Deck 17: Third Party Rights

Question 1

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

Answer 1

False

Question 2

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

Answer 2

False

Question 3

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

Answer 3

True

Question 4

In an assignment, the party receiving the rights is the assignee.

Question 5

The rights of a third party bene?ficiary under a contract vest if the third party materially changes his or her position in justifiable reliance on the promise.

Question 6

The rights of a third party bene?ficiary under a contract vest if the third party brings a lawsuit on the promise.

Question 7

As long as a contract is personal in nature, all rights under the contract can be assigned.

Question 8

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

Question 9

The assignment of the same contract right to two different parties automatically cancels both assignments.

Question 10

A right can be assigned even if the assignment will significantly alter the risks or duties of the obligor.

Question 11

Intended beneficiaries can sue to enforce a contract.

Question 12

An assignee has a right to demand performance from the obligor.

Question 13

Expressly designating a third party as a beneficiary in a contract does not indicate whether the beneficiary is intended or incidental.

Question 14

A life insurance contract involves an intended beneficiary.

Question 15

Without exception, any duty can be delegated.

Question 16

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

Question 17

An incidental third party beneficiary cannot sue to enforce the contract because the benefit is unintentional.

Question 18

Banks may not assign their loan contracts to other firms.

Question 19

It is legally necessary to notify the obligor of any assignment of rights to a third party.

Question 20

A valid delegation of duties relieves the delegator of obligations under the contract.

Question 21

Animal Feed Corporation and Beneficial Trucking, Inc., enter into a contract for Beneficial to transport a truckload of hay for which Animal Feed agrees to pay. Due to schedule conflicts, Beneficial contacts Crop Transport Company, to which Beneficial "assigns all rights under the contract." This transfer is

A) an assignment and a delegation.
B) an alienation and a negotiation.
C) an obligation and a cancelation.
D) prohibited.

Question 22

Fact Pattern 17-B1 (Questions B15-B18 apply)
Able Contractors, Inc., enters into a contract with Beau to repair, rebuild, and remodel Coastal Marina & Boardwalk, using products from Delta Lumber & Marine. Eatwell Café is next to Coastal Marina.
Refer to Fact Pattern 17-B1. The value of Eatwell Café's property will increase after Coastal Marina store is refurbished. Eatwell Café is

A) a delegatee.
B) an assignee.
C) an incidental beneficiary.
D) an intended beneficiary.

Question 23

App Developers, Inc. (ADI), enters into a contract with Carmen, the chief executive officer of SalesCorp, to create an app for the firm. To fulfill the contract, ADI hires Max and ten other student interns. With respect to the contract, Max is

A) an intended beneficiary.
B) an incidental beneficiary.
C) a delegatee.
D) an assignee.

Question 24

Bobbie enters into a contract with Claire, who agrees to paint Bobbie's studio apartment for $500. Claire is the

A) obligor.
B) obligee.
C) assignee.
D) assignor.

Question 25

Julia, a world-famous chef, signs a contract to give lessons in French cooking to Kyle. Julia wants to transfer her duties under the con?tract to Leila, a short-order cook at Mom's Café. The transfer is

A) valid because the performance required is of a nonpersonal nature.
B) valid if Leila is a highly regarded short-order cook.
C) not valid because performance depends on Julia's personal skills.
D) not valid if Kyle does not hold Leila in high regard.

Question 26

Jean promises to paint Katy's house in exchange for Lila's promise to plant trees on Jean's property. This is

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

Question 27

Richly Merchandise, Inc., contracts with Stand-Rite Contractors to build a store. Stand-Rite assigns the contract to Town Builders, which has a poor record of completing projects. Richly could most successfully argue that the con?tract cannot be assigned because

A) Richly did not consent to the assignment.
B) Richly did not receive adequate consideration for the assignment.
C) an assignment will significantly increase the risk of nonperformance.
D) Town Builders was not an original party to the deal.

Question 28

Illya owes Jenny $1,000. In a separate deal, Kasey owes Illya $1,000. Illya unconditionally assigns his rights in the deal with Kasey to Jenny. Illya's right to the $1,000 is then

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

Question 29

Leon contracts to install automatic watering troughs in Kendall's dairy barn. Leon 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

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

Question 30

Fact Pattern 17-B1 (Questions B15-B18 apply)
Able Contractors, Inc., enters into a contract with Beau to repair, rebuild, and remodel Coastal Marina & Boardwalk, using products from Delta Lumber & Marine. Eatwell Café is next to Coastal Marina.
Refer to Fact Pattern 17-B1. Halfway through the project, Able Contractors refuses to finish the job. The contract can be enforced against Able Contractors by

A) Beau only.
B) Beau or Coastal Marina only.
C) Beau, Coastal Marina, or Delta Lumber only.
D) Beau, Coastal Marina, Delta Lumber, or Eatwell Café.

Question 31

Fact Pattern 17-B1 (Questions B15-B18 apply)
Able Contractors, Inc., enters into a contract with Beau to repair, rebuild, and remodel Coastal Marina & Boardwalk, using products from Delta Lumber & Marine. Eatwell Café is next to Coastal Marina.
Refer to Fact Pattern 17-B1. Delta Lumber will realize a profit from the sale of prod?ucts to Bayside to remodel Coastal Marina. Delta Lumber is

A) a delegatee.
B) an assignee.
C) an incidental beneficiary.
D) an intended beneficiary.

Question 32

A contract between Laser Maintenance, Inc., and Medical Vision Operation Corporation contains a clause stating that any assignment is "void." This ordinarily prohibits

A) any assignment.
B) no assignment.
C) only an assignment of contract rights to personal services.
D) only an assignment that would change the obligor's risk.

Question 33

Devon and Edmond enter into a contract for the closing of a sale of Devon's recording studio. When Edmond's schedule conflicts, he asks Ferdie to perform his duties at the closing. This transfer of duties is

A) a delegation.
B) an assignment.
C) prohibited.
D) a negotiation.

Question 34

Orchid and Peony enter into a contract for the sale of Orchid's textbook at the end of the fall semester for which Peony agrees to pay Orchid $75. Peony wants to transfer her right to payment for the book to Queenie. This transfer

A) is prohibited.
B) may be oral or written.
C) must be implied.
D) must be in writing.

Question 35

Laramie contracts to provide cattle-herding services to Miles for $1,400 per month. Laramie can?not transfer this duty

A) under any circumstances.
B) without continuing to be potentially liable.
C) without Miles's consent.
D) without paying Miles at least one monthly fee.

Question 36

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

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

Question 37

Uri and Victor enter into a contract by which Uri promises to deliver business cards, advertising banners, and other marketing materials to Victor. Uri later transfers his duty under the contract to Wren. Uri is

A) a delegator and an obligor.
B) a delegate and an obligee.
C) an assignor and an assignee.
D) none of the choices.

Question 38

Fact Pattern 17-B1 (Questions B15-B18 apply)
Able Contractors, Inc., enters into a contract with Beau to repair, rebuild, and remodel Coastal Marina & Boardwalk, using products from Delta Lumber & Marine. Eatwell Café is next to Coastal Marina.
Refer to Fact Pattern 17-B1. Coastal Marina is

A) a delegatee.
B) an assignee.
C) an incidental beneficiary.
D) an intended beneficiary.

Question 39

Qiana has the right under a contract with Runway Retail, Inc., to buy the retailer's clothing overstock. Qiana's sale of this right to Sade's Style House is

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

Question 40

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

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

Question 41

Motors Repair Company contracts to sell a car to Nikki for $3,500. Nikki gives Motors Repair a worth?less check for the price. Nikki assigns her right to the car to Opie. If Motors Repair refuses to deliver the car to Opie and Opie sues, can Motors Repair raise Nikki's fraud as a defense against deliv?ery of the car to Opie? Explain.

Question 42

Greensward Landscaping Company enters into a contract with Kent to landscape Hillview Country Club's golf course, using Intown Nursery to supply trees and shrubbery. Jonas owns a lot next to Hillview's course that will benefit from the improved landscaping. The landscaping is a gift from Kent, a wealthy club member, to Hillview. What type of beneficiary is Hillview? What type of beneficiary is Jonas? What type of bene?ficiary is Intown Nursery? If Greensward refuses to do the job, who can en?force the contract against it?