Question 1

A contracting party who, unknown to the other party, is represented by an agent, is called

Accepted Answer

A)  a collateral agent. 
B)  a secondary agent. 
C)  a principal. 
D)  an undisclosed principal. 
E)  a collateral principal.

Question 2

Mary sets up a trust fund for her children. The money is placed into an account with Kids Money an organization that looks after money belonging to children. Which of the following is true?

Accepted Answer

A)  Mary needs to find another impartial adult to review the arrangement before she can revoke it. 
B)  Mary has no authority over the money. 
C)  The children for whom the arrangement has been set up can go to Kids Money and request that the money be given to them. 
D)  Mary cannot revoke the arrangement without the consent of the children. 
E)  Mary can revoke the arrangement without the consent of the children.

Question 3

The right to tangible property that can be possessed is known as

Accepted Answer

A)  equitable assignment. 
B)  assignment of rights. 
C)  chattel property rights 
D)  a chose in possession. 
E)  a chose in action.

Question 4

Which of the following is not an example of an exception to the privity of contract rule?

Accepted Answer

A)  the undisclosed principal in an agency 
B)  a life insurance policy 
C)  collateral contracts 
D)  bilateral contracts 
E)  the trust

Question 5

Mary gives Jack an amount of money to be used to look after her children while she is away. Jack is the legal owner of the money given to him.

Accepted Answer

A) True 
 B)False

Question 6

The statement that an assignee "takes subject to the equities" between the parties means:

Accepted Answer

A)  the assignee gets no greater rights against the debtor/promisor than the assignor had 
B)  the court must decide whether it is fairer for the assignor or the assignee to be paid under the assignment 
C)  before an assignee can enforce an assignment against the debtor/promisor it must demonstrate fairness 
D)  for the assignment to be enforced it must be an equitable assignment 
E)  the debtor/promisor can enforce any rights it has against the assignor against the assignee

Question 7

Mary sets up a trust fund for her children. The money is placed into an account with Kids Money and organization that looks after money belonging to children. Mary cannot revoke the arrangement without the consent of the children.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is true?

Accepted Answer

A)  A novation occurs when the parties to a contract agree to terminate it and substitute a new contract. 
B)  A novation occurs where one party leaves a contract and his or her place is taken by another person. 
C)  A novation occurs where parties to a contract change the subject matter of a contract. 
D)  C only 
E)  A, B, & C

Question 9

A receiving order is used in

Accepted Answer

A)  bankruptcy proceedings 
B)  legal proceedings for breach of a sales agreement where the promisee is to receive products from another. 
C)  proceedings involving negotiable instruments as a defence to an action on the negotiable instrument. 
D)  negotiations. 
E)  tort proceedings.

Question 10

To be effective, notice of an assignment must be given to the promisor.

Accepted Answer

A) True 
 B)False

Question 11

A novation occurs

Accepted Answer

A)  when two parties agree to terminate a contract and substitute a new contract. 
B)  when a contract is amended by agreement between the parties. 
C)  when a novel or new situation arises and the terms of a contract are changed. 
D)  when a stranger to the contract is permitted to obtain rights under the contract. 
E)  when a stranger to a contract enters into a new agreement with the parties that permits him or her to obtain rights under the original contract.

Question 12

Mary wants to be able to take care of her sons when she is away. She decides to give an amount of money to a friend, Melanie, with the instructions that she is to use that money to care for the children when she is away. Melanie is called a _ and the children are called _ .

Accepted Answer

A)  caretaker; trustees 
B)  guardian; trustees 
C)  money caretaker; beneficiaries 
D)  trustee; beneficiaries 
E)  constructive trust; beneficiaries

Exam 12: Privity of Contract and the Assignment of Contractual Rights

A contracting party who, unknown to the other party, is represented by an agent, is called

Mary sets up a trust fund for her children. The money is placed into an account with Kids Money an organization that looks after money belonging to children. Which of the following is true?

The right to tangible property that can be possessed is known as

Which of the following is not an example of an exception to the privity of contract rule?

Mary gives Jack an amount of money to be used to look after her children while she is away. Jack is the legal owner of the money given to him.

The statement that an assignee "takes subject to the equities" between the parties means:

Mary sets up a trust fund for her children. The money is placed into an account with Kids Money and organization that looks after money belonging to children. Mary cannot revoke the arrangement without the consent of the children.

Which of the following is true?

A receiving order is used in

To be effective, notice of an assignment must be given to the promisor.

A novation occurs

Mary wants to be able to take care of her sons when she is away. She decides to give an amount of money to a friend, Melanie, with the instructions that she is to use that money to care for the children when she is away. Melanie is called a _ and the children are called _ .