Question 1

A contract for decorating someone's home that contains a personal satisfaction test would allow the homeowner to judge the satisfaction based on the homeowner's own personal tastes,so long as the homeowner acted in good faith.

Accepted Answer

A) True 
 B)False

Question 2

A new contract entered into by the parties that revokes and discharges a prior contract is known as mutual rescission

Accepted Answer

A) True 
 B)False

Question 3

The City of Monroe enters into an oral contract with Allied Construction Co.to pave a gravel road.The gravel road passes in front of John's home.Once the road is paved,John's home would increase significantly in value.Allied fails to pave the gravel road.If John sued Allied for breach of contract,then:

Accepted Answer

A) John would prevail,because John is an intended third-party beneficiary. 
B) John would not prevail,because John is only an incidental third-party beneficiary. 
C) John would prevail,because he is a party to the contract and has privity. 
D) John would not prevail,because the Statute of Frauds applies.

Question 4

Under the American rule,when an assignor assigns the same right to more than one person,the first assignment in time prevails.

Accepted Answer

A) True 
 B)False

Question 5

A debtor who files for bankruptcy and receives a discharge from the federal bankruptcy court is relieved of the legal liability to pay the debts.

Accepted Answer

A) True 
 B)False

Question 6

Commercial impracticability will sometimes excuse performance if an unforeseeable event makes it impractical for the promisor to perform.

Accepted Answer

A) True 
 B)False

Question 7

The transfer of rights under a contract to a third party is called:

Accepted Answer

A) An assignment. 
B) An adjudication. 
C) A resolution. 
D) A delegation to an obligee.

Question 8

Assume that the players on the Colorado Rockies baseball team beach their contract by refusing to play the remainder of their games in the season.A restaurant located near Coors Field,where the games would have been played,sues the players.As a result:

Accepted Answer

A) The restaurant loses due to public policy. 
B) The restaurant loses because it is not an intended beneficiary of the players' contract. 
C) The restaurant wins as a third-party beneficiary. 
D) The restaurant wins under promissory estoppel.

Question 9

In a contract,a party can be both an obligor and an obligee.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following types of third-party beneficiaries can acquire enforceable rights under the original contract?

Accepted Answer

A) Incidental,donee,creditor. 
B) Incidental,donee. 
C) Creditor only. 
D) Donee only. 
E) Creditor,donee.

Question 11

The doctrines of commercial impracticability and frustration of purpose apply only to unforeseeable events.

Accepted Answer

A) True 
 B)False

Question 12

In an ordinary contract assignment,the assignee:

Accepted Answer

A) Acquires the rights of the assignor,but nothing more. 
B) Is released from liability. 
C) Assumes the assignor's duty by operation of law. 
D) Assumes no liability pursuant to the UCC.

Question 13

A contract contains a clause that states,"no part of this contract may be assigned or delegated."

Accepted Answer

A) Generally,this clause is unenforceable. 
B) Generally,this clause is enforceable. 
C) Some courts would rule that if the duty is totally impersonal,such as the payment of money,the clause would be unenforceable. 
D) A and C only. 
E) B and C only.

Question 14

Third parties never acquire rights under other people's contracts.

Accepted Answer

A) True 
 B)False

Question 15

Homeowner enters into an agreement with Grasscutter to cut the grass at Homeowner's house.The contract says nothing about delegation or assignment.Grasscutter gets a friend,Lawnmower to do the actual work.Which is true?

Accepted Answer

A) This is a breach of the original contract because Grasscutter was the person hired. 
B) This is an assignment by Grasscutter of his duty to cut the grass. 
C) Because the contract does not mention assignment or delegation,Grasscutter cannot have someone else perform his duty. 
D) Grasscutter can have Lawnmower do the work,but Grasscutter can be held responsible if Lawnmower does not do the work properly.

Question 16

A transfer of some portion of a contract's rights and corresponding duties means that:

Accepted Answer

A) Rights are assigned,duties are delegated. 
B) Duties are assigned,rights are delegated. 
C) Rights and duties are discharged. 
D) Rights and duties are never permitted to be assigned.

Question 17

Tenant has a lease on an apartment through December of the current year.Tenant and Newtenant go to Landlord to have Newtenant take over the lease through the end of December.Landlord agrees and releases Tenant from any responsibility under the lease.This is a(n):

Accepted Answer

A) Substituted contract. 
B) Accord and satisfaction. 
C) Novation. 
D) Mutual rescission.

Question 18

Barb has contracted to build a garage at Holly's house for Holly's 2001 Chrysler PT Cruiser.Before Barb begins work on the garage,the city where Holly lives outlaws the possession and driving of cars.On what basis could Holly get out of the contract?

Accepted Answer

A) Frustration of purpose. 
B) Commercial impracticability. 
C) Contrary to public policy. 
D) Past consideration. 
E) Intervening illegality.

Question 19

Robert leased an apartment from Universal Apartments for $600 per month,signing a 1-year lease.After 2 months,Robert's employer transferred him out-of-state,so Robert cannot use the apartment anymore.However,Robert's friend Sam would like to take over the apartment.Robert would like to assign his lease to Sam,but the lease contains a clause that allows assignment only with the consent of the landlord.The landlord refuses to consent to the assignment,because he could now end Robert's lease and rent the apartment for $800 per month.Sam would be just as good a tenant as Robert.Discuss the validity of the antiassignment clause.

Accepted Answer

The answer of Robert leased an apartment from Universal Apartments...

Question 20

An accord and satisfaction:

Accepted Answer

A) Usually arises in settlement of a dispute under the original contract. 
B) Involves a third party in the contract. 
C) Discharges the original contract's duties upon reaching the accord. 
D) Can come into existence even if only one party wants it.

Exam 7: Third-Party Rights and Discharge

A contract for decorating someone's home that contains a personal satisfaction test would allow the homeowner to judge the satisfaction based on the homeowner's own personal tastes,so long as the homeowner acted in good faith.

A new contract entered into by the parties that revokes and discharges a prior contract is known as mutual rescission

Under the American rule,when an assignor assigns the same right to more than one person,the first assignment in time prevails.

A debtor who files for bankruptcy and receives a discharge from the federal bankruptcy court is relieved of the legal liability to pay the debts.

Commercial impracticability will sometimes excuse performance if an unforeseeable event makes it impractical for the promisor to perform.

The transfer of rights under a contract to a third party is called:

Assume that the players on the Colorado Rockies baseball team beach their contract by refusing to play the remainder of their games in the season.A restaurant located near Coors Field,where the games would have been played,sues the players.As a result:

In a contract,a party can be both an obligor and an obligee.

Which of the following types of third-party beneficiaries can acquire enforceable rights under the original contract?

The doctrines of commercial impracticability and frustration of purpose apply only to unforeseeable events.

In an ordinary contract assignment,the assignee:

A contract contains a clause that states,"no part of this contract may be assigned or delegated."

Third parties never acquire rights under other people's contracts.

Homeowner enters into an agreement with Grasscutter to cut the grass at Homeowner's house.The contract says nothing about delegation or assignment.Grasscutter gets a friend,Lawnmower to do the actual work.Which is true?

A transfer of some portion of a contract's rights and corresponding duties means that:

Tenant has a lease on an apartment through December of the current year.Tenant and Newtenant go to Landlord to have Newtenant take over the lease through the end of December.Landlord agrees and releases Tenant from any responsibility under the lease.This is a(n) :

Barb has contracted to build a garage at Holly's house for Holly's 2001 Chrysler PT Cruiser.Before Barb begins work on the garage,the city where Holly lives outlaws the possession and driving of cars.On what basis could Holly get out of the contract?

An accord and satisfaction: