Question 1

Which of the following is not a third-partybeneficiary contract?

Accepted Answer

A)  a contract in which A hires B to give A's niece piano lessons 
B)  a contract to repair sewers in front of Macy's Department Store 
C)  a life insurance contract with a named beneficiary 
D)  a contract between X and Y for Y to install a new door on Z's home 
A)  a contract in which A hires B to give A's niece piano lessons 
B)  a contract to repair sewers in front of Macy's Department Store 
C)  a life insurance contract with a named beneficiary 
D)  a contract between X and Y for Y to install a new door on Z's home

Question 2

Whenever a contract is intended to benefit a third person,this person is referred to as a delegator.

Accepted Answer

A) True 
 B)False

Question 3

A third person does not have the status of an intended third-party beneficiary unless it is clear at the time the contract was formed that the parties intended to impose a direct obligation with respect to the third person.

Accepted Answer

A) True 
 B)False

Question 4

Persons who are not a party to a contract can never sue on the contract.

Accepted Answer

A) True 
 B)False

Question 5

An incidental beneficiary of a contract:

Accepted Answer

A)  can sue to enforce the contract. 
B)  cannot sue to enforce the contract. 
C)  is a beneficiary specifically named in the contract. 
D)  is an assignee of the direct beneficiary. 
A)  can sue to enforce the contract. 
B)  cannot sue to enforce the contract. 
C)  is a beneficiary specifically named in the contract. 
D)  is an assignee of the direct beneficiary.

Question 6

An assignee's rights are the same as those that had been possessed by the assignor.

Accepted Answer

A) True 
 B)False

Question 7

The party making an assignment is called the:

Accepted Answer

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

Question 8

In a contract in which a tenant borrowed money from a bank for the purpose of adding a bathroom to her apartment,the landlord is:

Accepted Answer

A)  a direct beneficiary. 
B)  in privity of contract with the tenant. 
C)  a third-party beneficiary. 
D)  an incidental beneficiary. 
A)  a direct beneficiary. 
B)  in privity of contract with the tenant. 
C)  a third-party beneficiary. 
D)  an incidental beneficiary.

Question 9

An assignment:

Accepted Answer

A)  is a contract. 
B)  requires consideration. 
C)  is a transfer of rights. 
D)  is not enforceable. 
A)  is a contract. 
B)  requires consideration. 
C)  is a transfer of rights. 
D)  is not enforceable.

Question 10

If the obligor is notified in any manner that there has been an assignment and that any money due must be paid to the assignee,the obligor's obligation can be discharged only by making payment to the assignee.

Accepted Answer

A) True 
 B)False

Question 11

The beneficiary of a life insurance policy is not subject to any policy restrictions that had been agreed to between the insured and the insurance company.

Accepted Answer

A) True 
 B)False

Question 12

Janet Jones sold the assets and liabilities of her coin-operated laundry to Kevin Katz for $10,000.The assets of the business included all of the washers and dryers.The liabilities included the amounts still owing on seven new dryers,which had been purchased recently from Dryer Company under an installment contract.Katz agreed to make the installment payments on the new dryers as they came due.After Katz failed to make an installment payment when it was due,Dryer Company sued Jones.Jones claimed she no longer was liable.How will the court decide?

Accepted Answer

Judgment will be for Dryer Company.The s

Question 13

The making of an assignment relieves the assignor of any and all obligations existing under the original contract.

Accepted Answer

A) True 
 B)False

Question 14

When a municipality contracts with a contractor to pave a street,homeowners on that block are third-party beneficiaries of the contract.

Accepted Answer

A) True 
 B)False

Question 15

Generally,it is easiest to assign:

Accepted Answer

A)  credit. 
B)  personal services. 
C)  money. 
D)  all of the above. 
A)  credit. 
B)  personal services. 
C)  money. 
D)  all of the above.

Question 16

The assignments of the right to money always gives the assignee the right to collect and keep the funds.

Accepted Answer

A) True 
 B)False

Question 17

If there is a time limitation or any other restriction in a contract,a third-party beneficiary:

Accepted Answer

A)  may ignore it. 
B)  may void it. 
C)  is bound thereby. 
D)  must consent to be bound thereby before it is effective. 
A)  may ignore it. 
B)  may void it. 
C)  is bound thereby. 
D)  must consent to be bound thereby before it is effective.

Question 18

When a buyer assigns the right to goods under a contract,the buyer's liability to make payment to the seller is:

Accepted Answer

A)  transferred to the third party. 
B)  terminated. 
C)  still in effect. 
D)  shared equally with the third party. 
A)  transferred to the third party. 
B)  terminated. 
C)  still in effect. 
D)  shared equally with the third party.

Question 19

A third-party beneficiary contract may be amended:

Accepted Answer

A)  with the consent of the beneficiary. 
B)  by operation of law. 
C)  if the contract allows modifications without the beneficiary's consent. 
D)  all of the above. 
A)  with the consent of the beneficiary. 
B)  by operation of law. 
C)  if the contract allows modifications without the beneficiary's consent. 
D)  all of the above.

Question 20

A third-party beneficiary:

Accepted Answer

A)  may be obligated to pay for services rendered. 
B)  may bring suit on and enforce the contract. 
C)  must consent to the contract. 
D)  must be identified by name. 
A)  may be obligated to pay for services rendered. 
B)  may bring suit on and enforce the contract. 
C)  must consent to the contract. 
D)  must be identified by name.

Exam 18: Third Persons and Contracts

Which of the following is not a third-partybeneficiary contract?

Whenever a contract is intended to benefit a third person,this person is referred to as a delegator.

A third person does not have the status of an intended third-party beneficiary unless it is clear at the time the contract was formed that the parties intended to impose a direct obligation with respect to the third person.

Persons who are not a party to a contract can never sue on the contract.

An incidental beneficiary of a contract:

An assignee's rights are the same as those that had been possessed by the assignor.

The party making an assignment is called the:

In a contract in which a tenant borrowed money from a bank for the purpose of adding a bathroom to her apartment,the landlord is:

An assignment:

If the obligor is notified in any manner that there has been an assignment and that any money due must be paid to the assignee,the obligor's obligation can be discharged only by making payment to the assignee.

The beneficiary of a life insurance policy is not subject to any policy restrictions that had been agreed to between the insured and the insurance company.

The making of an assignment relieves the assignor of any and all obligations existing under the original contract.

When a municipality contracts with a contractor to pave a street,homeowners on that block are third-party beneficiaries of the contract.

Generally,it is easiest to assign:

The assignments of the right to money always gives the assignee the right to collect and keep the funds.

If there is a time limitation or any other restriction in a contract,a third-party beneficiary:

When a buyer assigns the right to goods under a contract,the buyer's liability to make payment to the seller is:

A third-party beneficiary contract may be amended:

A third-party beneficiary:

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