Question 1

A party who is owed a right under a contract is called an obligor.

Accepted Answer

A) True 
 B)False

Question 2

KnockKnock is a manufacturer of stainless steel locks that are well-known for their durability. The company contacts a new stainless steel supplier and enters into a supply contract. The contract states that KnockKnock would purchase only if the steel from the supplier was high-grade Type 102 stainless steel. This is an instance of a ________.

Accepted Answer

A)  condition subsequent 
B)  concurrent condition 
C)  covenant 
D)  condition precedent 
A)  condition subsequent 
B)  concurrent condition 
C)  covenant 
D)  condition precedent

Question 3

In the United States, sales contracts and contracts for the payment of money are not assignable.

Accepted Answer

A) True 
 B)False

Question 4

The reasonable person test is used to judge contracts involving mechanical fitness.

Accepted Answer

A) True 
 B)False

Question 5

Approval clauses require that the ________ approve any assignment of a contract.

Accepted Answer

A)  obligee 
B)  obligor 
C)  assignor 
D)  assignee 
A)  obligee 
B)  obligor 
C)  assignor 
D)  assignee

Question 6

Which of the following refers to an agreement that substitutes a new party for one of the original contracting parties and relieves the existing party of liability on the contract?

Accepted Answer

A)  novation 
B)  substituted contract 
C)  mutual rescission 
D)  accord 
A)  novation 
B)  substituted contract 
C)  mutual rescission 
D)  accord

Question 7

Where there is a valid delegation of duties but the delegatee has not assumed the duties under a contract, the delegation is called a(n) ________.

Accepted Answer

A)  condition precedent 
B)  declaration of duties 
C)  express condition 
D)  discharge 
A)  condition precedent 
B)  declaration of duties 
C)  express condition 
D)  discharge

Question 8

Howard is injured by Penny in a car accident, caused due to Penny's negligence. Which of the following statements holds true for Howard's right to assign?

Accepted Answer

A)  Howard cannot assign the recovery of punitive damages from Penny. 
B)  Howard can only assign the recovery of his medical expenses from Penny. 
C)  Howard's right to sue Penny cannot be assigned. 
D)  Howard can only assign his right to take the case to the appellate court. 
A)  Howard cannot assign the recovery of punitive damages from Penny. 
B)  Howard can only assign the recovery of his medical expenses from Penny. 
C)  Howard's right to sue Penny cannot be assigned. 
D)  Howard can only assign his right to take the case to the appellate court.

Question 9

A reasonable person test is a subjective test that applies to contracts involving personal taste and comfort.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is used to resolve a case where the obligee fraudulently makes successive assignments of the same right to a number of assignees, providing that the first assignee to give notice to the obligor prevails?

Accepted Answer

A)  the English rule 
B)  an approval clause 
C)  an anti-assignment clause 
D)  a novation agreement 
A)  the English rule 
B)  an approval clause 
C)  an anti-assignment clause 
D)  a novation agreement

Question 11

Which of the following phrases describes the term covenant?

Accepted Answer

A)  an unconditional promise to perform 
B)  a breach of contract 
C)  mutual rescission of a contract 
D)  successive assignments of a right 
A)  an unconditional promise to perform 
B)  a breach of contract 
C)  mutual rescission of a contract 
D)  successive assignments of a right

Question 12

A party who owes a duty of performance under a contract is called the ________.

Accepted Answer

A)  obligor 
B)  assignor 
C)  assignee 
D)  obligee 
A)  obligor 
B)  assignor 
C)  assignee 
D)  obligee

Question 13

What does the English rule for successive assignments provide?

Accepted Answer

A)  The first assignment in time prevails, regardless of notice. 
B)  The first assignment in time prevails, pending notice. 
C)  The first assignee to give notice to the obligor prevails. 
D)  The first assignee who receives a tangible token prevails. 
A)  The first assignment in time prevails, regardless of notice. 
B)  The first assignment in time prevails, pending notice. 
C)  The first assignee to give notice to the obligor prevails. 
D)  The first assignee who receives a tangible token prevails.

Question 14

Privity of contract refers to the transfer of contractual rights by an obligee to another party.

Accepted Answer

A) True 
 B)False

Question 15

Nonperformance of a covenant is not considered a breach of contract because a covenant is an unconditional promise.

Accepted Answer

A) True 
 B)False

Question 16

James hires Franco for a painting job. Their contract explicitly states that Franco's employment can be terminated if he is employed by another party during the contract period. Two weeks into the job, James finds out that Franco is also working for a painting agency two blocks away and terminates his employment. This is an instance of ________.

Accepted Answer

A)  condition precedent 
B)  condition subsequent 
C)  concurrent condition 
D)  implied condition 
A)  condition precedent 
B)  condition subsequent 
C)  concurrent condition 
D)  implied condition

Question 17

A substituted contract substitutes a new party for one of the original contracting parties.

Accepted Answer

A) True 
 B)False

Question 18

An assignment and delegation occurs when there is a transfer of both rights and duties under a contract.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is an illustration of the possession of tangible token rule?

Accepted Answer

A)  An obligee who is owed $10,000 assigns the right of collecting $5,000 each to two assignees. 
B)  The right of collecting $10,000 is recorded in the assignee's savings account passbook. 
C)  The assignee can re-assign the right only to a subassignee selected by the obligee. 
D)  An obligee cannot assign a right to collection more than once. 
A)  An obligee who is owed $10,000 assigns the right of collecting $5,000 each to two assignees. 
B)  The right of collecting $10,000 is recorded in the assignee's savings account passbook. 
C)  The assignee can re-assign the right only to a subassignee selected by the obligee. 
D)  An obligee cannot assign a right to collection more than once.

Question 20

In concurrent conditions, each party's duty to perform is conditioned on the other party's duty to perform.

Accepted Answer

A) True 
 B)False

Exam 15: Third-Party Rights and Discharge

A party who is owed a right under a contract is called an obligor.

In the United States, sales contracts and contracts for the payment of money are not assignable.

The reasonable person test is used to judge contracts involving mechanical fitness.

Approval clauses require that the ________ approve any assignment of a contract.

Which of the following refers to an agreement that substitutes a new party for one of the original contracting parties and relieves the existing party of liability on the contract?

Where there is a valid delegation of duties but the delegatee has not assumed the duties under a contract, the delegation is called a(n) ________.

Howard is injured by Penny in a car accident, caused due to Penny's negligence. Which of the following statements holds true for Howard's right to assign?

A reasonable person test is a subjective test that applies to contracts involving personal taste and comfort.

Which of the following is used to resolve a case where the obligee fraudulently makes successive assignments of the same right to a number of assignees, providing that the first assignee to give notice to the obligor prevails?

Which of the following phrases describes the term covenant?

A party who owes a duty of performance under a contract is called the ________.

What does the English rule for successive assignments provide?

Privity of contract refers to the transfer of contractual rights by an obligee to another party.

Nonperformance of a covenant is not considered a breach of contract because a covenant is an unconditional promise.

A substituted contract substitutes a new party for one of the original contracting parties.

An assignment and delegation occurs when there is a transfer of both rights and duties under a contract.

Which of the following is an illustration of the possession of tangible token rule?

In concurrent conditions, each party's duty to perform is conditioned on the other party's duty to perform.

Legal Heritage and the Digital Age

Courts and Jurisdiction

Judicial, Alternative, and E-Dispute Resolution

Constitutional Law for Business and E-Commerce

Intentional Torts and Negligence

Product and Strict Liability

Intellectual Property and Cyber Piracy

Criminal Law and Cyber Crime

Nature of Traditional and E-Contracts

Agreement

Consideration and Promissory Estoppel

Capacity and Legality

Genuineness of Assent and Undue Influence

Statute of Frauds and Equitable Exceptions

Remedies for Breach of Traditional and E-Contracts

Digital Law and E-Commerce

Formation of Sales and Lease Contracts

Title to Goods and Risk of Loss

Remedies for Breach of Sales and Lease Contracts

Warranties

Creation of Negotiable Instruments

Holder in Due Course and Transferability

Liability, Defenses, and Discharge

Banking System and Electronic Financial Transactions

Credit, Mortgages, and Debtors Rights

Secured Transactions

Bankruptcy and Reorganization

Agency Formation and Termination

Liability of Principals, Agents, and Independent Contractors

Employment, Worker Protection, and Immigration Law

Labor Law

Equal Opportunity in Employment

Small Business, Entrepreneurship, and General Partnerships

Limited Partnerships and Special Partnerships

Corporate Formation and Financing

Corporate Governance and the Sarbanes-Oxley Act

Corporate Acquisitions and Multinational Corporations

Limited Liability Companies and Limited Liability Partnerships

Franchise and Special Forms of Business

Investor Protection and E-Securities Transactions

Ethics and Social Responsibility of Business

Administrative Law and Regulatory Agencies

Consumer Protection and Product Safety

Environmental Protection

Antitrust Law and Unfair Trade Practices

Personal Property, Real Property, and Insurance

Real Property

Landlord-Tenant Law and Land Use Regulation

Insurance

Accountants Duties and Liability

Wills, Trusts, and Estates

Family Law

International and World Trade Law

Filters