Exam 16: Third Party Rights

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Equity Company and Faye enter into a contract for Faye to cater a meeting of Equity's shareholders. When Faye's schedule conflicts, she asks Gudren to serve Faye's coffee and pastries at the meeting. This transfer of duties is

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Question 1

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Evergreen Landscapers, Inc., owes Friendly Finance Company $5,000. Evergreen enters into a contract with Suburban Office Park under which Evergreen promises to maintain the landscaping on Suburban's property. Under the contract, Suburban promises to pay Friendly Finance the amount that will be due Evergreen until Evergreen's debt to Friendly Finance is paid. Evergreen performs as promised, but Suburban does not pay Friendly Finance. Can Friendly Finance succeed in a suit against Suburban Why or why not

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Friendly Finance could succeed in a suit against Suburban. When a party promises to perform under a contract with the express in tent that the other party's payment benefit a third party, the third party is a creditor beneficiary. Assuming a contract is otherwise enforceable, a creditor beneficiary can successfully sue to enforce the contract to which he or she is a third party. The contract between Evergreen and Suburban ex pressly states that Suburban's payment for Evergreen's performance is to go directly to Friendly Finance. Thus, it is a third party beneficiary con tract. Friendly Finance, the third party beneficiary, is, under the terms of the contract, a creditor beneficiary. As such, Friendly Finance can success fully sue Suburban to enforce Suburban's promise to pay Evergreen's debt.

When rights under a contract are assigned unconditionally, the rights of the assignor are extinguished.

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When the parties to a contract agree that its performance should directly benefit a third person, the third person is an intended third party beneficiary.

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Question 4

Joaquin wants to transfer his right to the payment of his wages under an employment contract with Free-Flo Plumbing Company to Inez. In most states, this transfer

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Question 5

An "assignment of all rights" creates an assignment of rights but not a delegation of duties.

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Question 6

Phaedra and Raul contract with Sheldon to transfer the ownership of their lake cottage to him. This is

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Question 7

Loren and Kendra enter into a contract for the distribution of Loren's produce to local restaurants for which he agrees to pay Kendra. Kendra transfers her right to payment under the contract to County Bank. This transfer is

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Question 8

If a contract requires that performance be rendered directly to a third party, the third party is an incidental beneficiary.

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Question 9

Jordan and Isabel enter into a contract under which Jordan agrees to cater Isabel's wedding in exchange for $5,000. The contract can expressly prohibit and prevent the transfer of

(Multiple Choice)

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Question 10

Joy and Kris enter into a contract for Kris to lay sod in Joy's yard for which she agrees to pay Kris. When Kris's schedule conflicts, she contacts Leza, to whom Kris "assigns all rights under the contract." Kris is

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Question 11

An intended third party beneficiary can sue a promisor directly for breach of contract.

(True/False)

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Question 12

A creditor beneficiary benefits from a contract in which one party promises another to pay a debt that the promisee owes to a third party.

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Question 13

The vesting of contractual rights in a third party terminates the right of the original parties to change the contract.

(True/False)

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Question 14

Consumers Credit Company is a creditor beneficiary in a deal that involves Devon and Elena. Consumers Credit, like most creditor beneficiaries, is

(Multiple Choice)

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Question 15

Dale signs a contract with Everbest Insurance Company that intentionally confers a benefit on Flo as the designated beneficiary. Flo's rights under the contract will vest

(Multiple Choice)

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Question 16

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

(True/False)

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Question 17

Nick contracts for the sale of this year's strawberry crop to Phoenix, with payment to go to Rural Cooperative Association. The contract reserves to Nick and Phoenix the right to modify its terms. Rural Cooperative's right to payment is

(Multiple Choice)

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Question 18

Linus and Marlena agree that Linus will fix Marlena's roof in exchange for $8,000. Linus spends half of the amount due under the contract to acquire the materials for the job from Natural Roofing Supplies. Natural Roofing is

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Question 19

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

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Question 20

Showing 1 - 20 of 42

Exam 16: Third Party Rights

Equity Company and Faye enter into a contract for Faye to cater a meeting of Equity's shareholders. When Faye's schedule conflicts, she asks Gudren to serve Faye's coffee and pastries at the meeting. This transfer of duties is

When rights under a contract are assigned unconditionally, the rights of the assignor are extinguished.

When the parties to a contract agree that its performance should directly benefit a third person, the third person is an intended third party beneficiary.

Joaquin wants to transfer his right to the payment of his wages under an employment contract with Free-Flo Plumbing Company to Inez. In most states, this transfer

An "assignment of all rights" creates an assignment of rights but not a delegation of duties.

Phaedra and Raul contract with Sheldon to transfer the ownership of their lake cottage to him. This is

Loren and Kendra enter into a contract for the distribution of Loren's produce to local restaurants for which he agrees to pay Kendra. Kendra transfers her right to payment under the contract to County Bank. This transfer is

If a contract requires that performance be rendered directly to a third party, the third party is an incidental beneficiary.

Jordan and Isabel enter into a contract under which Jordan agrees to cater Isabel's wedding in exchange for $5,000. The contract can expressly prohibit and prevent the transfer of

Joy and Kris enter into a contract for Kris to lay sod in Joy's yard for which she agrees to pay Kris. When Kris's schedule conflicts, she contacts Leza, to whom Kris "assigns all rights under the contract." Kris is

An intended third party beneficiary can sue a promisor directly for breach of contract.

A creditor beneficiary benefits from a contract in which one party promises another to pay a debt that the promisee owes to a third party.

The vesting of contractual rights in a third party terminates the right of the original parties to change the contract.

Consumers Credit Company is a creditor beneficiary in a deal that involves Devon and Elena. Consumers Credit, like most creditor beneficiaries, is

Dale signs a contract with Everbest Insurance Company that intentionally confers a benefit on Flo as the designated beneficiary. Flo's rights under the contract will vest

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

Nick contracts for the sale of this year's strawberry crop to Phoenix, with payment to go to Rural Cooperative Association. The contract reserves to Nick and Phoenix the right to modify its terms. Rural Cooperative's right to payment is

Linus and Marlena agree that Linus will fix Marlena's roof in exchange for $8,000. Linus spends half of the amount due under the contract to acquire the materials for the job from Natural Roofing Supplies. Natural Roofing is

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

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