Question 1

The person to whom rights in a contract are assigned is the assignor.

Accepted Answer

A) True 
 B)False

Question 2

Ian owes Jo $5,000. Jo assigns the right to this payment to Kyle. Notice by Jo to Ian of the assignment

Accepted Answer

A)  ​must be given immediately. 
B)  ​must be given within thirty days. 
C)  ​must be given within a reasonable time. 
D)  ​is not required. 
A)  ​must be given immediately. 
B)  ​must be given within thirty days. 
C)  ​must be given within a reasonable time. 
D)  ​is not required.

Question 3

Mai is a third party beneficiary under a contract between Novia and Opie. Novia and Opie can modify or rescind their contract without Mai's consent

Accepted Answer

A)  ​at any time. 
B)  ​at no time. 
C)  ​after Mai's rights have vested. 
D)  ​before Mai's rights have vested. 
A)  ​at any time. 
B)  ​at no time. 
C)  ​after Mai's rights have vested. 
D)  ​before Mai's rights have vested.

Question 4

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

Evermore could succeed in a suit against

Question 5

Logan borrows $150,000 from Ready Money Credit & Debit to buy new equipment for Logan's Steakhouse. When Logan does not pay the loan, Ready Money wants to transfers the right to the payment to Action Collection Agency. Action Collection agrees to pay Ready Money for this right, but for a price that is less than the amount owed. Can Ready Money transfer this right to Action Collection without Logan's consent? If so, and Ready Money committed fraud in the deal with Logan, could Logan legitimately refuse to pay Action Collection? Explain.

Accepted Answer

Ready Money can transfer the right to re

Question 6

A transfer of contract rights to a third party is an assignment.

Accepted Answer

A) True 
 B)False

Question 7

Illya owes Jenny $1,000. In a separate deal, Kasey owes Illya $1,000. Illya unconditionally assigns his rights in the deal with Kasey to Jenny. Illya's right to the $1,000 is then

Accepted Answer

A)  ​unchanged. 
B)  ​extinguished. 
C)  ​incidental. 
D)  ​assigned to a court. 
A)  ​unchanged. 
B)  ​extinguished. 
C)  ​incidental. 
D)  ​assigned to a court.

Question 8

An assignee's rights are subject to the defenses that the obligor has against the assignor.

Accepted Answer

A) True 
 B)False

Question 9

In most cases, a contract that prohibits its assignment cannot be assigned.

Accepted Answer

A) True 
 B)False

Question 10

The assignment of the same contract right to two different parties automatically cancels both assignments.

Accepted Answer

A) True 
 B)False

Question 11

In an assignment, the assignee obtains only those rights that the assignor had.

Accepted Answer

A) True 
 B)False

Question 12

All that a delegator needs to do to make a delegation effective is to express an intention to make the delegation.

Accepted Answer

A) True 
 B)False

Question 13

​Expressly designating a third party as a beneficiary in a contract does not indicate whether the beneficiary is intended or incidental.

Accepted Answer

A) True 
 B)False

Question 14

Faye makes and sells furniture. Faye and Glen enter into a contract for the delivery of Faye's products to Glen's Gear retail locations for which he agrees to pay the invoiced price. Faye transfers her right to payment under the contract to Haulers Trucking Company. This transfer is

Accepted Answer

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

Question 15

Bea takes out a life insurance policy with Vida Insurance Corporation that names her spouse Wendell as the beneficiary. This is

Accepted Answer

A)  a delegation. 
B)  ​an assignment. 
C)  ​a third party incidental beneficiary contract. 
D)  ​a third party intended beneficiary contract. 
A)  a delegation. 
B)  ​an assignment. 
C)  ​a third party incidental beneficiary contract. 
D)  ​a third party intended beneficiary contract.

Question 16

​Ozzie contracts for the sale of 500 shares of stock in Premium Quality, Inc., to Ray, with payment to go to Scholar University to pay Thalia's tuition. The contract reserves to Ozzie and Ray the right to modify its terms. Scholar's right to payment is

Accepted Answer

A)  ​not affected by the reservation. 
B)  ​subject to any change that Ozzie and Ray make. 
C)  ​limited only if Thalia agrees to any changes. 
D)  ​terminated by the reservation. 
A)  ​not affected by the reservation. 
B)  ​subject to any change that Ozzie and Ray make. 
C)  ​limited only if Thalia agrees to any changes. 
D)  ​terminated by the reservation.

Question 17

Paolho and Roth agree that Paolho will fix Roth's boat dock in exchange for $5,000. Paolho spends half of the amount due under the contract to acquire the materials for the job from Sav-U Economy Lumber. Sav-U is

Accepted Answer

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

Question 18

Hilda signs a contract with Indemnity Insurance Company that intentionally confers a benefit on Hilda's daughter Jackie as the designated beneficiary. Jackie's rights under the contract will vest

Accepted Answer

A)  ​automatically. 
B)  ​if she demonstrates her consent to the promise at Hilda's request. 
C)  ​if Indemnity attempts to modify the terms of the contract. 
D)  ​on the occurrence of the event for which the insurance was procured. 
A)  ​automatically. 
B)  ​if she demonstrates her consent to the promise at Hilda's request. 
C)  ​if Indemnity attempts to modify the terms of the contract. 
D)  ​on the occurrence of the event for which the insurance was procured.

Question 19

Lestor and MaryElise enter into a contract. Lestor agrees to mow MaryElise's yard every week for the summer. MaryElise is

Accepted Answer

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

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 17: Third Party Rights

The person to whom rights in a contract are assigned is the assignor.

Ian owes Jo $5,000. Jo assigns the right to this payment to Kyle. Notice by Jo to Ian of the assignment

Mai is a third party beneficiary under a contract between Novia and Opie. Novia and Opie can modify or rescind their contract without Mai's consent

A transfer of contract rights to a third party is an assignment.

Illya owes Jenny $1,000. In a separate deal, Kasey owes Illya $1,000. Illya unconditionally assigns his rights in the deal with Kasey to Jenny. Illya's right to the $1,000 is then

An assignee's rights are subject to the defenses that the obligor has against the assignor.

In most cases, a contract that prohibits its assignment cannot be assigned.

The assignment of the same contract right to two different parties automatically cancels both assignments.

In an assignment, the assignee obtains only those rights that the assignor had.

All that a delegator needs to do to make a delegation effective is to express an intention to make the delegation.

​Expressly designating a third party as a beneficiary in a contract does not indicate whether the beneficiary is intended or incidental.

Faye makes and sells furniture. Faye and Glen enter into a contract for the delivery of Faye's products to Glen's Gear retail locations for which he agrees to pay the invoiced price. Faye transfers her right to payment under the contract to Haulers Trucking Company. This transfer is

Bea takes out a life insurance policy with Vida Insurance Corporation that names her spouse Wendell as the beneficiary. This is

​Ozzie contracts for the sale of 500 shares of stock in Premium Quality, Inc., to Ray, with payment to go to Scholar University to pay Thalia's tuition. The contract reserves to Ozzie and Ray the right to modify its terms. Scholar's right to payment is

Paolho and Roth agree that Paolho will fix Roth's boat dock in exchange for $5,000. Paolho spends half of the amount due under the contract to acquire the materials for the job from Sav-U Economy Lumber. Sav-U is

Hilda signs a contract with Indemnity Insurance Company that intentionally confers a benefit on Hilda's daughter Jackie as the designated beneficiary. Jackie's rights under the contract will vest

Lestor and MaryElise enter into a contract. Lestor agrees to mow MaryElise's yard every week for the summer. MaryElise is

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

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Expressly designating a third party as a beneficiary in a contract does not indicate whether the beneficiary is intended or incidental.

Ozzie contracts for the sale of 500 shares of stock in Premium Quality, Inc., to Ray, with payment to go to Scholar University to pay Thalia's tuition. The contract reserves to Ozzie and Ray the right to modify its terms. Scholar's right to payment is