Question 1

Both intended and incidental beneficiaries acquire legal rights in a contract.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

A valid delegation of duties relieves the delegator of the obligation to perform under the contract.

Accepted Answer

A) True 
 B)False

Question 4

Marco and Fred enter into a contract for the sale of Marco's apartment for which Fred agrees to pay him $100,000. Marco cannot prohibit Fred from transferring his right to the ownership of the apartment because such a prohibition is

Accepted Answer

A)  against public policy. 
B)  immoral. 
C)  unconscionable. 
D)  a crime.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Delany & Sons, Inc., owes Evermore Bank $50,000. Delany enters into a contract with Floyd under which Delany promises to manage and oversee Floyd's Seaside Marina. Under the contract, Floyd promises to pay Evermore the amount that will be due Delany until his debt to Evermore is paid. Delany performs as promised, but Floyd does not pay the bank. Can Evermore succeed in a suit against Floyd? Why or why not?

Accepted Answer

The answer of Delany & Sons, Inc., owes Evermore Bank...

Question 7

Pat, a world famous musician and composer, agrees to give ten piano les?sons to Quinn in exchange for $1,000. Pat's attempt to delegate his con?tract to Ruth, an in?experienced pianist, will probably be

Accepted Answer

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 Pat and Ruth have very different skill levels.

Question 8

Robert enters into a contract with Claire. Claire agrees to paint Robert's living room for $500. Claire is the

Accepted Answer

A)  obligor. 
B)  obligee. 
C)  assignee. 
D)  assignor.

Question 9

Fact Pattern 16-1 
Four-Square Construction Company enters into a contract with Ben to remodel Carol's Home Store, using products from Delta Building Supplies. Eatery Café is next to Carol's Home Store. The remodeling is a gift from Ben to Carol.
-Refer to Fact Pattern 16-1. Carol is

Accepted Answer

A)  a delegatee. 
B)  an assignee. 
C)  an incidental beneficiary. 
D)  an intended beneficiary.

Question 10

A delegator is a party who transfers his or her obligation under a contract to another party.

Accepted Answer

A) True 
 B)False

Question 11

An assignee has a right to demand performance from the obligor.

Accepted Answer

A) True 
 B)False

Question 12

Fact Pattern 16-1 
Four-Square Construction Company enters into a contract with Ben to remodel Carol's Home Store, using products from Delta Building Supplies. Eatery Café is next to Carol's Home Store. The remodeling is a gift from Ben to Carol.
-Refer to Fact Pattern 16-1. The value of Eatery's property will increase after Carol's store is remodeled. Eatery is

Accepted Answer

A)  a delegatee. 
B)  an assignee. 
C)  an incidental beneficiary. 
D)  an intended beneficiary.

Question 13

The rights of a third party bene?ficiary under a contract vest if the third party materially changes his or her position in justifiable reliance on the promise.

Accepted Answer

A) True 
 B)False

Question 14

An incidental beneficiary can sue directly to enforce a promisor's promise.

Accepted Answer

A) True 
 B)False

Question 15

As long as a contract is personal in nature, all rights under the contract can be assigned.

Accepted Answer

A) True 
 B)False

Question 16

Devon and Edmond enter into a contract for the closing of a sale of Devon's recording studio. When Edmond's schedule conflicts, he asks Ferdie to perform his duties at the closing. This transfer of duties is

Accepted Answer

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

Question 17

Lyle and Miranda agree that Lyle will fix the refrigeration unit in Miranda's Buns n' Burgers in exchange for her payment of a debt that Lyle owes to New Credit Corporation. New Credit is

Accepted Answer

A)  a delegate. 
B)  an intended beneficiary. 
C)  an incidental beneficiary. 
D)  an assignor.

Question 18

Grady and Hannah contract with Isaac to transfer the ownership of Grady and Hannah's Mesa Ranch to Isaac. This is

Accepted Answer

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

Question 19

An assignment of rights in real estate often cannot be prohibited.

Accepted Answer

A) True 
 B)False

Question 20

App Developers, Inc. (ADI), enters into a contract with Carmen, the chief executive officer of SalesCorp, to create an app for the firm. To fulfill the contract, ADI hires Max and ten other student interns. With respect to the contract, Max is

Accepted Answer

A)  an intended beneficiary. 
B)  an incidental beneficiary. 
C)  a delegatee. 
D)  an assignee.

Exam 16: Third Party Rights

Both intended and incidental beneficiaries acquire legal rights in a contract.

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

A valid delegation of duties relieves the delegator of the obligation to perform under the contract.

Marco and Fred enter into a contract for the sale of Marco's apartment for which Fred agrees to pay him $100,000. Marco cannot prohibit Fred from transferring his right to the ownership of the apartment because such a prohibition is

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

Pat, a world famous musician and composer, agrees to give ten piano les?sons to Quinn in exchange for $1,000. Pat's attempt to delegate his con?tract to Ruth, an in?experienced pianist, will probably be

Robert enters into a contract with Claire. Claire agrees to paint Robert's living room for $500. Claire is the

Fact Pattern 16-1 Four-Square Construction Company enters into a contract with Ben to remodel Carol's Home Store, using products from Delta Building Supplies. Eatery Café is next to Carol's Home Store. The remodeling is a gift from Ben to Carol. -Refer to Fact Pattern 16-1. Carol is

A delegator is a party who transfers his or her obligation under a contract to another party.

An assignee has a right to demand performance from the obligor.

The rights of a third party bene?ficiary under a contract vest if the third party materially changes his or her position in justifiable reliance on the promise.

An incidental beneficiary can sue directly to enforce a promisor's promise.

As long as a contract is personal in nature, all rights under the contract can be assigned.

Devon and Edmond enter into a contract for the closing of a sale of Devon's recording studio. When Edmond's schedule conflicts, he asks Ferdie to perform his duties at the closing. This transfer of duties is

Lyle and Miranda agree that Lyle will fix the refrigeration unit in Miranda's Buns n' Burgers in exchange for her payment of a debt that Lyle owes to New Credit Corporation. New Credit is

Grady and Hannah contract with Isaac to transfer the ownership of Grady and Hannah's Mesa Ranch to Isaac. This is

An assignment of rights in real estate often cannot be prohibited.

App Developers, Inc. (ADI) , enters into a contract with Carmen, the chief executive officer of SalesCorp, to create an app for the firm. To fulfill the contract, ADI hires Max and ten other student interns. With respect to the contract, Max is