Exam 16: Third Parties to Contracts

Article 9 of the UCC makes ineffective any term in a contract prohibiting the assignment of a security interest arising out of a sale of any right to payment for goods sold.

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

Under Article 2 of the UCC,a right to damages for breach of the whole contract can be assigned despite a contractual provision to the contrary.

When the rights under a contract are highly personal,they are not assignable.

Discuss the revocability of assignments.

When contract terms prohibiting the assignment of rights exist,most courts will:

A gratuitous assignment is revocable by the assignor.

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.

Assignments that materially increase the risk,duty,or burden on the obligor will nonetheless remain effective and enforceable.

In an assignment or delegation,the third parties' rights or duties arise after the contract is made.

Annette entered into a contract with a local truck dealer to have a new truck delivered to her daughter,Sue,as a graduation present.In this contract,Sue is:

In general,an assignment includes an implied warranty that the assignor who receives value will do nothing to defeat or impair the assignment once it is delivered.

An assignee's assent is required for any assignment to be valid.

Anita owes Brad $75,000.Brad signs a written statement granting Carl a gratuitous assignment of his rights from Anita.If Brad delivers the signed statement to Carl before he dies:

Which of the following involves an invalid assignment that a court would not enforce?

A partial assignment is a transfer of a portion of the contractual rights to one or more assignees.

A party delegating his duty to a third party is known as a delegator.

An incidental beneficiary has no right to enforce a contract.

If Randall and Gale agree to an assignment of Randall's contract with Doug:

Contract rights are generally assignable.