Question 1

Contract rights are generally assignable.

Accepted Answer

A) True 
 B)False

Question 2

A contract in which a party (the promisor) promises to render a certain performance not to the other party (the promisee) but to a third person (the beneficiary) is called a third-party beneficiary contract.

Accepted Answer

A) True 
 B)False

Question 3

Identify and define the following terms: assignor and assignee; delegator and delegatee; intended beneficiary, incidental beneficiary, creditor beneficiary.

Accepted Answer

The answer of Identify and define the following terms: assignor...

Question 4

Darrell owns a parcel of land that is encumbered by a mortgage held by the First National Bank. Darrell agrees to sell the land to Paul for $50,000. Darrell and Paul together go to the First National Bank to discuss the sale and purchase with the banker. Darrell, Paul, and the banker sign an agreement stating that Paul will assume the mortgage and that Darrell will be discharged from all further liability on the mortgage. In this case:

Accepted Answer

A)  the bank is a third party donee beneficiary. 
B)  the bank can collect from Darrell if Paul defaults. 
C)  Darrell is a third party beneficiary of the agreement between Paul and the bank. 
D)  the agreement among the three is a novation.

Question 5

Which one of the following assignments would probably be prohibited by a court?

Accepted Answer

A)  Mary is in debt. A credit card company calls and threatens to sue. Mary orally assigns her next bimonthly paycheck to her creditor. 
B)  John is a house painter. He is scheduled to paint Molly's home on Monday. John wakes up Monday morning with a stiff neck. He calls Ed, who is also a painter, to offer to pay him to begin the job at Molly's. 
C)  Ron has a contract with Bonett Bank to service their coffee machines. He assigns the remainder of his contract with Bonett to Michelle, who also owns a coffee service. 
D)  Max buys a used car from Al's Autos for $10,000, financed by Al.  Al needs quick cash and assigns the loan proceeds to Omar for $8,500 cash.  Max now makes his car loan payments to Omar.

Question 6

Which of the following duties would not be delegable?

Accepted Answer

A)  John has a contractual duty to pay Isaac $50. 
B)  Karl has a contractual duty to deliver 50 bushels of corn to Michael by October 1. 
C)  Jeffrey has a duty to mow Georgia's lawn at least once a week. 
D)  Arthur has a duty to teach an accounting class at a community college during the fall semester.

Question 7

Elvia has a contract to teach sixth grade at Margena Middle School. She decided she could make more money writing a book, so she wants to assign her teaching contract to her friend, Stephanie, who is also a licensed teacher.  Which of these statements is true?

Accepted Answer

A)  If effective, this would be both an assignment and a delegation. 
B)  The duties which Elvia wants to delegate are typically delegable to any teacher with the same level of certification. 
C)  If the school district agrees to accept Stephanie's services, a novation would occur, but  Elvia  would still have an obligation to the school district if Stephanie decides to quit. 
D)  This situation is only an assignment, as the obligation of duty will come from the school after the assignment is made.

Question 8

Assignment of rights is the voluntary transfer to a third party of the rights arising from a contract.

Accepted Answer

A) True 
 B)False

Question 9

Stark enters into a contract with a contractor to build a large shopping mall in River City. Donner will greatly benefit from this contract since his convenience store is adjacent to the mall. Donner in this instance is:

Accepted Answer

A)  an implied beneficiary. 
B)  a partial beneficiary. 
C)  a donee beneficiary. 
D)  an incidental beneficiary.

Question 10

UCC Article 9 requires certain assignments to be in writing.

Accepted Answer

A) True 
 B)False

Question 11

The Coastal Opera Company has a contract with a famous tenor to perform in its production of La Boheme . If the tenor chooses, he may delegate his duties under the contract to an equally well-known tenor.

Accepted Answer

A) True 
 B)False

Question 12

Courts will enforce contracts for the benefit of all but which of the following?

Accepted Answer

A)  Donee beneficiaries. 
B)  Creditor beneficiaries. 
C)  Incidental beneficiaries. 
D)  Intended beneficiaries.

Question 13

The privilege to play tennis and socialize at the Capital City Country Club (CCCC) is obtained through application, references, resumes, and fees. Steven and Chanel want to assign the remaining 4 years of their 5-year membership to Charles and Prissy so that Steven and Chanel may join the posh Silver Hawk Tennis and Polo Club. CCCC sues to enjoin Steven and Chanel from assigning their membership. CCCC will most probably:

Accepted Answer

A)  not prevail because all contract rights are assignable. 
B)  prevail because the parties intended the contract to be personal and non-assignable. 
C)  prevail because assigning the membership contract would violate public policy. 
D)  None of these.

Question 14

A duty may not be delegated if there is an express provision in a contract against delegation.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following involves an invalid assignment that a court would not enforce?

Accepted Answer

A)  An assignment of a savings account accompanied by the delivery of the passbook. 
B)  An assignment lacking consideration. 
C)  An assignment of an automobile liability insurance policy accompanied by the delivery of the policy. 
D)  An assignment in writing signed by the assignor and delivered to the assignee.

Question 16

A(n) __________ is a method of discharging a contract in which a third party becomes bound upon a promise to the obligee.

Accepted Answer

A)  assignment 
B)  delegation 
C)  partial assignment 
D)  novation

Question 17

List the implied warranties imposed by law on an assignor who has received value for the assignment.

Accepted Answer

The answer of List the implied warranties imposed by law...

Question 18

When a partial assignment is made, the obligor may require all the parties entitled to the promised performance to litigate in one action any issues concerning the contract performance.

Accepted Answer

A) True 
 B)False

Question 19

Anita owes Brad $75,000. Brad signs a written statement granting Carl a gratuitous assignment of his rights from Anita. If Brad delivers the signed statement to Carl before he dies:

Accepted Answer

A)  the delivery of the statement makes the assignment irrevocable. 
B)  the assignment is terminated upon Brad's death. 
C)  the signing of the statement makes the assignment irrevocable. 
D)  the assignment is invalid, because it is revocable.

Question 20

A gratuitous assignment is revocable even after the assignor has made an effective delivery of the assignment to the assignee.

Accepted Answer

A) True 
 B)False

Exam 16: Third Parties to Contracts

Contract rights are generally assignable.

A contract in which a party (the promisor) promises to render a certain performance not to the other party (the promisee) but to a third person (the beneficiary) is called a third-party beneficiary contract.

Identify and define the following terms: assignor and assignee; delegator and delegatee; intended beneficiary, incidental beneficiary, creditor beneficiary.

Which one of the following assignments would probably be prohibited by a court?

Which of the following duties would not be delegable?

Elvia has a contract to teach sixth grade at Margena Middle School. She decided she could make more money writing a book, so she wants to assign her teaching contract to her friend, Stephanie, who is also a licensed teacher. Which of these statements is true?

Assignment of rights is the voluntary transfer to a third party of the rights arising from a contract.

Stark enters into a contract with a contractor to build a large shopping mall in River City. Donner will greatly benefit from this contract since his convenience store is adjacent to the mall. Donner in this instance is:

UCC Article 9 requires certain assignments to be in writing.

The Coastal Opera Company has a contract with a famous tenor to perform in its production of La Boheme . If the tenor chooses, he may delegate his duties under the contract to an equally well-known tenor.

Courts will enforce contracts for the benefit of all but which of the following?

A duty may not be delegated if there is an express provision in a contract against delegation.

Which of the following involves an invalid assignment that a court would not enforce?

A(n) __________ is a method of discharging a contract in which a third party becomes bound upon a promise to the obligee.

List the implied warranties imposed by law on an assignor who has received value for the assignment.

When a partial assignment is made, the obligor may require all the parties entitled to the promised performance to litigate in one action any issues concerning the contract performance.

Anita owes Brad $75,000. Brad signs a written statement granting Carl a gratuitous assignment of his rights from Anita. If Brad delivers the signed statement to Carl before he dies:

A gratuitous assignment is revocable even after the assignor has made an effective delivery of the assignment to the assignee.