A) is not entitled to enforce a contract against either party. B) usually does not give consideration in return for the gift. C) will generally become a creditor beneficiary after his or her rights vest. D) is an incidental beneficiary. A) is not entitled to enforce a contract against either party. B) usually does not give consideration in return for the gift. C) will generally become a creditor beneficiary after his or her rights vest. D) is an incidental beneficiary.

Exam 17: Third Parties

Kirk purchases a sailboat on credit from Lakefront Sales, and Lakefront keeps a security interest in the boat. Lakefront then assigns the security interest to First Finance Co. Explain what having a security interest means. Under the UCC, what defenses can Kirk assert against First Finance?

Free

(Essay)

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(32)

Question 1

Correct Answer:

Verified

A security interest is a legal right in personal property that assures payment. Lakefront has a right to take the sailboat back if Kirk fails to make his payments. First Finance, the assignee of the security interest, generally has all the rights Lakefront Sales had. Under UCC Section 9-404, Kirk may generally assert any defense against First Finance that arose from the contract, such as refusal to continue making payments because the boat has a defective hull. Also, Kirk may generally assert any defense that arose before notice of assignment; for example, if Lakefront Sales committed fraud in the sale of the boat.

Claims for personal injury are generally assignable.

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(True/False)

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Question 2

Correct Answer:

Verified

False

A party may make either an assignment or a delegation, but cannot make both an assignment and a delegation simultaneously.

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(True/False)

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Question 3

Correct Answer:

Verified

False

If Velma, as a birthday present, assigns to Jim her contractual right to collect $50 from Wood Co., this would be a gratuitous assignment.

(True/False)

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Question 4

Most, but not all, contract rights are assignable.

(True/False)

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Question 5

Martina hired Alexander to renovate her home and specifies that Alexander use Spiffy Painting for all the painting because of Spiffy's excellent reputation. In this case, Spiffy is a(n)

(Multiple Choice)

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Question 6

Garth's Imports sold a car to Wally on credit for $30,000. Garth assigned to Cassandra all of his rights to receive money from Wally. Cassandra did not inform Wally of the assignment. Therefore, Wally continued to make the next three payments directly to Garth. Shortly thereafter, Garth left the country with the money. If Cassandra sues Wally for the missing three payments

(Multiple Choice)

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(35)

Question 7

Ted and Alice own their recreational vehicle subject to a security agreement to Third U.S. Bank to secure the repayment of the purchase money loan. Ted and Alice sell their RV to Bob and Carol, who agree to take over the loan payments to the bank. There is no novation with the bank. Under these facts, if Bob and Carol do not make the loan payments, Third U.S. Bank

(Multiple Choice)

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Question 8

A third party beneficiary's status occurs

(Multiple Choice)

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Question 9

Which statement most accurately describes third party beneficiary rights?

(Multiple Choice)

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Question 10

Which of the following duties can probably be delegated?

(Multiple Choice)

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Question 11

A donee beneficiary

(Multiple Choice)

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Question 12

Norm and Frank have a legal contract that is silent with regard to an assignment of the contract. In order for Norm to assign all or part of his rights under a contract, Frank must grant such permission to Norm.

(True/False)

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Question 13

Generally, in comparison to a donee beneficiary, a creditor beneficiary has

(Multiple Choice)

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Question 14

Char-Glo Industries contracted with Evergreen Lawn Service to mow and trim the company's lawn. In the contract, Char-Glo included a clause prohibiting Evergreen from delegating its duties. Courts will ordinarily not enforce such a clause.

(True/False)

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Question 15

Jerry purchased a laptop computer for his personal use from Computer City on an installment loan contract. The sales contract stated that in the event the contract is assigned to a third party, the purchaser (Jerry) promises he will not assert any claim or defense against the assignee which he might have against Computer City. Computer City immediately assigns the contract rights to Finance USA. The computer stops working within two weeks of the purchase.

(Multiple Choice)

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Question 16

Discuss the potential liability differences between a delegation and a novation.

(Essay)

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Question 17

If Casey assigns her rights to receive income from rental property to Errol, then Errol will legally acquire any rights to the income held by Casey.

(True/False)

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Question 18

A rock group assigns its payment under a performance contract to the Costume Shop, a business that has supplied the group with outrageous stage outfits, and to which the group owes a great sum of money. Under this arrangement the rock group is the

(Multiple Choice)

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Question 19

Lincoln has a $100,000 life insurance policy and names his daughter Venus as the beneficiary. When Lincoln dies, the insurance company refuses to pay Venus the $100,000. Can she sue them to recover the money?

(Multiple Choice)

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(30)

Question 20

Showing 1 - 20 of 45

Exam 17: Third Parties

Kirk purchases a sailboat on credit from Lakefront Sales, and Lakefront keeps a security interest in the boat. Lakefront then assigns the security interest to First Finance Co. Explain what having a security interest means. Under the UCC, what defenses can Kirk assert against First Finance?

Claims for personal injury are generally assignable.

A party may make either an assignment or a delegation, but cannot make both an assignment and a delegation simultaneously.

If Velma, as a birthday present, assigns to Jim her contractual right to collect $50 from Wood Co., this would be a gratuitous assignment.

Most, but not all, contract rights are assignable.

Martina hired Alexander to renovate her home and specifies that Alexander use Spiffy Painting for all the painting because of Spiffy's excellent reputation. In this case, Spiffy is a(n)

A third party beneficiary's status occurs

Which statement most accurately describes third party beneficiary rights?

Which of the following duties can probably be delegated?

A donee beneficiary

Norm and Frank have a legal contract that is silent with regard to an assignment of the contract. In order for Norm to assign all or part of his rights under a contract, Frank must grant such permission to Norm.

Generally, in comparison to a donee beneficiary, a creditor beneficiary has

Char-Glo Industries contracted with Evergreen Lawn Service to mow and trim the company's lawn. In the contract, Char-Glo included a clause prohibiting Evergreen from delegating its duties. Courts will ordinarily not enforce such a clause.

Discuss the potential liability differences between a delegation and a novation.

If Casey assigns her rights to receive income from rental property to Errol, then Errol will legally acquire any rights to the income held by Casey.

A rock group assigns its payment under a performance contract to the Costume Shop, a business that has supplied the group with outrageous stage outfits, and to which the group owes a great sum of money. Under this arrangement the rock group is the

Lincoln has a $100,000 life insurance policy and names his daughter Venus as the beneficiary. When Lincoln dies, the insurance company refuses to pay Venus the $100,000. Can she sue them to recover the money?

Introduction to Law

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Introduction to Contracts

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Introduction to Sales

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