in a third-party beneficiary contract is the party to the contract who owes something to the promisor in exchange for the promise made to the third-party beneficiary.

Accepted Answer

A) promisee 
B) principal 
C) assignor 
D) assignee 
E) delegator 
A) promisee 
B) principal 
C) assignor 
D) assignee 
E) delegator

Question 4

Which of the following are recognized exceptions to the statute of frauds?

Accepted Answer

A) Admission,preliminary performance,and promissory estoppel 
B) Denial,preliminary performance,and promissory estoppel 
C) Denial,partial performance,and beneficial reliance 
D) Admission,partial performance,and promissory estoppel 
E) Admission,partial performance,and beneficial reliance 
A) Admission,preliminary performance,and promissory estoppel 
B) Denial,preliminary performance,and promissory estoppel 
C) Denial,partial performance,and beneficial reliance 
D) Admission,partial performance,and promissory estoppel 
E) Admission,partial performance,and beneficial reliance

Question 5

An incidental beneficiary is one who intentionally gains a benefit from a contract between other parties.

Accepted Answer

A) True 
 B)False

Question 6

An agreement two parties enter into before marriage that clearly states the ownership rights each party enjoys in the other party's property is known as a(n)________.

Accepted Answer

A) preliminary agreement 
B) planned contract 
C) separation agreement 
D) prenuptial agreement 
E) arranged marriage 
A) preliminary agreement 
B) planned contract 
C) separation agreement 
D) prenuptial agreement 
E) arranged marriage

Question 7

Within the statute of frauds,"land" encompasses not only the land and soil itself but anything ________ to the land.

Accepted Answer

A) relating 
B) adjacent 
C) contracted 
D) attached 
E) pertinent 
A) relating 
B) adjacent 
C) contracted 
D) attached 
E) pertinent

Question 8

Portraits.Belinda,a famous portrait painter,agreed to paint Harry's portrait for $5,000.She also agreed to paint the portraits of Michelle's two Welsh Corgi dogs,Baby and Bree.Michelle agreed to pay Belinda $12,000 for the portraits.Belinda charged Michelle more because the dogs annoyed her.Belinda met the spoiled dogs,and they really got on her nerves.Plus,she was behind on finishing Harry's portrait.Belinda,therefore,proceeded to assign the right to receive the money for the dog portraits and the duty to paint the dog portraits to her assistant,Fred.He eagerly accepted and painted the portraits.As payment for amounts she owed him for various duties,Belinda also assigned to Fred the right to receive payment from Harry.Neither the contract Belinda had with Harry nor the contract she had with Michelle expressly prohibited assignment or delegation of contractual rights and duties.Belinda finished the portrait of Harry and called him to come and pick it up.Meanwhile,a disgruntled secretary who disliked Belinda told both Michelle and Harry about the agreements with Fred.Michelle was furious and refused to pick up the portrait or pay anyone.Harry likewise refused to pay for his portrait claiming that the right to payment could not be assigned.What would be the most likely result if Belinda sues Michelle for the $12,000 payment?

Accepted Answer

A) Belinda will win,but only if Fred did a good job on the portraits. 
B) Belinda will win regardless of what type of job Fred did on the portraits so long as he was a qualified portrait painter. 
C) Belinda will win regardless of whether Fred was qualified and regardless of whether he did a good job because the duties were validly delegated,and Michelle's only right of recourse is against Fred. 
D) Belinda will win because the contract did not contain an express provision prohibiting assignment or delegation of contractual rights and duties. 
E) Michelle will win because painting the portrait was personal in nature and could not be delegated. 
A) Belinda will win,but only if Fred did a good job on the portraits. 
B) Belinda will win regardless of what type of job Fred did on the portraits so long as he was a qualified portrait painter. 
C) Belinda will win regardless of whether Fred was qualified and regardless of whether he did a good job because the duties were validly delegated,and Michelle's only right of recourse is against Fred. 
D) Belinda will win because the contract did not contain an express provision prohibiting assignment or delegation of contractual rights and duties. 
E) Michelle will win because painting the portrait was personal in nature and could not be delegated.

Question 9

A(n)________ beneficiary is a third party who benefits from a contract in which a promisor agrees to give a gift to a third party.

Accepted Answer

A) creditor 
B) donee 
C) incidental 
D) consequential 
E) putative 
A) creditor 
B) donee 
C) incidental 
D) consequential 
E) putative

Question 10

Which of the following is an incorrect statement regarding written contracts?

Accepted Answer

A) Disputes are easier to settle when contractual terms are solidified in writing. 
B) The moment of writing allows both parties to reconsider terms and ensure what they desire. 
C) In general,written contracts aid in the conduct of smooth business contracts. 
D) The idea of requiring a writing comes from the English Act for the Prevention of Frauds and Perjuries 
E) All contracts must be in writing in order to be enforced. 
A) Disputes are easier to settle when contractual terms are solidified in writing. 
B) The moment of writing allows both parties to reconsider terms and ensure what they desire. 
C) In general,written contracts aid in the conduct of smooth business contracts. 
D) The idea of requiring a writing comes from the English Act for the Prevention of Frauds and Perjuries 
E) All contracts must be in writing in order to be enforced.

Question 11

Richard has insurance with Exceptional Coverage Insurance Company,Inc.(Exceptional Coverage).Richard has a wreck with Susie.The adjuster for Exceptional Coverage orally agrees to pay Susie $1,000 for the damage to her car.The adjuster,however,gets in trouble with his boss for agreeing to pay too much.He tells Susie that he is backing out of the deal because the agreement is unenforceable on the basis that the statute of frauds requires that a contract to pay the debt of another be in writing.Is the adjuster correct? Why or why not?

Accepted Answer

The adjuster is not correct.The insurer

Question 12

A(n)________ occurs when a party to a contract transfers her duty to perform to a third party that is not part of the original contract.

Accepted Answer

A) novation 
B) assignment 
C) delegation 
D) substantial performance 
E) agency 
A) novation 
B) assignment 
C) delegation 
D) substantial performance 
E) agency

Question 13

Which of the following are written contracts intended to be the complete and final representation of the parties' agreement?

Accepted Answer

A) Parol evidence agreements 
B) Integrated contracts 
C) Adhesion contracts 
D) Bilateral contracts 
E) Invitations to negotiate 
A) Parol evidence agreements 
B) Integrated contracts 
C) Adhesion contracts 
D) Bilateral contracts 
E) Invitations to negotiate

Question 14

A party to a contract who transfers her duty to perform to a third party who is not part of the original contract is called a(n)________.

Accepted Answer

A) delegatee 
B) delegator 
C) assignor 
D) assignee 
E) agent 
A) delegatee 
B) delegator 
C) assignor 
D) assignee 
E) agent

Question 15

What is the term for a party to a contract who transfers her rights under the contract to a third party?

Accepted Answer

A) Donor beneficiary 
B) Debtor beneficiary 
C) Delegator 
D) Assignor 
E) Assignee 
A) Donor beneficiary 
B) Debtor beneficiary 
C) Delegator 
D) Assignor 
E) Assignee

Question 16

Lake House.Harry has two houses,a house on the lake and a house in town.Rebecca wants to buy the house on the lake.Harry and Rebecca orally agree that Rebecca will buy the house on the lake for $300,000.Harry hurriedly writes out a contract providing that he would sell "his house" to Rebecca for $300,000.Harry signs the top of the document.Rebecca does not sign at all.No merger clause is included in the contract.Harry backs out of the contract,and Rebecca sues him.He tells the judge that the statute of frauds is not satisfied because he did not sign the document at the end and also because Rebecca did not sign at all.He also tells the judge that,at any rate,the agreement referred to the house in town,not the house on the lake; and that under the parol evidence rule,he had the right to identify the correct house.Which of the following is true regarding Harry's assertion that under the parol evidence rule he alone had the right to identify the house referenced in the contract?

Accepted Answer

A) Harry is correct. 
B) Harry is incorrect because under the parol evidence rule,Rebecca,as the buyer,would be allowed to identify the subject matter in the event of a discrepancy. 
C) Harry is incorrect because under the parol evidence rule,the judge would likely allow oral evidence regarding the house at issue in order to clarify an ambiguity. 
D) Harry is incorrect because the parol evidence rule would not apply in situations involving an ambiguity. 
E) Harry is incorrect because the parol evidence rule would not apply in the absence of a merger clause. 
A) Harry is correct. 
B) Harry is incorrect because under the parol evidence rule,Rebecca,as the buyer,would be allowed to identify the subject matter in the event of a discrepancy. 
C) Harry is incorrect because under the parol evidence rule,the judge would likely allow oral evidence regarding the house at issue in order to clarify an ambiguity. 
D) Harry is incorrect because the parol evidence rule would not apply in situations involving an ambiguity. 
E) Harry is incorrect because the parol evidence rule would not apply in the absence of a merger clause.

Question 17

Which of the following may constitute a writing under the Uniform Commercial Code?

Accepted Answer

A) Faxes and e-mails,but not invoices or bills of lading 
B) Faxes and e-mails,but not sales slips or checks 
C) Invoices and bills of lading,but not sales slips or checks 
D) Sales slips and checks,but not invoices or bills of lading 
E) Faxes,e-mails,invoices,bills of lading,sales slips,and checks 
A) Faxes and e-mails,but not invoices or bills of lading 
B) Faxes and e-mails,but not sales slips or checks 
C) Invoices and bills of lading,but not sales slips or checks 
D) Sales slips and checks,but not invoices or bills of lading 
E) Faxes,e-mails,invoices,bills of lading,sales slips,and checks

Question 18

In contracts other than those governed by the Uniform Commercial Code,which of the following are required elements for a writing to be considered sufficient under the statute of frauds?

Accepted Answer

A) Identification of the parties to the contract. 
B) Identification of the subject of the agreement. 
C) Identification of the law applicable to the contract. 
D) Identification of the parties to the contract,identification of the subject of the agreement,and identification of the law applicable to the contract. 
E) Identification of the parties to the contract and the subject of the agreement,but not the law applicable to the contract. 
A) Identification of the parties to the contract. 
B) Identification of the subject of the agreement. 
C) Identification of the law applicable to the contract. 
D) Identification of the parties to the contract,identification of the subject of the agreement,and identification of the law applicable to the contract. 
E) Identification of the parties to the contract and the subject of the agreement,but not the law applicable to the contract.

Question 19

When may a court rule that parol evidence might be admissible to further the court's understanding of an agreement?

Accepted Answer

A) When a court determines that a written agreement represents a complete and final version of the agreement. 
B) When a court determines that a written agreement does not represent a complete and final version of the agreement. 
C) When a court determines that there is disagreement between the parties over performance of the agreement. 
D) When a court determines that the plaintiff failed to do sufficient research to determine if signing the agreement was advisable. 
E) When a court determines that neither party failed to obtain counsel to determine if signing the agreement was advisable. 
A) When a court determines that a written agreement represents a complete and final version of the agreement. 
B) When a court determines that a written agreement does not represent a complete and final version of the agreement. 
C) When a court determines that there is disagreement between the parties over performance of the agreement. 
D) When a court determines that the plaintiff failed to do sufficient research to determine if signing the agreement was advisable. 
E) When a court determines that neither party failed to obtain counsel to determine if signing the agreement was advisable.

Question 20

In the context of the parol evidence rule,the word "parol" means the release of a prisoner temporarily for a special purpose or permanently before the completion of a sentence,on the promise of good behavior.

Accepted Answer

A) True 
 B)False

Exam 13: Contracts in Writing and Third-Party Contracts

Which of the following is a correct statement regarding form requirements for a valid assignment?

The ________ in a third-party beneficiary contract is the party to the contract who owes something to the promisor in exchange for the promise made to the third-party beneficiary.

Which of the following are recognized exceptions to the statute of frauds?

An incidental beneficiary is one who intentionally gains a benefit from a contract between other parties.

An agreement two parties enter into before marriage that clearly states the ownership rights each party enjoys in the other party's property is known as a(n)________.

Within the statute of frauds,"land" encompasses not only the land and soil itself but anything ________ to the land.

A(n)________ beneficiary is a third party who benefits from a contract in which a promisor agrees to give a gift to a third party.

Which of the following is an incorrect statement regarding written contracts?

A(n)________ occurs when a party to a contract transfers her duty to perform to a third party that is not part of the original contract.

Which of the following are written contracts intended to be the complete and final representation of the parties' agreement?

A party to a contract who transfers her duty to perform to a third party who is not part of the original contract is called a(n)________.

What is the term for a party to a contract who transfers her rights under the contract to a third party?

Which of the following may constitute a writing under the Uniform Commercial Code?

In contracts other than those governed by the Uniform Commercial Code,which of the following are required elements for a writing to be considered sufficient under the statute of frauds?

When may a court rule that parol evidence might be admissible to further the court's understanding of an agreement?

In the context of the parol evidence rule,the word "parol" means the release of a prisoner temporarily for a special purpose or permanently before the completion of a sentence,on the promise of good behavior.

An Introduction to the Fundamentals of Dynamic Business Law

Business Ethics and Social Responsibility

The Uslegal System and Alternative Dispute Resolution

Administrative Law

Constitutional Law

Criminal Law and Business

Tort Law

Real, Personal, and Intellectual Property

Introduction to Contracts and Agreement

Consideration

Capacity and Legality

Reality of Assent

Discharge and Remedies

Formation and Performance of Sales and Lease Contracts

Sales and Lease Contracts: Performance, Warranties, and Remedies

Negotiable Instruments: Negotiability and Transferability

Holder in Due Course, Liability, and Defenses

Secured Transactions and Bankruptcy

Agency and Liability to Third Parties

Forms of Business Organization

Corporations: Formation and Organization

Securities Regulation

Employment and Discrimination Law

Consumer Law

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