Question 1

Stephanie's sale of rights she has under a contract with Runway Retail, Inc., to buy the retailer's clothing overstock is

Accepted Answer

A)  a delegation. 
B)  an assignment. 
C)  a third party beneficiary contract. 
D)  none of the choices. 
A)  a delegation. 
B)  an assignment. 
C)  a third party beneficiary contract. 
D)  none of the choices.

Question 2

In an assignment, the assignee obtains only those rights that the assignor had.

Accepted Answer

A) True 
 B)False

Question 3

Leonardo contracts to install automatic watering troughs in Kendall's dairy barn. Leonardo then becomes seriously ill and contracts with Jake to install the troughs. Jake is unreliable and never shows up to install the troughs. Kendall can sue

Accepted Answer

A)  no one. 
B)  Jake only. 
C)  Leonardo only. 
D)  Jake or Leonardo. 
A)  no one. 
B)  Jake only. 
C)  Leonardo only. 
D)  Jake or Leonardo.

Question 4

Eli owes Martin $10,000. Martin assigns the claim to Jack. Jack does not notify Eli of the assignment. A week later, Martin assigns the same claim to Allen. Allen immediately notifies Eli of the assignment. Jack

Accepted Answer

A)  has priority to payment in all states. 
B)  has priority to payment in states that follow the English rule. 
C)  does not have priority to payment in any state. 
D)  has priority to payment in most states. 
A)  has priority to payment in all states. 
B)  has priority to payment in states that follow the English rule. 
C)  does not have priority to payment in any state. 
D)  has priority to payment in most states.

Question 5

If a contract does not require that performance be rendered directly to a third party, the third party is an intended beneficiary.

Accepted Answer

A) True 
 B)False

Question 6

Opportunity Market Company (OMC) and Pierce enter into a contract for Pierce to cut and trim the landscaping around OMC's building before a meeting of the company's sales staff. When Pierce's schedule conflicts, he asks Rachel to do the cutting and trimming. This transfer of duties is

Accepted Answer

A)  a delegation. 
B)  an assignment. 
C)  a third party beneficiary contract. 
D)  prohibited. 
A)  a delegation. 
B)  an assignment. 
C)  a third party beneficiary contract. 
D)  prohibited.

Question 7

No contract can prohibit delegation of the duties of the contract.

Accepted Answer

A) True 
 B)False

Question 8

Bea takes out a life insurance policy with Vida Insurance Corporation that names her spouse Wendell as the bene?ficiary. This is

Accepted Answer

A)  a delegation. 
B)  an assignment. 
C)  a third party incidental beneficiary contract. 
D)  a third party intended beneficiary contract. 
A)  a delegation. 
B)  an assignment. 
C)  a third party incidental beneficiary contract. 
D)  a third party intended beneficiary contract.

Question 9

No contract can prohibit delegation of the duties of the contract.

Accepted Answer

A) True 
 B)False

Question 10

Pam borrows $5,000 from Quality Auto Sales to buy a car. When Pam does not pay the loan or return the car, Quality wants to transfers the right to the payment to Rapid Collection Agency. Rapid agrees to pay Quality for this right, but for a price that is less than the amount owed. Can Quality transfer this right to Rapid without Pam's consent? If so, and Quality committed fraud in the deal with Pam, could Pam legiti?mately refuse to pay Rapid? Explain.

Accepted Answer

Quality can transfer the right to receiv

Question 11

In most cases, a contract that prohibits its assignment cannot be assigned.

Accepted Answer

A) True 
 B)False

Question 12

Will owes Jenny $1,000. Brad owes Will $1,000. Will unconditionally assigns his rights to Jenny. Will's right to the $1,000 is then

Accepted Answer

A)  unchanged. 
B)  extinguished. 
C)  incidental. 
D)  assigned to a court. 
A)  unchanged. 
B)  extinguished. 
C)  incidental. 
D)  assigned to a court.

Question 13

Merry Music Inc. and Nayda enter into a contract for Nayda to write six songs for which Merry Music agrees to pay her. Nayda transfers her right to payment under the contract to Omni Artists Agency. In the transfer of rights, Nayda is

Accepted Answer

A)  a delegator. 
B)  an assignor. 
C)  an obligor. 
D)  an alien. 
A)  a delegator. 
B)  an assignor. 
C)  an obligor. 
D)  an alien.

Question 14

An assignee's rights are subject to the defenses that the obligor has against the assignor.

Accepted Answer

A) True 
 B)False

Question 15

All that a delegator needs to do to make a delegation effective is to express an intention to make the delegation.

Accepted Answer

A) True 
 B)False

Question 16

Hilda signs a contract with Indemnity Insurance Company that intentionally confers a benefit on Hilda's daughter Jackie as the designated beneficiary. Jackie's rights under the contract will vest

Accepted Answer

A)  automatically. 
B)  if she demonstrates her consent to the promise at Hilda's request. 
C)  if Indemnity attempts to modify the terms of the contract. 
D)  on the occurrence of the event for which the insurance was procured. 
A)  automatically. 
B)  if she demonstrates her consent to the promise at Hilda's request. 
C)  if Indemnity attempts to modify the terms of the contract. 
D)  on the occurrence of the event for which the insurance was procured.

Question 17

A transfer of contract duties to a third party is an assignment.

Accepted Answer

A) True 
 B)False

Question 18

Vested is the condition in which rights have taken effect and cannot be taken away.

Accepted Answer

A) True 
 B)False

Question 19

Mai is a third party beneficiary under a contract between Novia and Otis. Novia and Otis can modify or rescind their contract without Mai's consent

Accepted Answer

A)  at any time. 
B)  at no time. 
C)  after Mai's rights have vested. 
D)  before Mai's rights have vested. 
A)  at any time. 
B)  at no time. 
C)  after Mai's rights have vested. 
D)  before Mai's rights have vested.

Question 20

Forrest makes and sells furniture. Forrest and Glenda enter into a contract for the delivery of Forrest 's products to Glenda's Gear retail locations for which she agrees to pay the invoiced price. Forrest transfers the right to payment under the contract to Haulers Trucks & Trailers. This transfer is

Accepted Answer

A)  a delegation. 
B)  an assignment. 
C)  a third party beneficiary contract. 
D)  prohibited. 
A)  a delegation. 
B)  an assignment. 
C)  a third party beneficiary contract. 
D)  prohibited.

Exam 16: Third Party Rights

Stephanie's sale of rights she has under a contract with Runway Retail, Inc., to buy the retailer's clothing overstock is

In an assignment, the assignee obtains only those rights that the assignor had.

Leonardo contracts to install automatic watering troughs in Kendall's dairy barn. Leonardo then becomes seriously ill and contracts with Jake to install the troughs. Jake is unreliable and never shows up to install the troughs. Kendall can sue

Eli owes Martin $10,000. Martin assigns the claim to Jack. Jack does not notify Eli of the assignment. A week later, Martin assigns the same claim to Allen. Allen immediately notifies Eli of the assignment. Jack

If a contract does not require that performance be rendered directly to a third party, the third party is an intended beneficiary.

Opportunity Market Company (OMC) and Pierce enter into a contract for Pierce to cut and trim the landscaping around OMC's building before a meeting of the company's sales staff. When Pierce's schedule conflicts, he asks Rachel to do the cutting and trimming. This transfer of duties is

No contract can prohibit delegation of the duties of the contract.

Bea takes out a life insurance policy with Vida Insurance Corporation that names her spouse Wendell as the bene?ficiary. This is

No contract can prohibit delegation of the duties of the contract.

In most cases, a contract that prohibits its assignment cannot be assigned.

Will owes Jenny $1,000. Brad owes Will $1,000. Will unconditionally assigns his rights to Jenny. Will's right to the $1,000 is then

Merry Music Inc. and Nayda enter into a contract for Nayda to write six songs for which Merry Music agrees to pay her. Nayda transfers her right to payment under the contract to Omni Artists Agency. In the transfer of rights, Nayda is

An assignee's rights are subject to the defenses that the obligor has against the assignor.

All that a delegator needs to do to make a delegation effective is to express an intention to make the delegation.

Hilda signs a contract with Indemnity Insurance Company that intentionally confers a benefit on Hilda's daughter Jackie as the designated beneficiary. Jackie's rights under the contract will vest

A transfer of contract duties to a third party is an assignment.

Vested is the condition in which rights have taken effect and cannot be taken away.

Mai is a third party beneficiary under a contract between Novia and Otis. Novia and Otis can modify or rescind their contract without Mai's consent

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