Exam 12: Third Parties, Discharge, and Remedies

Dash's auto insurance policy requires that he file a written notice of a claim with the insurance company within ten days of any damage in an auto accident or the insurance company may refuse to pay the damage claim. Dash has several accidents and always simply orally reports the damage to the insurance agent, and the insurance company pays the claim; however, on this occasion, after his failure to file a written notice of the claim, the company refuses to pay the claim. They cite the express language of the insurance policy. Is the insurance company correct? Discuss.

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Question 1

Correct Answer:

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The written reporting requirement is a condition subsequent and failure to meet it terminates the obligation of the insurance company; however, the repeated accepting of an oral report without objection creates a waiver of the written requirement, hence the company cannot now object and deny payment.

Jennifer contracts to purchase Allison's house when Allison is transferred out of the state. The contract calls for monthly payments, but allows Jennifer to pay the remaining balance at any time. Jennifer, on June 1, sends Allison an offer to pay the balance. Allison receives the offer on June 2, but sets it aside until October 1. When Allison realizes that Jennifer has not made any payments for four months, she threatens to sue Jennifer for breach of contract. Discuss the legal rules governing this situation.

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Question 2

Correct Answer:

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Jennifer tendered payment in June and that stopped the running of interest. Allison's neglect in responding amounted to a rejection of Jennifer's tender. However, people who must pay money are not excused from paying if their tender of payment is rejected. The court will require Jennifer to tender payment. Allison has no legal basis to sue Jennifer.

____________ occurs when one party makes false statements or commits some sort of false action that causes another party to rely on those falsehoods and then experience an injury or loss as a result.

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(Multiple Choice)

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Question 3

Correct Answer:

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____________ occurs when a party to a contract either expresses or clearly implies an intention not to perform the contract, even before being required to act.

(Multiple Choice)

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Question 4

Lisa did not deliver goods in 1992 as her contract with Jozell required, but Jozell took no legal action for fifteen years and then sued Lisa for breach of contract. Discuss the suit.

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Question 5

Miko and Gina enter into a written contract. If Miko assigns her part of the agreement to Teresa and Teresa tells Gina of the assignment, Miko is bound by an implied warranty that Gina will respect the assignment.

(True/False)

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Question 6

Tom and Nancy enter into a written contract for the sale of a dollhouse that Tom will custom-make for Nancy. In the contract, Nancy agrees to pay $350 if she breaks the contract. This sum of money is known as:

(Multiple Choice)

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Question 7

A third party is an individual who is affected by a contract but who is not one of the contracting parties.

(True/False)

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Question 8

Quantum meruit damages are token damages awarded to parties who have experienced an injury to their legal rights, but no actual loss.

(True/False)

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Question 9

If due notice has been given and the obligor makes payment to the assignor, the obligor is excused from making payment to the assignee.

(True/False)

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Question 10

A(n) ____________ is a new agreement resulting from a bona fide dispute between the parties as to the terms of their original agreement.

(Multiple Choice)

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Question 11

Martin entered into a written contract to sell Anna his football card collection for $10,000, payable in five installments. Martin then orally told Cathy that she could collect the proceeds of his sale. Discuss Cathy's legal rights.

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Question 12

Which of the following beneficiaries has no enforceable legal rights?

(Multiple Choice)

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Question 13

Jackie's mortgage payment to Commerce Bank was due on June 1. On May 31, Jackie received a notice that her mortgage had been assigned to Brown Investments. Jackie is allowed a reasonable time to verify that an assignment has been truly made.

(True/False)

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Question 14

An incidental beneficiary is an outside party that can legally enforce the contract made by those in privity of contract.

(True/False)

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Question 15

Only two parties are associated with any assignment-the assignor and the obligor.

(True/False)

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Question 16

Henry borrows money from Commerce Bank to purchase a house. However, he moves to another city to attend graduate school and sells the house to Maria. Henry wants to be released from his payment obligations to Commerce Bank. Which of the following would release Henry from his liability to Commerce Bank?

(Multiple Choice)

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Question 17

If a time for performance is not stated in the contract, then the contract must be performed immediately.

(True/False)

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Question 18

Tibbetts left a television with Quick Fix, Inc. for repair. Quick Fix made tests and diagnosed the problem, but never began the actual repairs. Nothing was done on the set for more than three months. After repeated telephone calls demanding that the work be done, Tibbetts asked for the return of the set. Quick Fix refused to give up the set unless Tibbetts paid for the time spent on making the tests. Discuss the case.

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Question 19

Norbert receives an official-looking written notice which states that Mountain Mortgage Inc., from whom he had borrowed money to purchase his house, has assigned Walter all rights to receive payment and that Norbert should make all future mortgage payments to Walter. Discuss Norbert's rights and duties.

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Question 20

Showing 1 - 20 of 50

Exam 12: Third Parties, Discharge, and Remedies

____________ occurs when one party makes false statements or commits some sort of false action that causes another party to rely on those falsehoods and then experience an injury or loss as a result.

____________ occurs when a party to a contract either expresses or clearly implies an intention not to perform the contract, even before being required to act.

Lisa did not deliver goods in 1992 as her contract with Jozell required, but Jozell took no legal action for fifteen years and then sued Lisa for breach of contract. Discuss the suit.

Miko and Gina enter into a written contract. If Miko assigns her part of the agreement to Teresa and Teresa tells Gina of the assignment, Miko is bound by an implied warranty that Gina will respect the assignment.

Tom and Nancy enter into a written contract for the sale of a dollhouse that Tom will custom-make for Nancy. In the contract, Nancy agrees to pay $350 if she breaks the contract. This sum of money is known as:

A third party is an individual who is affected by a contract but who is not one of the contracting parties.

Quantum meruit damages are token damages awarded to parties who have experienced an injury to their legal rights, but no actual loss.

If due notice has been given and the obligor makes payment to the assignor, the obligor is excused from making payment to the assignee.

A(n) ____________ is a new agreement resulting from a bona fide dispute between the parties as to the terms of their original agreement.

Martin entered into a written contract to sell Anna his football card collection for $10,000, payable in five installments. Martin then orally told Cathy that she could collect the proceeds of his sale. Discuss Cathy's legal rights.

Which of the following beneficiaries has no enforceable legal rights?

Jackie's mortgage payment to Commerce Bank was due on June 1. On May 31, Jackie received a notice that her mortgage had been assigned to Brown Investments. Jackie is allowed a reasonable time to verify that an assignment has been truly made.

An incidental beneficiary is an outside party that can legally enforce the contract made by those in privity of contract.

Only two parties are associated with any assignment-the assignor and the obligor.

If a time for performance is not stated in the contract, then the contract must be performed immediately.

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