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Exam 17: Third Party Rights

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Question 21

True/False

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In most states, the assignment of ownership rights in real estate cannot be prohibited because that would be contrary to public policy.

A) True
B) False

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Question 22

Multiple Choice

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Lau enters into a contract to mow Macy's yard every week for the summer. Macy sells her house and yard to Nona, and assigns the right to receive Lau's services to Nora. Macy is

A) the obligor.
B) a third party beneficiary.
C) the assignee.
D) the assignor.

E) A) and C)
F) A) and B)

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Question 23

Multiple Choice

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If performance under a contract will vary materially on a delegation of its duties to a third party from that expected by the obligee, the delegation is

A debt collector who is delegated the right to payments on a student loan owes no obligation to the debtor arising under the original terms of the loan.

Apps LLC enters into a contract with Birk, the chief executive officer of Corporate Sales Inc., to create an app for the firm. To fulfill the contract, Apps hires Dave as a student intern. With respect to the app contract, Dave is

Ira owes Jess $1,000. Kerr owes Ira $1,000. Ira unconditionally assigns to Jess the right to Kerr's payment. Jess's right to the $1,000 is subject to the defenses that

The assignment of the same contract right to two different persons creates parallel and equal rights and obligations.

Paolo borrows $5,000 from Quality Auto Sales to buy a car. When Paolo does not pay the loan or return the car, Quality wants to transfers the right to the payment to Rapid Collection Agency. Rapid agrees to pay Quality for this right, but for a price that is less than the amount owed. Can Quality transfer this right to Rapid without Paolo's consent? If so, and Quality committed fraud in the deal with Paolo, could Paolo legitimately refuse to pay Rapid? Explain.

An incidental third party beneficiary cannot sue to enforce the contract because the benefit is unintentional.

A third party's right to control the details of performance of a contract indicates that the third party is an intended beneficiary.

Retail LLC contracts with Paving Inc. to grade and pave a parking lot. The contract provides that it cannot be assigned without Retail's consent. Later, Paving assigns the contract to Roadwork Company without obtaining Retail's consent. Retail could most successfully argue that the contract cannot be assigned because

When the performance of a contract depends on the personal skill of the obligor, a delegation of the duty is prohibited.

On a delegation of contract duties, the delegator is absolved from any liability for performance under the contract.

Marlo and Nita enter into a contract for the sale of Marlo's apartment for which Nita agrees to pay $250,000. Nita assigns her right to buy the apartment to Owen. Owen is

If a contract stipulates that it cannot be assigned, then it cannot be assigned unless the assignment

After a transfer to a creditor by an investor of a right to receive payments on a business loan, the creditor can demand those payments from the borrower.

Kip enters into a contract with Life Insurance Company for a policy that designates Mia as the beneficiary. Kip reserves the right to change the designated beneficiary. Mia's rights under the policy are

Beta contracts to design and deliver marketing materials to Cesar. Beta cannot delegate this duty to Devon

An investor cannot effectively object to the delegation of the selection of his or her investments under a contract with one financial advisor to another.

Lew and Mavis enter into a contract for the clearing and plowing of Mavis's 350-acre tract for which she agrees to pay $1,000. Lew transfers his duty under this contract to Nye. With respect to the duties under the original contract, this transfer