Question 1

In a creditor beneficiary situation,who are the parties to the contract that creates the creditor-beneficiary relations?

Accepted Answer

A)  the original debtor and the second-hand purchaser of the item connected with the debt 
B)  the original creditor and the second creditor 
C)  the original creditor and the original purchaser of the item connected with the debt 
D)  the original creditor and the second-hand purchaser of the item connected with the debt 
E)  the second creditor and the original purchaser of the item associated with the debt

Question 2

In order to be assignable,a contract usually must provide that the rights can be assigned.

Accepted Answer

A) True 
 B)False

Question 3

The Restatement (Second)of Contracts refers to both donee and creditor beneficiaries as intended beneficiaries.

Accepted Answer

A) True 
 B)False

Question 4

Why should the doctrine of commercial impracticability be applied to release a party from duties under a contract when it is still possible for the contract to be performed?

Accepted Answer

The answer of Why should the doctrine of commercial impracticability...

Question 5

All duties can be delegated as long as the delegator promises to guarantee performance.

Accepted Answer

A) True 
 B)False

Question 6

With a substituted contract,all duties under the original contract are discharged immediately upon the formation of the substituted contract.

Accepted Answer

A) True 
 B)False

Question 7

In order to be effective,a condition must be express.

Accepted Answer

A) True 
 B)False

Question 8

Under which of the following rules does the first assignment in time prevail regardless of notice?

Accepted Answer

A)  the English rule 
B)  the American rule 
C)  the tangible token rule 
D)  the priority in assignment rule 
E)  the European rule

Question 9

If the transfer of a contract to a third party contains only language of assignment,the modern view holds that there is a corresponding delegation of the duties of the contract.

Accepted Answer

A) True 
 B)False

Question 10

Usually,a person cannot assign a currently nonexistent right that he or she expects to have in the future.

Accepted Answer

A) True 
 B)False

Question 11

In Parker v.Arthur Murray,Inc.,Parker sued for a return of prepaid contractual funds based on impossibility of performance after a severe injury.How did the courts rule?

Accepted Answer

A)  Since the words NONCANCELABLE CONTRACT were prominently displayed on the contract, Parker was not entitled to rescind the contract. 
B)  Since the words NONCANCELABLE CONTRACT were hidden and obscurely placed within the contract, Parker was entitled to rescind the contract. 
C)  the injuries were considered a force majeure and the contract was discharged. 
D)  Parker's injury created a situation of commercial impracticability, discharging the contract as a result. 
E)  the NONCANCELABLE CONTRACT terms did not create a waiver of Parker's rights of discharge for impossibility of performance.

Question 12

With respect to the assignment of a contract right,which two roles are played by the same party with respect to the specific right and its assignment?

Accepted Answer

A)  the obligee and the obligor 
B)  the obligor and the assignor 
C)  the obligee and the assignor 
D)  the obligor and the assignee 
E)  the assignor and the assignee

Question 13

How is a creditor beneficiary relationship usually formed?

Accepted Answer

A)  a party buys a consumer good from a retail store and the retail store extends credit for the purchase 
B)  a party buys a good second-hand from someone who borrowed money to purchase the good, and the second-hand buyer promises to pay the remaining balance of the loan 
C)  a party purchases a good on credit, but the creditor requires a co-signer before the credit will be extended 
D)  a party purchases a good from the seller, but asks the seller to deliver it as a gift to a third person 
E)  a party borrows money from a bank prior to needing the funds to make the purchase

Question 14

Generally,no formalities are required for a valid assignment of rights.

Accepted Answer

A) True 
 B)False

Question 15

An obligor can raise the defenses of fraud,duress,undue influence,minority,insanity,illegality of the contract,mutual mistake,or payment by worthless check of the assignor against enforcement of the contract by the assignee.

Accepted Answer

A) True 
 B)False

Question 16

Bob and Sally have an agreement whereby Bob is to mow Sally's yard for $900 for the year.Bob's mower breaks down,and he decides he no longer wants to mow.Instead,he wants to paint.Bob talks to Sally who is not happy about the mowing issue.She tells Bob that it would cost her $1,000 to get the other lawn service in the community to do the mowing for the year.Bob offers to paint Sally's house to settle the dispute.Sally agrees.Bob never shows up to paint.Sally gets someone else to paint the house for $800 and sues Bob for not mowing her yard.Can Sally do so,or is Bob entitled to get the lawsuit involving mowing dismissed because if he breached any contract,it involved painting?

Accepted Answer

The answer of Bob and Sally have an agreement whereby...

Question 17

The insured under an insurance policy usually cannot assign her rights to another person.

Accepted Answer

A) True 
 B)False

Question 18

An incidental beneficiary has no rights to enforce or sue under other people's contracts.

Accepted Answer

A) True 
 B)False

Question 19

The transfer of contractual rights is called a delegation of rights.

Accepted Answer

A) True 
 B)False

Question 20

Sarah agrees to paint John's house for $5,000.After Sarah finishes the job,John complains that it was not done correctly.After much discussion,they agree that the contract will be satisfied if John gives Sarah $4,000 and a certain diamond necklace.Which of the following statements is true concerning this situation?

Accepted Answer

A)  This is an accord and satisfaction; if John fails to perform, Sarah can sue only for the $4,000 and the necklace. 
B)  This is an accord and satisfaction; if John fails to perform, Sarah can sue only for the $5,000 originally promised. 
C)  This is an accord and satisfaction; if John fails to perform, Sarah can sue to enforce either the original $5,000 or the $4,000 and the necklace. 
D)  This is a novation; if John fails to perform, Sarah can sue to enforce either promise. 
E)  This is a novation; only the last promise can be enforced.

Exam 13: Third-Party Rights and Discharge

In a creditor beneficiary situation,who are the parties to the contract that creates the creditor-beneficiary relations?

In order to be assignable,a contract usually must provide that the rights can be assigned.

The Restatement (Second)of Contracts refers to both donee and creditor beneficiaries as intended beneficiaries.

Why should the doctrine of commercial impracticability be applied to release a party from duties under a contract when it is still possible for the contract to be performed?

All duties can be delegated as long as the delegator promises to guarantee performance.

With a substituted contract,all duties under the original contract are discharged immediately upon the formation of the substituted contract.

In order to be effective,a condition must be express.

Under which of the following rules does the first assignment in time prevail regardless of notice?

If the transfer of a contract to a third party contains only language of assignment,the modern view holds that there is a corresponding delegation of the duties of the contract.

Usually,a person cannot assign a currently nonexistent right that he or she expects to have in the future.

In Parker v.Arthur Murray,Inc.,Parker sued for a return of prepaid contractual funds based on impossibility of performance after a severe injury.How did the courts rule?

With respect to the assignment of a contract right,which two roles are played by the same party with respect to the specific right and its assignment?

How is a creditor beneficiary relationship usually formed?

Generally,no formalities are required for a valid assignment of rights.

An obligor can raise the defenses of fraud,duress,undue influence,minority,insanity,illegality of the contract,mutual mistake,or payment by worthless check of the assignor against enforcement of the contract by the assignee.

The insured under an insurance policy usually cannot assign her rights to another person.

An incidental beneficiary has no rights to enforce or sue under other people's contracts.

The transfer of contractual rights is called a delegation of rights.