Question 1

The assignment of the same contract right to two different parties automatically cancels both assignments.​

Accepted Answer

A) True 
 B)False  False

Question 2

Performance can be accomplished by tender.​

Accepted Answer

A) True 
 B)False  True

Question 3

Contractors Service, Inc., enters into a contract to build a restaurant for Dierdre with her payment due on August 1. On August 1, her bank is closed, and for this reason, she claims that she cannot pay on time. In this situation​

Accepted Answer

A)   ​Dierdre's bank is liable to Contractors Service.
B)   ​Dierdre is in breach of contract.
C)   ​the contract is discharged.
D)   ​the contract is suspended. B

Question 4

A contractual obligation may not be discharged through novation.​

Accepted Answer

A) True 
 B)False

Question 5

Floors n' More, Inc., hires Gordon to renovate Floors n' Mores showroom. Gordon submits plans that Floors n' More approves. Gordon completes the major reconstruction, paints the interior, and buys the fixtures and furnishings. Floors n' More rejects some of these items because they do not match the plans, and subsequently refuses to allow Gordon to finish the work or to collect payment. Could Gordon sue successfully for payment for the entire contract?​

Accepted Answer

The answer of Floors n' More, Inc., hires Gordon to...

Question 6

Contracts that are executory on both sides can be rescinded by agreement.​

Accepted Answer

A) True 
 B)False

Question 7

A material breach occurs when performance is substantial, but not complete.​

Accepted Answer

A) True 
 B)False

Question 8

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​

Accepted Answer

A)   absolved of any liability under the contract.​
B)   ​liable to Joy for breach of contract.
C)   ​liable to Joy if Leza does not perform.
D)   ​liable to Leza for inducing a prohibited contract.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

An insurance policy is an example of a right that can be assigned.​

Accepted Answer

A) True 
 B)False

Question 11

A contract between Laser Equipment, Inc., and Medical Center contains a clause stating that any assignment is "void." This ordinarily prohibits​

Accepted Answer

A)   any assignment.​
B)   ​no assignment.
C)   ​only an assignment of contract rights to personal services.
D)   ​only an assignment that would change the obligor's risk.

Question 12

Expressly designating a third party as a beneficiary in a contract does not indicate whether the beneficiary is intended or incidental.​

Accepted Answer

A) True 
 B)False

Question 13

Eli owes Martin $10,000. Martin assigns the claim to Jack. Jack does not notify Eli of the assignment. A week later, Martin assigns the same claim to Allen. Allen immediately notifies Eli of the assignment. Allen​

Accepted Answer

A)   ​has priority to payment in all states.
B)   ​has priority to payment in states that follow the English rule.
C)   ​does not have priority to payment in any state.
D)   ​has priority to payment in most states.

Question 14

Gliding Light, LLC, and Hang Gliders, Inc., are parties to a contract. They subsequently agree that High Riders Inc. should take Gliding Light's place and assume all of its rights and duties under the contract. This is​

Accepted Answer

A)   ​a mutual agreement to rescind.
B)   ​an accord and satisfaction.
C)   ​a novation.
D)   ​a settlement agreement.

Question 15

Contract duties are not assigned-they are delegated.​

Accepted Answer

A) True 
 B)False

Question 16

The law allows an innocent party to be discharged when the other party has materially altered a written contract without consent.​

Accepted Answer

A) True 
 B)False

Question 17

Ian owes Jo $5,000. Jo assigns the right to this payment to Kyle. Notice by Jo to Ian of the assignment​

Accepted Answer

A)   ​must be given immediately.
B)   ​must be given within thirty days.
C)   ​must be given within a reasonable time.
D)   ​is not required.

Question 18

When a contract party materially alters a written contract without consent, the other party must adapt his or her performance accordingly.​

Accepted Answer

A) True 
 B)False

Question 19

An occurrence or event that makes performance temporarily impossible operates to discharge the parties' contractual duties.​

Accepted Answer

A) True 
 B)False

Question 20

Any breach allows the nonbreaching party to sue for damages.​

Accepted Answer

A) True 
 B)False

Exam 11: Third Party Rights and Discharge

The assignment of the same contract right to two different parties automatically cancels both assignments.​

Performance can be accomplished by tender.​

Contractors Service, Inc., enters into a contract to build a restaurant for Dierdre with her payment due on August 1. On August 1, her bank is closed, and for this reason, she claims that she cannot pay on time. In this situation​

A contractual obligation may not be discharged through novation.​

Contracts that are executory on both sides can be rescinded by agreement.​

A material breach occurs when performance is substantial, but not complete.​

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​

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

An insurance policy is an example of a right that can be assigned.​

A contract between Laser Equipment, Inc., and Medical Center contains a clause stating that any assignment is "void." This ordinarily prohibits​

Expressly designating a third party as a beneficiary in a contract does not indicate whether the beneficiary is intended or incidental.​

Eli owes Martin $10,000. Martin assigns the claim to Jack. Jack does not notify Eli of the assignment. A week later, Martin assigns the same claim to Allen. Allen immediately notifies Eli of the assignment. Allen​

Gliding Light, LLC, and Hang Gliders, Inc., are parties to a contract. They subsequently agree that High Riders Inc. should take Gliding Light's place and assume all of its rights and duties under the contract. This is​

Contract duties are not assigned-they are delegated.​

The law allows an innocent party to be discharged when the other party has materially altered a written contract without consent.​

Ian owes Jo $5,000. Jo assigns the right to this payment to Kyle. Notice by Jo to Ian of the assignment​

When a contract party materially alters a written contract without consent, the other party must adapt his or her performance accordingly.​

An occurrence or event that makes performance temporarily impossible operates to discharge the parties' contractual duties.​

Any breach allows the nonbreaching party to sue for damages.​

The assignment of the same contract right to two different parties automatically cancels both assignments.

Performance can be accomplished by tender.

Contractors Service, Inc., enters into a contract to build a restaurant for Dierdre with her payment due on August 1. On August 1, her bank is closed, and for this reason, she claims that she cannot pay on time. In this situation

A contractual obligation may not be discharged through novation.

Contracts that are executory on both sides can be rescinded by agreement.

A material breach occurs when performance is substantial, but not complete.

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

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

An insurance policy is an example of a right that can be assigned.

A contract between Laser Equipment, Inc., and Medical Center contains a clause stating that any assignment is "void." This ordinarily prohibits

Expressly designating a third party as a beneficiary in a contract does not indicate whether the beneficiary is intended or incidental.

Eli owes Martin $10,000. Martin assigns the claim to Jack. Jack does not notify Eli of the assignment. A week later, Martin assigns the same claim to Allen. Allen immediately notifies Eli of the assignment. Allen

Gliding Light, LLC, and Hang Gliders, Inc., are parties to a contract. They subsequently agree that High Riders Inc. should take Gliding Light's place and assume all of its rights and duties under the contract. This is

Contract duties are not assigned-they are delegated.

The law allows an innocent party to be discharged when the other party has materially altered a written contract without consent.

Ian owes Jo $5,000. Jo assigns the right to this payment to Kyle. Notice by Jo to Ian of the assignment

When a contract party materially alters a written contract without consent, the other party must adapt his or her performance accordingly.

An occurrence or event that makes performance temporarily impossible operates to discharge the parties' contractual duties.

Any breach allows the nonbreaching party to sue for damages.