Question 1

The delegation of a duty still leaves the delegator responsible for the performance of the duty.

Accepted Answer

A) True 
 B)False

Question 2

An obligor may assert rights of setoff arising out of entirely separate matters that he might have against the assignor,as long as the matters arose before he had notice of the assignment.

Accepted Answer

A) True 
 B)False

Question 3

Donee beneficiaries and incidental beneficiaries are called intended beneficiaries.

Accepted Answer

A) True 
 B)False

Question 4

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 5

In England and in a minority of states,the first of two or more assignees to give notice to the obligor is entitled to the assigned performance.

Accepted Answer

A) True 
 B)False

Question 6

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 7

If a contract explicitly provides that it may be assigned,then rights under it are assignable even if the assignment would change the duty,risk,or burden of performance on the obligor.

Accepted Answer

A) True 
 B)False

Question 8

Will wants to buy a new car.He goes to the bank to get a loan for the purchase,and signs an agreement to pay $10 per month in premiums on a term life insurance policy which names the bank as the recipient of the policy proceeds in the event of his death before the loan is repaid.The bank is a(n):

Accepted Answer

A) incidental beneficiary. 
B) creditor beneficiary. 
C) donee beneficiary. 
D) assignee. 
A) incidental beneficiary. 
B) creditor beneficiary. 
C) donee beneficiary. 
D) assignee.

Question 9

Third party rights in contracts can arise by assignment of rights,delegation of duties,or in third party beneficiary contracts.

Accepted Answer

A) True 
 B)False

Question 10

Professor Doright has a life insurance policy on his own life that provides that in the event of his death,his mother will receive the proceeds.Professor Doright's mother is a(n):

Accepted Answer

A) incidental beneficiary. 
B) creditor beneficiary. 
C) donee beneficiary. 
D) assignee. 
A) incidental beneficiary. 
B) creditor beneficiary. 
C) donee beneficiary. 
D) assignee.

Question 11

In a third-party beneficiary contract,the third party's rights arise at the time the contract is formed.

Accepted Answer

A) True 
 B)False

Question 12

In the case of Speelman v.Pascal,the court 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 13

Anita owes Brad $75,000.Brad signs a written statement granting Cal a gratuitous assignment of his rights from Anita.If Brad dies prior to delivering the statement to Cal:

Accepted Answer

A) Brad's death has no effect on the assignment. 
B) the assignment is terminated upon Brad's death. 
C) the signing of the statement makes the assignment irrevocable. 
D) the assignment is invalid, because it is gratuitous. 
A) Brad's death has no effect on the assignment. 
B) the assignment is terminated upon Brad's death. 
C) the signing of the statement makes the assignment irrevocable. 
D) the assignment is invalid, because it is gratuitous.

Question 14

Which of the following is NOT true concerning the requirements for an effective assignment?

Accepted Answer

A) The assignment must be voluntary. 
B) Consideration is required. 
C) There must be an intention to make the assignee the owner of the right. 
D) The assignment may be either written or oral. 
A) The assignment must be voluntary. 
B) Consideration is required. 
C) There must be an intention to make the assignee the owner of the right. 
D) The assignment may be either written or oral.

Question 15

When a partial assignment is made,the obligor may require all the parties entitled to the promised performance to litigate in one action any issues concerning the contract performance.

Accepted Answer

A) True 
 B)False

Question 16

In which of the following situations is there a third party incidental beneficiary who would be unable to enforce the agreement?

Accepted Answer

A) Wholesalers, when the buyer of a business promises the seller that he will pay outstanding debts to wholesalers who have supplied inventory for the business. 
B) Workers, where a contractor agrees to post a performance bond to assure payment of workers and material suppliers. 
C) A debtor, where a new partner enters an accounting firm and agrees to pay a share of debts incurred prior to his admission to the firm. 
D) A doctor, when an automobile accident policy states that the insurance company will reimburse the insured for medical expenses incurred as a result of an automobile accident. 
A) Wholesalers, when the buyer of a business promises the seller that he will pay outstanding debts to wholesalers who have supplied inventory for the business. 
B) Workers, where a contractor agrees to post a performance bond to assure payment of workers and material suppliers. 
C) A debtor, where a new partner enters an accounting firm and agrees to pay a share of debts incurred prior to his admission to the firm. 
D) A doctor, when an automobile accident policy states that the insurance company will reimburse the insured for medical expenses incurred as a result of an automobile accident.

Question 17

A duty may not be delegated if there is an express provision in a contract against delegation.

Accepted Answer

A) True 
 B)False

Question 18

Hiram,when he assigns to Tim his right to receive the next four rent payments on an apartment he owns,warrants that the tenant will make the assigned payments to Tim.

Accepted Answer

A) True 
 B)False

Question 19

Under the Restatement,if there are successive assignments of the same right:

Accepted Answer

A) the first assignee to notify the obligor prevails. 
B) the latest assignee is usually entitled to the assigned right. 
C) a prior assignee is entitled to the assigned right to the exclusion of a subsequent assignee in most circumstances. 
D) a subsequent assignee is entitled to the assigned right unless a prior assignee gave value and obtains either a judgment against the obligor or a new contract with the obligor. 
A) the first assignee to notify the obligor prevails. 
B) the latest assignee is usually entitled to the assigned right. 
C) a prior assignee is entitled to the assigned right to the exclusion of a subsequent assignee in most circumstances. 
D) a subsequent assignee is entitled to the assigned right unless a prior assignee gave value and obtains either a judgment against the obligor or a new contract with the obligor.

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 delegation of a duty still leaves the delegator responsible for the performance of the duty.

An obligor may assert rights of setoff arising out of entirely separate matters that he might have against the assignor,as long as the matters arose before he had notice of the assignment.

Donee beneficiaries and incidental beneficiaries are called intended beneficiaries.

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

In England and in a minority of states,the first of two or more assignees to give notice to the obligor is entitled to the assigned performance.

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

If a contract explicitly provides that it may be assigned,then rights under it are assignable even if the assignment would change the duty,risk,or burden of performance on the obligor.

Will wants to buy a new car.He goes to the bank to get a loan for the purchase,and signs an agreement to pay $10 per month in premiums on a term life insurance policy which names the bank as the recipient of the policy proceeds in the event of his death before the loan is repaid.The bank is a(n):

Third party rights in contracts can arise by assignment of rights,delegation of duties,or in third party beneficiary contracts.

Professor Doright has a life insurance policy on his own life that provides that in the event of his death,his mother will receive the proceeds.Professor Doright's mother is a(n):

In a third-party beneficiary contract,the third party's rights arise at the time the contract is formed.

In the case of Speelman v.Pascal,the court held that:

Anita owes Brad $75,000.Brad signs a written statement granting Cal a gratuitous assignment of his rights from Anita.If Brad dies prior to delivering the statement to Cal:

Which of the following is NOT true concerning the requirements for an effective assignment?

When a partial assignment is made,the obligor may require all the parties entitled to the promised performance to litigate in one action any issues concerning the contract performance.

In which of the following situations is there a third party incidental beneficiary who would be unable to enforce the agreement?

A duty may not be delegated if there is an express provision in a contract against delegation.

Hiram,when he assigns to Tim his right to receive the next four rent payments on an apartment he owns,warrants that the tenant will make the assigned payments to Tim.

Under the Restatement,if there are successive assignments of the same right:

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 and 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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