Deck 19: Third-Party Rights to Contracts

Question 1

A creditor beneficiary is the third-party beneficiary who is in the strongest legal position to enforce a contract.

Answer 1

True

Question 2

Assignments require special wording or forms to be valid.

Answer 2

False

Question 3

A third party who is intended to directly benefit from a contract made by two contracting parties is called an intended beneficiary.

Answer 3

True

Question 4

If a contract states "I assign all of my rights under the contract," in most cases the assignment will be considered an assignment of rights but not duties.

Question 5

Which of the following is a contractual party who agrees to do something for the other party?

A)Assignee
B)Assignor
C)Obligee
D)Boundee
E)Obligor

Question 6

In Australia a third party can sue for breach of contract.

Question 7

A donee beneficiary is a type of incidental beneficiary.

Question 8

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

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

Question 9

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

Question 10

Assignment of a contract that is personal in nature is generally permitted.

Question 11

Privity of contract is usually required in order for a party to be bound to a contract or have rights under a contract.

Question 12

Creditor beneficiaries can enforce their rights under a contract whenever the contract is valid.

Question 13

Russia duplicated the freedom of assignments found in the American Uniform Commercial Code,when modifying the Russian Civil Code.

Question 14

In determining whether a party is an incidental or intended beneficiary,one factor courts consider is whether the contract directly states that the third party is the benefiting party.

Question 15

Which of the following is a contractual party who agrees to receive something from the other party?

A)Assignor
B)Boundee
C)Assignee
D)Obligor
E)Obligee

Question 16

Amy owned a condominium directly above Miguel.Amy failed to take proper care of some plumbing problems,and on several occasions,Amy's plumbing leaked into Miguel's apartment and caused property damage.Both Amy and Miguel had signed a condominium association agreement providing that each tenant would pay for any damage caused;that the agreement could be enforced by the management of the association or,in a proper case,by an aggrieved owner;and that adherence to the agreement was required "for the benefit of the Association and any person acquiring or owning an interest in the property." The association itself refused to sue Amy in order to recover damages to reimburse Miguel.Therefore,Miguel sued Amy himself.Amy claimed that Miguel had no standing to sue.Which of the following is the most likely result of the dispute if the court follows Allan v.Nersesova,the case in the text involving a similar issue?

A)That Miguel was an intended beneficiary of the agreement between Amy and the association,but that he had no right to sue because he nevertheless lacked standing.
B)That Miguel had standing based on the association's failure to act,but that he nevertheless had no right to bring suit because he was not an intended beneficiary of the agreement between Amy and the association.
C)That Miguel was an intended beneficiary of the agreement between Amy and the association;that he had standing to sue;and that under the terms of the agreement,the association's failure to act gave him the right to proceed.
D)That Miguel could proceed but only if he could convince the association to join its lawsuit with his.
E)That the agreement between Amy and the association addressed issues involving intentional wrongdoing,such as out-of-control parties,not issues involving utilities,and that Miguel,therefore,could not sue.

Question 17

A donee beneficiary is a third party that benefits from a contract in which the promisor agrees to pay the promisee's debt in return for compensation plus interest.

Question 18

Why do parties who are not in privity of contract usually not have rights to a contract?

A)Because it would be too difficult to determine who has contractual rights if privity of contract is not required.
B)Because contracts are private agreements between parties who each agree to give or do something for the other party.
C)Because it would be against public policy to provide rights to a contract to those without privity.
D)Because privity of contract is necessary to ensure a contract is in compliance with the UCC.
E)Because of the statute of frauds.

Question 19

Most countries do not grant third-party rights to contracts.

Question 20

There is only one situation in which a third party gains rights to a contract.

Question 21

Which of the following is an exception to the general rule that rights to a contract cannot be assigned when a contract is personal in nature?

A)When nothing has been done on the contract at all.
B)When the only part of a contract left to be fulfilled is the payment.
C)When no more than three-fourths of the contractual duties have been performed.
D)When no more than half the contractual duties have been performed.
E)There is no exception because rights to a contract that is personal in nature may generally be assigned.

Question 22

Which of the following is true regarding oral assignments?

A)The UCC requires that assignments be in writing when the amount being assigned is greater than $2,000.
B)The UCC requires that assignments be in writing when the amount being assigned in greater than $1,500.
C)In some cases,assignments may be made orally.
D)Assignments,regardless of the terms,are not covered by the statute of frauds.
E)The UCC requires that assignments be in writing when the amount being assigned is greater than $1,000.

Question 23

When parties include a[n] clause in their contract,the parties are attempting to limit their ability to assign their rights under the contract.

A)Integration
B)Severability
C)Antiassignment
D)Anticontract
E)Antiobligation

Question 24

What is the term for the party to a contract who transfers his or her rights to a contract to a third party?

A)Assignor
B)Relator
C)Transfere e
D)?Assignee
E)Transfero r

Question 25

What is the term for the third party who receives an assignment of contract rights?

A)Assignor
B)Assignee
C)Transfero r
D)?Relator
E)Transfere e

Question 26

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

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

Question 27

Jimmy and Penny enter into a contract.Jimmy transfers his rights under the contract to Luis.Luis is an:

A)Relator
B)Transfero r
C)Assignor
D)Transfere e
E)?Assignee

Question 28

What is the most likely outcome when an assignment is made in violation of an antiassignment clause?

A)The court will refer to the statute of frauds to determine the effectiveness of the assignment.
B)The court will always prohibit assignment.
C)The court will never prohibit assignment.
D)The court will allow assignment always unless it is against public policy.
E)The court will treat the assignment as a breach of contract.

Question 29

Which statement is true with respect to whether a contract may be assigned even 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.

Question 30

Which of the following,if any,is needed in order for an assignment to be valid?

A)UCC 4-305 Form
B)UCC 2-301 Form
C)No form is required.
D)Business 2-547 Form
E)Business 4-298 Form

Question 31

Sally and Matteo enter into a contract in which Matteo agrees to paint a picture of a ship and Sally promises to pay $100 to Matteo for the painting.Matteo paints the picture of a ship,but assigns the right to collect payment of the $100 to Felipe.Is Matteo's assignment legally valid?

A)No because the right to payment can never be assigned.
B)No,because the contract was one for personal service.
C)Yes,because the rights to payment can always be assigned.
D)No,because it would increase the burden on Sally to pay Felipe instead of Matteo.
E)Yes,because the contract was not one for personal services.

Question 32

Carrie and Clayton enter into a contract.Carrie transfers her rights under the contract to Tamir.What is this transfer of rights called?

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

Question 33

Sally and Matteo enter into a contract in which Matteo,a professional painter,agrees to paint a picture of a ship and Sally promises to pay $100 to Matteo for the painting.Sally pays Matteo $100 but he delegates the painting job to his next door neighbor.Is Matteo's delegation legally valid?

A)No,because it would increase the burden on Sally to pay Felipe instead of Matteo.
B)No,because the duties under the contract were personal in nature.
C)No because obligations under a contract can never be delegated.
D)Yes,because the contract was not one for personal services.
E)Yes,because obligations under a contract can always be assigned.

Question 34

Ned and Trayvon enter into a contract for Ned to buy goods from Trayvon.The contract contains an antiassignment clause.Ned breaches the contract to pay for the goods after Trayvon delivers the items as required by contract.Trayvon does not want to sue for breach,so instead he assigns the right to pursue damages for breach of contract to Melissa.Is the assignment valid?

A)Yes,but only if the assignment complies with the statute of frauds.
B)No,because it would increase Ned's duties to have to pay Melissa.
C)No,because the antiassignment clause prohibits the assignment.
D)Yes,because antiassignment clauses are no longer valid if any part of the contract is not performed
E)Yes,because antiassignment clauses do not affect the right to receive damages for breach of contract to sell goods or services.

Question 35

Theresa agrees to mow Huan's yard for $300 for the summer.Huan wishes to assign the contract to his grandmother.Theresa objects because Huan's yard is very small while his grandmother's yard is over an acre.Which of the following is the correct legal outcome for the dispute between Theresa and Huan?

A)Theresa will win because all assignments are invalid without the obligor's consent.
B)Theresa will win because Huan's attempted assignment would increase the duties to which she agreed.
C)Huan will win so long as he tells Theresa about the assignment prior to the time she begins any performance whatsoever.
D)Theresa will win unless Huan paid her the $300 in advance in which case Huan will win.
E)Huan will win because he may validly assign the contract without Theresa's consent.

Question 36

Which of the following is true of an attempt to assign the rights to payment?

A)The rights to payments can only be assigned if a contract is created under the statute of frauds.
B)The rights to payment can only be assigned if a contract is personal in nature.
C)The rights to payment can never be assigned if a contract is personal in nature.
D)The rights to payment can never be assigned.
E)The rights to payment can always be assigned.

Question 37

Jimmy and Penny enter into a contract.Jimmy transfers his rights under the contract to Luis.Jimmy is an:

A)Relator
B)Assignor
C)Transfero r
D)?Transfere e
E)?Assignee

Question 38

How do courts generally treat antiassignment clauses?

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 39

Which statement below is NOT true with respect to the rights of an assignee and assignor?

A)Assignees essentially fill in for the assignor as the legal recipient of contractual duties.
B)Assignees are offered more protection than assignors.
C)When an assignor transfers rights to an assignee,the assignor legally gives up all rights he or she previously had to collect on the contract.
D)The obligor may raise any of the same defenses for nonperformance against the assignee that he would have been able to raise against the assignor.
E)Assignees acquire the same contractual duties that were held by the assignor.

Question 40

Which of the following is NOT an example of contractual rights that cannot be assigned?

A)Rights whose assignment is prohibited by public policy.
B)Rights whose assignment is prohibited by contract.
C)Rights that are personal in nature.
D)Rights to recover damage after a breach of contract.
E)Rights whose assignment would increase the obligor's risk or duties.

Question 41

Which of the following is true regarding assignment of rights in China?

A)Free assignment of rights is permitted only when a contract with a private party is involved unless the contract is one considered "for the good of the people."
B)Free assignment of rights is permitted only when a contract with a state authority is involved.
C)Assignment of rights is illegal.
D)When a private party is involved,the assignor must first get the obligor's approval before an assignment is made.
E)Free assignment of rights is permitted.

Question 42

The party who makes the promise that benefits the third party is the ________ in a third-party beneficiary contract.

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

Question 43

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?

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 44

Luis contracts with Molly to wash her car and then delegates the duty to Paul.Paul fails to wash the car.Which of the following is true regarding Luis's duty to Molly,if any?

A)Luis has no duty to Molly so long as she did not expressly object to the delegation.
B)Luis continues to be bound to Molly to see that her car gets washed.
C)Luis has no duty to Molly regardless of whether she objected to the delegation.
D)Luis continues to be bound to Molly to see that her car gets washed unless he already paid Paul for the job.
E)Luis continues to be bound to Molly to see that her car gets washed only if the contract expressly prohibited delegation.

Question 45

Which of the following are types of intended beneficiaries?

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 46

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?

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 47

A[n] ________ beneficiary is a third party to a contract who is intended to be benefited directly from the contract made by the contracting parties.

A)Ancillary
B)Incidenta l
C)?Preferred
D)Intended
E)Collateral

Question 48

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

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 49

When a party to a contract transfers his or her duty to perform to a third party who is not part of the original contract,a[n] ________ occurs.

A)Assignment
B)Performance
C)Delegation
D)Transfer
E)Unenforceable occurrence

Question 50

Which of the following was the result in the case in the text Wesley Locke v.Ozark City Board of Education,in which an umpire was injured by an angry parent and sued,claiming that he was an intended third-party beneficiary of a contract between defending board of education and the Alabama High School Athletic Association concerning police protection which the umpire claimed was required but not provided?

A)The case was remanded for trial on the issue of whether adequate police protection was provided in view of the fact that the plaintiff was an intended third-party beneficiary to the contract between the school board and the athletic association.
B)The umpire won as a matter of law because although he was not an intended third-party beneficiary to the contract between the defending school board and the athletic association,the defendant had an absolute nondelegable duty to provide protection ensuring that no one was hurt.
C)The defending school board won as a matter of law because the umpire was not an intended third-party beneficiary to the contract.
D)The umpire won as a matter of law because he was an intended third-party beneficiary to the contract between the defending school board and the athletic association,and the defendant had an absolute nondelegable duty to provide protection ensuring that no one was hurt.
E)The defending school board won as a matter of law because although the umpire was an intended third-party beneficiary to the contract,only the athletic association could proceed with a lawsuit.

Question 51

Simone assigned her rights under a contract to Juan.Forgetting that she took this action,she later assigns her rights under the contract to Kai.Both Juan and Kai try to claim the right to the contract.The state gives Juan the rights.Which rule did the state apply?

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

Question 52

Leila and Bradford enter into a contract in which Bradford will pay Leila to mow his lawn and Leila will mow the lawn weekly.Leila has to move far away and cannot mow,but she transfers her duty to mow Bradford's lawn to Ursula.This is an example of:

A)Unenforceable occurrence
B)Delegation
C)Performance
D)Transfer
E)Assignment

Question 53

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] .

A)Delegator
B)Assignee
C)Assignor
D)Transfero r
E)?Delegate e

Question 54

When does an assignment become effective?

A)After a reasonable delay to allow time for the obligee to object.
B)At the time period specified in the assignment of rights.
C)After notice is given.
D)After a reasonable delay to allow time for the obligor to object.
E)Immediately.

Question 55

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.

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

Question 56

Which of the following is true of notice of an assignment?

A)Notice is not required for a valid assignment,but is a good idea.
B)Notice must be provided either in writing or orally for an assignment to be valid.
C)Assignments are not effective until notice is given.
D)Notice is required for an assignment to be valid.
E)Notice must be provided in writing for an assignment to be valid.

Question 57

Kurt and Jennifer have an agreement that Jennifer will buy Kurt's house.Later Jennifer verbally assigns the right to buy the house to Kristi,one of Kurt's former girlfriends.When Kristi shows up with the money,Kurt says "No way! You ditched me to date Rick.I'm not ever letting you get anything from me!" Which of the following is true in regard to the dispute between Kurt and Kristi?

A)Kristi cannot enforce the assignment because it was not in writing.
B)Kristi can enforce the assignment only if the agreement that Kurt and Jennifer had was in writing.
C)Kristi can enforce the assignment.
D)Kristi cannot enforce the assignment because Kurt did not specifically grant Jennifer the power to assign the contract.
E)Kristi cannot enforce the assignment because assignments to purchase property cannot ever be assigned for public policy reasons.

Question 58

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?

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 59

When two parties enter into a contract with the intended end purpose of benefiting a third party,a[n] ________ is created.

A)First-party beneficiary
B)Third-party beneficiary
C)Creditor Beneficiary
D)Second-party beneficiary
E)Assignment

Question 60

A party to a contract who transfers his or her duty to perform to a third party who is not part of the original contract is called a[n] ________.

A)Assignor
B)Transfero r
C)?Delegator
D)Delegate e
E)?Assignee

Question 61

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

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 62

A donee beneficiary may enforce rights under a contract only against the _ .

A)Assignee
B)Obligor
C)Promisee
D)Initial contracting parties
E)Promisor

Question 63

Which of the following is true regarding the rights of an incidental beneficiary to a contract to sue to recover incidental rights?

A)An incidental beneficiary may sue to enforce incidental contractual rights only if the incidental beneficiary was once a creditor beneficiary.
B)An incidental beneficiary may sue to enforce incidental contractual rights only if the incidental beneficiary is also a second-party beneficiary.
C)An incidental beneficiary cannot sue to enforce a contract which provided incidental benefits.
D)An incidental beneficiary may sue to enforce incidental contractual rights so long as those rights have vested.
E)An incidental beneficiary may sue to enforce incidental contractual rights only if the incidental beneficiary was once a donee beneficiary.

Question 64

Which statement is true regarding Jamal's claim that he had no duty to pick up the paint cans?

A)Jamal is incorrect because his delegation did not affect his obligation to Stephanie.
B)Jamal is correct because he validly delegated that duty to Greg.
C)Jamal is incorrect,but only because the job was for under $1,000.
D)Jamal is correct only because Greg properly painted the house and was,therefore,responsible for ancillary obligations.If Greg had improperly painted the house,Jamal would have still had remaining duties.
E)Jamal is incorrect because the job was for the performance of a personal service,and he had no right to assign either rights or duties under the contract.

Question 65

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

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

Question 66

What would be the most likely result if Justin sues Gabby for the $10,000 payment?

A)Justin will win unless Gabby can prove that Justin knew that she did not want him to do the portraits.
B)Justin will lose unless Justin can prove that he was unaware that Gabby did not want him to do the portraits.
C)Gabby will win because the portrait was personal in nature and could not be assigned.
D)Justin will lose because Gabby's only obligation is to pay Tori.
E)Justin will win only if Justin did a good job on the portraits.

Question 67

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

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 68

Halle and Rose enter into a contract in which Rose agrees to sell her property to Halle so Halle can build a hotel.Maria owns the restaurant next door and will benefit from the opening of the hotel because it will bring in many new customers.Rose subsequently breaches the contract so Halle cannot but the property and build the hotel.Can Maria sue Rose for breach of contract?

A)Yes,because Maria was an intentional beneficiary to the contract.
B)Only if Halle does not sue.
C)Yes,because Maria was an intended beneficiary to the contract.
D)Only if Halle also sues.
E)No,because Maria was an incidental beneficiary to the contract.

Question 69

The Case Opener involved a lawsuit by fans seeking a refund based on the fact that the Tyson and Holyfield fight was stopped in the third round because Tyson bit off a piece of Holyfield's ear.What was the ruling of the court?

A)The fans were not allowed to recover because they were donee beneficiaries.
B)The fans were allowed to recover because they were creditor beneficiaries.
C)The fans were not allowed to recover because they were assigned donees.
D)The fans were allowed to recover because they were intended third-party beneficiaries.
E)The fans were not allowed to recover because they were incidental beneficiaries.

Question 70

Which of the following is a true statement regarding an assignee's acceptance of assigned rights?

A)An assignee must agree to accept assigned rights,and there is a strict protocol for doing so.
B)A creditor beneficiary must accept assignment of rights,but there is no requirement that a donee beneficiary do so.
C)An assignee may only decline an assignment if a delegation of duties is also involved.
D)A donee beneficiary must accept assignment of rights,but there is no requirement that a creditor beneficiary do so.
E)An assignee may decline an assignment if he has not agreed to it and declines in a timely fashion after learning of it.

Question 71

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.

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

Question 72

Which of the following is true regarding Stephanie's statement to Jamal that he had no right to assign the contract?

A)Stephanie is incorrect because the contract was not for the performance of a personal service,and there was no requirement that the contract specifically reference the right to assign rights and duties.
B)Stephanie is correct because a delegation,as well as an assignment,was involved.
C)Stephanie is correct because a personal service was involved.
D)Stephanie is correct because the contract did not specifically give Jamal the right to assign the contract.
E)Stephanie is incorrect only because the contract and assignment were for an amount under $1,000.Otherwise,Jamal had no right to assign the contract without her permission.

Question 73

A[n] ________ beneficiary is one who unintentionally gains a benefit from a contract between other parties.

A)Creditor
B)Donee
C)Accident al
D)?Incidenta l
E)?Vested

Question 74

The state of New York does not grant a donee beneficiary the right to enforce a contract unless the promisee is connected to the donee through a ________ relationship.

A)Valid
B)Marital
C)Recognized
D)Familial
E)Substantial

Question 75

[Painted House] Jamal had a contract to paint Stephanie's house for $800.His contractual obligations included cleaning up any debris.The contract between Jamal and Stephanie did not in any way address assignment.Jamal,who was very busy,assigned the contract to Greg who was interested in making some extra money and had experience painting.Jamal specified that the contract included the duty to paint the house and the right to receive the money.Jamal did not tell Stephanie about the assignment because he did not want any trouble.Greg also did not mention the assignment to Stephanie.In fact,Greg never met Stephanie because he painted her house while she was at work.After Greg did a good job painting the house,Stephanie sent a check to Jamal for $800.Jamal needed the money to pay some bills,so he spent it.He thought he would have money coming in with which to pay Greg,but that did not happen.Greg asked Stephanie for $800 when it was not forthcoming from Jamal.Stephanie refused.Greg said that he was going to sue her.Stephanie called Jamal and told him that he had no right to assign the contract.In addition,there was another problem involving the disposal of debris.Although Greg was a good,competent painter,he forgot and left some old paint cans at Stephanie's house.Stephanie demanded that Jamal come and properly dispose of the paint cans because they could not simply be put in the trash.Jamal refused and told her that she would have to get Greg to dispose of the paint cans because that was his responsibility.Stephanie called Greg who told her that he was busy and that clearing out the paint cans was Jamal's responsibility.
What would be the likely result of a lawsuit brought by Greg against Stephanie to recover the $800?

A)Stephanie will win because she had no notice that the contract had been assigned and could,therefore,legally satisfy her obligations by paying Jamal.
B)Stephanie will win only so long as the assignment was for an amount over $500.
C)Greg will win only so long as the assignment was for an amount under $1,000.
D)Greg will win only so long as Jamal has not been declared bankrupt because Stephanie will be able to recover the amounts at issue from Jamal.
E)Greg will win because Stephanie accepted the risk that the contract would be assigned.

Question 76

[Third-Party Woes] Jaya owed Bobby $40 for a book she purchased from him.Jaya mowed Laura's yard for$40 and made an agreement with Laura that Laura would pay Bobby for the book.Bobby was not aware of the assignment.Laura did not pay anyone.Jaya also mowed Ken's yard for $40.She agreed with Ken that Ken would give the payment to Bianca,representing Jaya's birthday present to Bianca.Ken later refuses to do so,saying that promises to give gifts are not enforceable.Ken then moved out of town.Jaya told both Bobby and Bianca that she was broke and that they would have to recover any amounts due directly from from Laura and Ken respectively.Bianca was very unhappy because she wanted to buy a new pair of sandals with the money.
Which of the following would be the likely result if Bobby sues Jaya for the $40 she owes him for the book?

A)Bobby will win but only because he was not aware of the assignment.
B)Jaya will win because she delegated the duty of payment to Laura.
C)Bobby will win only if Laura cannot be found for service of process.
D)Bobby will win because Jaya cannot avoid her obligations through a delegation.
E)Bobby will win but only because the contract was for an amount under $1,000.

Question 77

When can an assignee decline an assignment?

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 78

What would be the most likely result if Justin sues Harry for the $4,000 payment?

A)Justin will win because the right to receive payment could be validly assigned.
B)Harry will win because the portrait was personal in nature and payment for it could not be assigned.
C)Justin will lose unless Justin can prove that he was unaware that Harry did not want the benefits assigned.
D)Harry will win because he did not expressly agree to the assignment.
E)Justin will win unless Harry can prove that Justin knew that Harry did not want the benefits assigned.

Question 79

[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?

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 80

Creditor beneficiaries can enforce their rights under a contract whenever the contract is ________.

A)Valid
B)Fair
C)Substantial
D)Recognizable
E)Incidental