Question 1

In a contract, the term ________means tasks and performances, but not responsibilities.

Accepted Answer

A)  rights 
B)  duties 
C)  role 
D)  errands 
A)  rights 
B)  duties 
C)  role 
D)  errands B

Question 2

An incidental beneficiary has a legal right to benefits resulting from a contract.

Accepted Answer

A) True 
 B)False  False

Question 3

State the differences between a novation and an assignment.

Accepted Answer

A novation differs from an assignment in the following ways:
(i) A novation requires mutual consent of all parties, just as a new contract does. An assignment can be made without the mutual consent of both contracting parties.
(ii) A novation transfers all rights and obligations in a contract, but an assignment transfers only the rights of the assignor and leaves the assignor with the duty of fulfilling his or her obligations under the contract.

Question 4

What is the difference between a third-party beneficiary and an incidental beneficiary?

Accepted Answer

A third-party beneficiary has a legal ri

Question 5

A third-party beneficiary to a contract rarely has a legal right to the benefits resulting from the contract.

Accepted Answer

A) True 
 B)False

Question 6

Athletes are hired because of their special personal skills; because of this, their services under a contract:

Accepted Answer

A)  may not be delegated. 
B)  may be delegated. 
C)  may not be assigned. 
D)  may be assigned. 
A)  may not be delegated. 
B)  may be delegated. 
C)  may not be assigned. 
D)  may be assigned.

Question 7

An incidental beneficiary is one who may benefit as an indirect consequence of a contract, although that was not the intent of the:

Accepted Answer

A)  administrator. 
B)  contracting parties. 
C)  assignor. 
D)  deceased party. 
A)  administrator. 
B)  contracting parties. 
C)  assignor. 
D)  deceased party.

Question 8

When all parties to a contract agree to a significant change in the contract, the change is called a(n):

Accepted Answer

A)  assignment. 
B)  delegation. 
C)  execution. 
D)  novation. 
A)  assignment. 
B)  delegation. 
C)  execution. 
D)  novation.

Question 9

A party to a contract who assigns his or her rights or delegates his or her duties to a third party is:

Accepted Answer

A)  allowed to hold the third party responsible for the contract execution. 
B)  held responsible only until the contract is assigned. 
C)  not responsible for the execution of the contract. 
D)  never free from the contract until it is completely executed. 
A)  allowed to hold the third party responsible for the contract execution. 
B)  held responsible only until the contract is assigned. 
C)  not responsible for the execution of the contract. 
D)  never free from the contract until it is completely executed.

Question 10

The laws dealing with bankruptcy provide that the assets and contracts of a bankrupt person or business be:

Accepted Answer

A)  sold to the highest bidder. 
B)  assigned to the trustee in bankruptcy. 
C)  held by the court pursuant to a decree. 
D)  transferred to the largest creditor. 
A)  sold to the highest bidder. 
B)  assigned to the trustee in bankruptcy. 
C)  held by the court pursuant to a decree. 
D)  transferred to the largest creditor.

Question 11

Most rights are assignable, except in cases in which the obligations of the parties would be significantly:

Accepted Answer

A)  altered. 
B)  recorded. 
C)  rejected. 
D)  shared. 
A)  altered. 
B)  recorded. 
C)  rejected. 
D)  shared.

Question 12

A party's rights in a contract can be assigned to another party; and also a party's duties are transferred to a third party if the duties do not involve:

Accepted Answer

A)  charity. 
B)  royalty. 
C)  goodwill. 
D)  unique skills. 
A)  charity. 
B)  royalty. 
C)  goodwill. 
D)  unique skills.

Question 13

Personal service contracts are automatically assigned at the time of death.

Accepted Answer

A) True 
 B)False

Question 14

A contract may prohibit either just one party or both parties from assigning or delegating.

Accepted Answer

A) True 
 B)False

Question 15

An incidental beneficiary is one who may benefit as a direct consequence of contract.

Accepted Answer

A) True 
 B)False

Question 16

Rights or duties under a contract may be assigned by a court of law when a contracting party:

Accepted Answer

A)  earns profits. 
B)  incurs losses. 
C)  opens new business. 
D)  dies or becomes bankrupt. 
A)  earns profits. 
B)  incurs losses. 
C)  opens new business. 
D)  dies or becomes bankrupt.

Question 17

An assignment must always be in writing.

Accepted Answer

A) True 
 B)False

Question 18

A person, who is not a party to a contract but is intended by the contracting parties to benefit as a consequence of a contract, is termed a(n):

Accepted Answer

A)  third party beneficiary. 
B)  incidental beneficiary. 
C)  official receiver. 
D)  arbitrator. 
A)  third party beneficiary. 
B)  incidental beneficiary. 
C)  official receiver. 
D)  arbitrator.

Question 19

A life insurance policy is an example of a third-party contract.

Accepted Answer

A) True 
 B)False

Question 20

If the original contract is required to be in writing under the Statute of Frauds, the assignment:

Accepted Answer

A)  must also be in writing. 
B)  may be either written or oral. 
C)  is void. 
D)  is valid. 
A)  must also be in writing. 
B)  may be either written or oral. 
C)  is void. 
D)  is valid.

Exam 14: Operation of Contracts

In a contract, the term ________means tasks and performances, but not responsibilities.

An incidental beneficiary has a legal right to benefits resulting from a contract.

State the differences between a novation and an assignment.

What is the difference between a third-party beneficiary and an incidental beneficiary?

A third-party beneficiary to a contract rarely has a legal right to the benefits resulting from the contract.

Athletes are hired because of their special personal skills; because of this, their services under a contract:

An incidental beneficiary is one who may benefit as an indirect consequence of a contract, although that was not the intent of the:

When all parties to a contract agree to a significant change in the contract, the change is called a(n):

A party to a contract who assigns his or her rights or delegates his or her duties to a third party is:

The laws dealing with bankruptcy provide that the assets and contracts of a bankrupt person or business be:

Most rights are assignable, except in cases in which the obligations of the parties would be significantly:

A party's rights in a contract can be assigned to another party; and also a party's duties are transferred to a third party if the duties do not involve:

Personal service contracts are automatically assigned at the time of death.

A contract may prohibit either just one party or both parties from assigning or delegating.

An incidental beneficiary is one who may benefit as a direct consequence of contract.

Rights or duties under a contract may be assigned by a court of law when a contracting party:

An assignment must always be in writing.

A person, who is not a party to a contract but is intended by the contracting parties to benefit as a consequence of a contract, is termed a(n):

A life insurance policy is an example of a third-party contract.

If the original contract is required to be in writing under the Statute of Frauds, the assignment:

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