Deck 16: Third Party Rights

Question 1

An incidental third party beneficiary can sue directly to enforce the contract.

Answer 1

False

Question 2

A donee beneficiary cannot sue a promisor directly for breach of contract.

Answer 2

False

Question 3

When the parties to a contract agree that its performance should directly benefit a third person,the third person is an intended third party beneficiary.

Answer 3

True

Question 4

If a contract requires that performance be rendered directly to a third party,the third party is an incidental beneficiary.

Question 5

An "as?signment of all rights" creates an assignment of rights but not a delegation of duties.

Question 6

A contract can prevent an assignment of a right to receive funds.

Question 7

When rights under a contract are assigned unconditionally,the rights of the assignor are extinguished.

Question 8

Any beneficiary who is not deemed an intended beneficiary is considered incidental.

Question 9

If a third party has the right to control the details of contract performance,the third party is an incidental beneficiary.

Question 10

In a bilateral contract,a party who makes a promise that benefits a third party is a promisor.

Question 11

Alienation is a transfer of the ownership of land.

Question 12

An assignee's rights are free of the defenses that the obligor has against the assignor.

Question 13

An assignment is effective only after notice is given to the obligor.

Question 14

The vesting of contractual rights in a third party terminates the right of the original parties to change the contract.

Question 15

Oral assignments are prohibited.

Question 16

Contract duties cannot be assigned but they can be delegated.

Question 17

An intended third party beneficiary can sue a promisor directly for breach of contract.

Question 18

The person to whom rights in a contract are assigned is the assignor.

Question 19

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

Question 20

A creditor beneficiary benefits from a contract in which one party promises another to pay a debt that the promisee owes to a third party.

Question 21

Ralph and Sven enter into a contract under which Sven agrees to guide Ralph's expedition through Tibet for which Ralph agrees to pay Sven.This contract may not be assigned if

A)the assignment will significantly change the risk of nonperformance.
B)the assignment is expressly prohibited by the terms of the contract.
C)the contract is uniquely personal in nature.
D)any of the choices.

Question 22

Peri,a world famous musician and composer,agrees to give ten piano les?sons to Quinn in exchange for $1,000.Peri's attempt to transfer her contract duties to Roth,an in?experienced pianist,will probably be

A)permitted because contracts may be freely delegated.
B)permitted because the contract is concerned with music lessons.
C)prohibited because contracts may not be freely delegated.
D)prohibited because Peri and Roth have very different skill levels.

Question 23

Joy and Kris enter into a contract for Kris to lay sod in Joy's yard for which she agrees to pay Kris.When Kris's schedule conflicts,she contacts Leza,to whom Kris "assigns all rights under the contract." Kris is

A)absolved of any liability under the contract.
B)in breach of the contract with Joy.
C)liable to Joy if Leza does not perform.
D)liable to Leza for inducing a prohibited contract.

Question 24

Phaedra and Raul contract with Sheldon to transfer the ownership of their lake cottage to him.This is

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

Question 25

Dwayne and Ewell enter into a contract for the design of an addition to Dwayne's house for which he agrees to pay Ewell.Ewell transfers his right to payment under the contract to Flex Construction Company.Flex is

A)a delegatee.
B)an assignee.
C)an obligee.
D)an alien.

Question 26

Linus and Marlena agree that Linus will fix Marlena's roof in exchange for $8,000.Linus spends half of the amount due under the contract to acquire the materials for the job from Natural Roofing Supplies.Natural Roofing is

A)a delegatee.
B)an intended beneficiary.
C)an incidental beneficiary.
D)an alien to the contract.

Question 27

Consumers Credit Company is a creditor beneficiary in a deal that involves Devon and Elena.Consumers Credit,like most creditor beneficiaries,is

A)a donee beneficiary.
B)an incidental beneficiary.
C)an intended beneficiary.
D)one of the original contracting parties.

Question 28

Trudy and Uri enter into a contract for the sale of Trudy's house for which Uri agrees to pay her $200,000.Uri wants to transfer his right to the ownership of the house to Val,his niece.This transfer

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

Question 29

Equity Company and Faye enter into a contract for Faye to cater a meeting of Equity's shareholders.When Faye's schedule conflicts,she asks Gudren to serve Faye's coffee and pastries at the meeting.This transfer of duties is

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

Question 30

Floyd and Gert enter into a contract by which Floyd promises to deliver fer?tilizer to Gert.Floyd subsequently transfers this duty to Hazel.Floyd is

A)a delegatee.
B)an obligee.
C)an obligor.
D)an assignee.

Question 31

Dale signs a contract with Everbest Insurance Company that intentionally confers a benefit on Flo as the designated beneficiary.Flo's rights under the contract will vest

A)automatically.
B)if she demonstrates her consent to the promise at Dale's request.
C)if Everbest attempts to modify the terms of the contract.
D)never.

Question 32

Vicky contracts with Rashad for the delivery of hospice services to benefit Sigmund.This is

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

Question 33

Jordan and Isabel enter into a contract under which Jordan agrees to cater Isabel's wedding in exchange for $5,000.The contract can expressly prohibit and prevent the transfer of

A)Jordan's right to receive funds.
B)Isabel's right to receive personal services.
C)no rights under the contract.
D)all rights under the contract.

Question 34

Lois takes out a life insurance policy with Mega Insurance Corporation that names her son,Nero,as the bene?ficiary.This is

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

Question 35

Joaquin wants to transfer his right to the payment of his wages under an employment contract with Free-Flo Plumbing Company to Inez.In most states,this transfer

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

Question 36

Nick contracts for the sale of this year's strawberry crop to Phoenix,with payment to go to Rural Cooperative Association.The contract reserves to Nick and Phoenix the right to modify its terms.Rural Cooperative's right to payment is

A)not affected by the reservation.
B)subject to any change that Nick and Phoenix make.
C)limited only if Rural Cooperative agrees to any changes.
D)terminated by the reservation.

Question 37

Esther and Faisal agree that Esther will fix Faisal's car in exchange for his paying a debt owed by Esther to Gladys.Gladys is

A)a delegatee.
B)an intended beneficiary.
C)an incidental beneficiary.
D)an alien to the contract.

Question 38

Jean Paul and Hermosa enter into a contract under which Jean Paul agrees to provide greensward services for Hermosa's Golf Links.Under an antidelegation clause,their contract can prohibit and prevent the transfer of

A)duties that are personal in nature.
B)duties that are impersonal in nature.
C)no duties under the contract.
D)all duties under the contract.

Question 39

Rural Development Corporation (RDC)and Sid enter into a contract for the clear-cutting of RDC's fifty-acre tract for which RDC agrees to pay Sid.Sid transfers his duty under this contract to Timber Logging Company.Timber is

A)a delegatee.
B)an assignee.
C)an obligee.
D)an alien.

Question 40

Loren and Kendra enter into a contract for the distribution of Loren's produce to local restaurants for which he agrees to pay Kendra.Kendra transfers her right to payment under the contract to County Bank.This transfer is

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

Question 41

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.

Question 42

Evergreen Landscapers,Inc.,owes Friendly Finance Company $5,000.Evergreen enters into a contract with Suburban Office Park under which Evergreen promises to maintain the landscaping on Suburban's property.Under the contract,Suburban promises to pay Friendly Finance the amount that will be due Evergreen until Evergreen's debt to Friendly Finance is paid.Evergreen performs as promised,but Suburban does not pay Friendly Finance.Can Friendly Finance succeed in a suit against Suburban? Why or why not?