Question 1

When an assignor transfers her rights to an assignee,the assignor still retains the right to collect on the contract.

Accepted Answer

A) True 
 B)False  False

Question 2

Which statement is true with respect to whether a contract may be assigned even in the presence of an antiassignment clause?

Accepted Answer

A) Assignments made by operation of law,assignments for the right to receive monetary payments,and assignments for the right to receive damages for a breach of contract to sell goods or services may be assigned even in the presence of an antiassignment clause. 
B) No contractual rights or duties may be assigned in the presence of an antiassignment clause. 
C) Antiassignment clauses are void as against public policy and have no effect on the right of assignment. 
D) Assignments for the right to receive monetary payments may be assigned,but no other assignments may be made in the presence of an antiassignment clause. 
E) Assignments made by operation of law may be assigned,but no other assignments may be made in the presence of an antiassignment clause. 
A) Assignments made by operation of law,assignments for the right to receive monetary payments,and assignments for the right to receive damages for a breach of contract to sell goods or services may be assigned even in the presence of an antiassignment clause. 
B) No contractual rights or duties may be assigned in the presence of an antiassignment clause. 
C) Antiassignment clauses are void as against public policy and have no effect on the right of assignment. 
D) Assignments for the right to receive monetary payments may be assigned,but no other assignments may be made in the presence of an antiassignment clause. 
E) Assignments made by operation of law may be assigned,but no other assignments may be made in the presence of an antiassignment clause. A

Question 3

Parties not in ________ usually do not have rights to a contract.

Accepted Answer

A) Diverse contract 
B) Privileged contract 
C) Privity of contract 
D) Close contract 
E) Acknowledged contract 
A) Diverse contract 
B) Privileged contract 
C) Privity of contract 
D) Close contract 
E) Acknowledged contract C

Question 4

A third party,who is not part of an original contract,but to whom a duty to perform contained in the original contract is transferred,is called a[n] .

Accepted Answer

A) Delegator 
B) Assignee 
C) Assignor 
D) Transferor 
E) Delegatee 
A) Delegator 
B) Assignee 
C) Assignor 
D) Transferor 
E) Delegatee

Question 5

Which rule affirms that in the case of multiple assignments of the same right,the first party granted the assignment is the party correctly entitled to the contractual right?

Accepted Answer

A) The first-assignment-in-time rule 
B) The French rule 
C) The last-assignment-in-time rule 
D) The English rule 
E) The American rule 
A) The first-assignment-in-time rule 
B) The French rule 
C) The last-assignment-in-time rule 
D) The English rule 
E) The American rule

Question 6

Which rule states that in the case of multiple assignments of the same right,the first assignee to give notice of assignment to the obligor is the party with rights to the contract?

Accepted Answer

A) The last-assignment-in-time rule 
B) The English rule 
C) The first-assignment-in-time rule 
D) The French rule 
E) The American rule 
A) The last-assignment-in-time rule 
B) The English rule 
C) The first-assignment-in-time rule 
D) The French rule 
E) The American rule

Question 7

Jason is excited because a developer plans a subdivision full of high-priced homes that will adjoin his property,and he believes that the subdivision will significantly increase the value of his property.Jason is so pleased that he puts in a new swimming pool to celebrate.However,the developer changes his mind and decides not to develop the subdivision.Jason is angry and asks if he can sue the developer,particularly since he can establish reliance.What would you tell Jason and why? Discuss whether you agree with the law on this issue and why or why not.

Accepted Answer

Jason cannot sue the developer

Question 8

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) Obligee 
C) Promisor 
D) Obligor 
E) Assignee 
A) Promisee 
B) Obligee 
C) Promisor 
D) Obligor 
E) Assignee

Question 9

When can an assignee decline an assignment?

Accepted Answer

A) If he declines in a timely fashion and has not agreed to the assignment. 
B) Only if the assignment would impose additional obligations. 
C) If he declines within the time limit set by the UCC. 
D) If he declines within the time limit set by the statute of frauds. 
E) Never. 
A) If he declines in a timely fashion and has not agreed to the assignment. 
B) Only if the assignment would impose additional obligations. 
C) If he declines within the time limit set by the UCC. 
D) If he declines within the time limit set by the statute of frauds. 
E) Never.

Question 10

[Portraits] Tori,a famous portrait painter,agreed to paint Harry's portrait for $4,000.She also agreed to paint the portraits of Gabby's two Corgi dogs,Queenie and Prince.Gabby agreed to pay Tori $10,000 for the two Corgi portraits.Tori charged Gabby more because she met the spoiled dogs,and they really got on her nerves.Tori subsequently fell behind on finishing Harry's portrait,so she assigned the right to receive the money for the dog portraits to her assistant,Justin,and delegated the duty to Justin to paint the dog portraits.Justin eagerly accepted,and painted the portraits.Tori also assigned to Justin the right to receive payment from Harry,to satisfy various payments she owed him for other duties.The contract Tori had with Gabby did not address assignment in any way.The contract Tori had with Harry,however,prohibited the right to assign payment for services received.Harry considered himself to be an experienced business person,and insisted on that anti-assignment clause because he had read somewhere that such a provision was a good idea.Tori finished the portrait of Harry and called him to come and pick it up.Meanwhile,a disgruntled secretary who disliked Tori told both Gabby and Harry about the assignments to Justin.Gabby was furious and refused to pick up the portrait or to pay anyone.Harry likewise refused to pay for his portrait.
-What would be the most likely result if Tori sues Gabby for the $10,000 payment?

Accepted Answer

A) Tori will win because the contract did not contain an express provision prohibiting assignment or delegation of contractual rights and duties. 
B) Tori will win only if Justin did a good job on the portraits. 
C) Tori will win regardless of what type of job Justin did on the portraits so long as he was a qualified portrait painter. 
D) Gabby will win because the portrait was personal in nature and could not be assigned. 
E) Tori will win because Justin was employed as her assistant. 
A) Tori will win because the contract did not contain an express provision prohibiting assignment or delegation of contractual rights and duties. 
B) Tori will win only if Justin did a good job on the portraits. 
C) Tori will win regardless of what type of job Justin did on the portraits so long as he was a qualified portrait painter. 
D) Gabby will win because the portrait was personal in nature and could not be assigned. 
E) Tori will win because Justin was employed as her assistant.

Question 11

In determining whether a person is an incidental or intended beneficiary,which of the following do courts consider?

Accepted Answer

A) The courts ask if a reasonable person in the position of the party in question would believe the contracting parties intended to benefit the party in question. 
B) The courts ask if the party in question paid something for the rights. 
C) The courts ask if it is substantially certain that the contracting parties intended to benefit the party in question. 
D) The courts ask if the party in question paid at least $500 for the rights. 
E) The courts ask if it can be proven beyond a reasonable doubt that the contracting parties intended to benefit the party in question. 
A) The courts ask if a reasonable person in the position of the party in question would believe the contracting parties intended to benefit the party in question. 
B) The courts ask if the party in question paid something for the rights. 
C) The courts ask if it is substantially certain that the contracting parties intended to benefit the party in question. 
D) The courts ask if the party in question paid at least $500 for the rights. 
E) The courts ask if it can be proven beyond a reasonable doubt that the contracting parties intended to benefit the party in question.

Question 12

When a party to a contract transfers his or her rights to a contract to a third party,which of the following occurs?

Accepted Answer

A) Disgorgement 
B) Privity 
C) Transfer 
D) Assignment 
E) Referral 
A) Disgorgement 
B) Privity 
C) Transfer 
D) Assignment 
E) Referral

Question 13

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

Accepted Answer

A) Promised 
B) Avowed 
C) Creditor 
D) Incidental 
E) Donee 
A) Promised 
B) Avowed 
C) Creditor 
D) Incidental 
E) Donee

Question 14

How do courts generally treat antiassignment clauses?

Accepted Answer

A) As promises 
B) As ineffective clauses 
C) As void under statute of frauds 
D) As invalid clauses 
E) As clauses against public policy 
A) As promises 
B) As ineffective clauses 
C) As void under statute of frauds 
D) As invalid clauses 
E) As clauses against public policy

Question 15

What is one reason why the right to assign monetary payments cannot be denied?

Accepted Answer

A) Because denial of the right to assign monetary payments would be a violation of the UCC. 
B) Because privity of contract gives each party the right to assign monetary payments 
C) Because companies often transfer rights to payments in the regular course of business. 
D) Because the doctrine of promissory estoppel guarantees the right to assign monetary payments. 
E) Because denial of the right to assign monetary payments would be a violation of the statute of frauds. 
A) Because denial of the right to assign monetary payments would be a violation of the UCC. 
B) Because privity of contract gives each party the right to assign monetary payments 
C) Because companies often transfer rights to payments in the regular course of business. 
D) Because the doctrine of promissory estoppel guarantees the right to assign monetary payments. 
E) Because denial of the right to assign monetary payments would be a violation of the statute of frauds.

Question 16

Which of the following is the likely result if Bobby sues Laura for the $40 that Jaya owes him for the book?

Accepted Answer

A) Bobby will lose because his only right of action is against Jaya. 
B) Bobby will win. 
C) Bobby will lose because he was not aware of the assignment before the duties were completed. 
D) Bobby will lose because the attempted delegation was against public policy. 
E) Bobby will win only if he can prove that Jaya has insufficient funds with which to pay him. 
A) Bobby will lose because his only right of action is against Jaya. 
B) Bobby will win. 
C) Bobby will lose because he was not aware of the assignment before the duties were completed. 
D) Bobby will lose because the attempted delegation was against public policy. 
E) Bobby will win only if he can prove that Jaya has insufficient funds with which to pay him.

Question 17

Which factors are considered by a court in determining whether a party is an intended or incidental beneficiary?

Accepted Answer

A) Whether performance of the contract is done directly to the third party,the third party's ability to control the specifics of performance of the contract,and whether the contract directly states that the third party is the benefiting party. 
B) Whether performance of the contract is done directly to the third party and the third party's ability to control the specifics of performance of the contract,but not whether the contract directly states that the third party is the benefiting party. 
C) Whether the contract directly states that the third party is the benefiting party but not the third party's ability to control the specifics of performance of the contract or whether performance of the contract is done directly to the third party. 
D) The third party's ability to control the specifics of performance of the contract but not whether performance of the contract is done directly to the third party or whether the contract directly states that the third party is the benefiting party. 
E) Whether performance of the contract is done directly to the third party and whether the contract directly states that the third party is the benefiting party,but not the third party's ability to control the specifics of performance of the contract. 
A) Whether performance of the contract is done directly to the third party,the third party's ability to control the specifics of performance of the contract,and whether the contract directly states that the third party is the benefiting party. 
B) Whether performance of the contract is done directly to the third party and the third party's ability to control the specifics of performance of the contract,but not whether the contract directly states that the third party is the benefiting party. 
C) Whether the contract directly states that the third party is the benefiting party but not the third party's ability to control the specifics of performance of the contract or whether performance of the contract is done directly to the third party. 
D) The third party's ability to control the specifics of performance of the contract but not whether performance of the contract is done directly to the third party or whether the contract directly states that the third party is the benefiting party. 
E) Whether performance of the contract is done directly to the third party and whether the contract directly states that the third party is the benefiting party,but not the third party's ability to control the specifics of performance of the contract.

Question 18

Which of the following are types of intended beneficiaries?

Accepted Answer

A) Incidental and creditor,but not donee 
B) Creditor but not donee or incidental 
C) Donee but not creditor or incidental 
D) Creditor,donee,and incidental 
E) Donee and creditor,but not incidental 
A) Incidental and creditor,but not donee 
B) Creditor but not donee or incidental 
C) Donee but not creditor or incidental 
D) Creditor,donee,and incidental 
E) Donee and creditor,but not incidental

Question 19

Simone assigned her rights under a contract to Juan.Forgetting that she took this action,she later assigned her rights under the contract to Kai.Kai provided notice to the obligor of the assignment right away,but Juan never provided notice.The state gives Kai the rights.Which rule did the state apply?

Accepted Answer

A) The American rule 
B) The French rule 
C) The first-assignment-in-time rule 
D) The last-assignment-in-time rule 
E) The English rule 
A) The American rule 
B) The French rule 
C) The first-assignment-in-time rule 
D) The last-assignment-in-time rule 
E) The English rule

Question 20

A third party who benefits from a contract in which the promisor agrees to pay the promisee's debt is a[n] ________ beneficiary.

Accepted Answer

A) Donee 
B) Creditor 
C) Avowed 
D) Promised 
E) Incidenta l 
A) Donee 
B) Creditor 
C) Avowed 
D) Promised 
E) Incidenta l

Exam 19: Third-Party Rights to Contracts

When an assignor transfers her rights to an assignee,the assignor still retains the right to collect on the contract.

Which statement is true with respect to whether a contract may be assigned even in the presence of an antiassignment clause?

Parties not in ________ usually do not have rights to a contract.

A third party,who is not part of an original contract,but to whom a duty to perform contained in the original contract is transferred,is called a[n] .

Which rule affirms that in the case of multiple assignments of the same right,the first party granted the assignment is the party correctly entitled to the contractual right?

Which rule states that in the case of multiple assignments of the same right,the first assignee to give notice of assignment to the obligor is the party with rights to the contract?

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.

When can an assignee decline an assignment?

In determining whether a person is an incidental or intended beneficiary,which of the following do courts consider?

When a party to a contract transfers his or her rights to a contract to a third party,which of the following occurs?

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

How do courts generally treat antiassignment clauses?

What is one reason why the right to assign monetary payments cannot be denied?

Which of the following is the likely result if Bobby sues Laura for the $40 that Jaya owes him for the book?

Which factors are considered by a court in determining whether a party is an intended or incidental beneficiary?

Which of the following are types of intended beneficiaries?

A third party who benefits from a contract in which the promisor agrees to pay the promisee's debt is a[n] ________ beneficiary.

An Introduction to Dynamic Business Law

Business Ethics

The Uslegal System

Alternative Dispute Resolution

Constitutional Principles

International and Comparative Law

Crime and the Business Community

Tort Law

Negligence and Strict Liability

Product Liability

Liability of Accountants and Other Professionals

Intellectual Property

Introduction to Contracts

Agreement

Consideration

Capacity and Legality

Legal Assent

Contracts in Writing

Discharge and Remedies

Introduction to Sales and Lease Contracts

Title,risk of Loss,and Insurable Interest

Performance and Obligations Under Sales and Leases

Remedies for Breach of Sales and Lease Contracts

Warranties

Negotiable Instruments: Negotiability and Transferability

Negotiation, holder in Due Course, and Defenses

Liability, defenses, and Discharge

Checks and Electronic Fund Transfers

Secured Transactions

Other Creditors Remedies and Suretyship

Bankruptcy and Reorganization

Agency Formation and Duties

Liability to Third Parties and Termination

Forms of Business Organization

Partnerships: Nature, formation, and Operation

Partnerships: Termination and Limited Partnerships

Corporations: Formation and Financing

Corporations: Directors, officers, and Shareholders

Corporations: Mergers, consolidations, terminations

Corporations: Securities and Investor Protection

Employment and Labor Law

Employment Discrimination

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

The Nature of Property, personal Property, and Bailments

Real Property

Landlord-Tenant Law

Insurance Law

Wills and Trusts

Filters