Question 1

The UCC prohibits assignments of $5,000 or more.

Accepted Answer

A) True 
 B)False

Question 2

UCC Article 2 provides that, unless circumstances indicate otherwise, a contract term prohibiting "assignment of the contract" bars both the assignment of rights and the delegation of duties.

Accepted Answer

A) True 
 B)False

Question 3

Theresa has a contract to teach eighth grade at Washington Middle School.She decided she could make more money writing a book, so she assigns her teaching contract to her friend, Stephanie, who is also a licensed teacher.

Accepted Answer

A) This is both an assignment and a delegation. 
B) The duties, which Theresa has delegated, are personal in nature. 
C) If the school district agrees to accept Stephanie's services, a novation would occur, which would relieve Theresa of her obligation to the school district. 
D) All of the above are correct. 
A) This is both an assignment and a delegation. 
B) The duties, which Theresa has delegated, are personal in nature. 
C) If the school district agrees to accept Stephanie's services, a novation would occur, which would relieve Theresa of her obligation to the school district. 
D) All of the above are correct.

Question 4

A(n) __________ is a third party who obtains possible benefits but no rights under a contract.

Accepted Answer

A) incidental beneficiary 
B) intended beneficiary 
C) assignor 
D) donee beneficiary 
A) incidental beneficiary 
B) intended beneficiary 
C) assignor 
D) donee beneficiary

Question 5

Jeff's promise to marry Margaret cannot be transferred to a third party.

Accepted Answer

A) True 
 B)False

Question 6

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 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) All of the above. 
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 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) All of the above.

Question 7

When the assignee gives consideration in exchange for an assignment, there is a contract between the assignor and the assignee that prevents the assignor from revoking the assignment without the assent of the assignee.

Accepted Answer

A) True 
 B)False

Question 8

A(n) __________ is an intended beneficiary of a contract who receives the benefits of the contract as a gift.

Accepted Answer

A) incidental beneficiary 
B) intended beneficiary 
C) assignor 
D) donee beneficiary 
A) incidental beneficiary 
B) intended beneficiary 
C) assignor 
D) donee beneficiary

Question 9

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

Question 10

Carlos, a contractor, and Lyle, a landowner, have a contract whereby Carlos is to perform routine construction services according to the blueprints that Lyle has provided.Carlos assigns the contract to David, a developer.As a result of this assignment:

Accepted Answer

A) Lyle can bring suit based upon detrimental reliance. 
B) Carlos has no more rights or responsibilities with regard to the contract. 
C) Carlos no longer has any rights under the contract, but he remains responsible for the duties he agreed to perform. 
D) Carlos has all of his rights under the contract, but he has no responsibility for the performance of the duties. 
A) Lyle can bring suit based upon detrimental reliance. 
B) Carlos has no more rights or responsibilities with regard to the contract. 
C) Carlos no longer has any rights under the contract, but he remains responsible for the duties he agreed to perform. 
D) Carlos has all of his rights under the contract, but he has no responsibility for the performance of the duties.

Question 11

Some states have statutes prohibiting an employee from assigning his future wages.

Accepted Answer

A) True 
 B)False

Question 12

Barbara owes Arthur $2,000.On July 1, Arthur assigns the right to the $2,000 to Maud.Thereafter, on July 15, Arthur assigns the same right to Derek, who in good faith gives value for it and knows nothing about the first assignee.In this case:

Accepted Answer

A) Maud has the right to the payment of $2,000. 
B) Derek has the right to the $2,000. 
C) neither Maud nor Derek can claim the $2,000. 
D) the rule differs in different states.Depending on which rule a state follows, the answer will vary. 
A) Maud has the right to the payment of $2,000. 
B) Derek has the right to the $2,000. 
C) neither Maud nor Derek can claim the $2,000. 
D) the rule differs in different states.Depending on which rule a state follows, the answer will vary.

Question 13

The Speelman v.Pascal case held that:

Accepted Answer

A) a gratuitous assignment is terminated by the assignor's death, even if the assignor made an effective delivery of the assignment prior to his death. 
B) assignments of rights to sums that are expected to become due to the assignor are enforceable. 
C) assignments cannot be made of sums that are not presently due but are expected to become due in the future. 
D) personal contracts are not assignable. 
A) a gratuitous assignment is terminated by the assignor's death, even if the assignor made an effective delivery of the assignment prior to his death. 
B) assignments of rights to sums that are expected to become due to the assignor are enforceable. 
C) assignments cannot be made of sums that are not presently due but are expected to become due in the future. 
D) personal contracts are not assignable.

Question 14

In some states, the vesting of a third party's rights occurs only when the third party learns of the contract and assents to it.

Accepted Answer

A) True 
 B)False

Question 15

Heather owes Joe $2,000.On July 1, Joe assigns the debt to Noah.Thereafter on July 15, Joe assigns the same right to Deb, who in good faith gives value for it and knows nothing about the first assignee.Deb immediately notifies Heather of the assignment.Under:

Accepted Answer

A) the majority rule, Deb has priority. 
B) the English Rule, a second assignment of the same claim can never be effective. 
C) the English Rule, Deb has priority. 
D) all of the rules, Noah has priority since he was the first assignee in time. 
A) the majority rule, Deb has priority. 
B) the English Rule, a second assignment of the same claim can never be effective. 
C) the English Rule, Deb has priority. 
D) all of the rules, Noah has priority since he was the first assignee in time.

Question 16

Contract rights are generally assignable.

Accepted Answer

A) True 
 B)False

Question 17

The obligor must receive notice in order for an assignment to be valid.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is true about the vesting of an intended beneficiary's rights?

Accepted Answer

A) The promisor and promisee may provide that the benefits will never vest. 
B) States are consistent in their rules as to when vesting occurs. 
C) Vesting cannot require the third party to change position in reliance on the promise made for his benefit. 
D) Regardless of whether an intended beneficiary's rights have vested, the promisor and promisee may, by later agreement, vary those rights. 
A) The promisor and promisee may provide that the benefits will never vest. 
B) States are consistent in their rules as to when vesting occurs. 
C) Vesting cannot require the third party to change position in reliance on the promise made for his benefit. 
D) Regardless of whether an intended beneficiary's rights have vested, the promisor and promisee may, by later agreement, vary those rights.

Question 20

To protect the obligor or the public interest, some contract rights are not assignable.

Accepted Answer

A) True 
 B)False

Exam 16: Third Parties to Contracts

The UCC prohibits assignments of $5,000 or more.

UCC Article 2 provides that, unless circumstances indicate otherwise, a contract term prohibiting "assignment of the contract" bars both the assignment of rights and the delegation of duties.

Theresa has a contract to teach eighth grade at Washington Middle School.She decided she could make more money writing a book, so she assigns her teaching contract to her friend, Stephanie, who is also a licensed teacher.

A(n) __________ is a third party who obtains possible benefits but no rights under a contract.

Jeff's promise to marry Margaret cannot be transferred to a third party.

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

When the assignee gives consideration in exchange for an assignment, there is a contract between the assignor and the assignee that prevents the assignor from revoking the assignment without the assent of the assignee.

A(n) __________ is an intended beneficiary of a contract who receives the benefits of the contract as a gift.

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

Carlos, a contractor, and Lyle, a landowner, have a contract whereby Carlos is to perform routine construction services according to the blueprints that Lyle has provided.Carlos assigns the contract to David, a developer.As a result of this assignment:

Some states have statutes prohibiting an employee from assigning his future wages.

Barbara owes Arthur $2,000.On July 1, Arthur assigns the right to the $2,000 to Maud.Thereafter, on July 15, Arthur assigns the same right to Derek, who in good faith gives value for it and knows nothing about the first assignee.In this case:

The Speelman v.Pascal case held that:

In some states, the vesting of a third party's rights occurs only when the third party learns of the contract and assents to it.

Heather owes Joe $2,000.On July 1, Joe assigns the debt to Noah.Thereafter on July 15, Joe assigns the same right to Deb, who in good faith gives value for it and knows nothing about the first assignee.Deb immediately notifies Heather of the assignment.Under:

Contract rights are generally assignable.

The obligor must receive notice in order for an assignment to be valid.

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

Which of the following is true about the vesting of an intended beneficiary's rights?

To protect the obligor or the public interest, some contract rights are not assignable.

Introduction to Law

Business Ethics

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Performance, Breach, and Discharge

Contract Remedies

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer

Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

Environmental Law

International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Wills

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