Question 1

A[n] ______ beneficiary is a third party to a contract who is intended to be benefited directly from the contract made by the contracting parties.

Accepted Answer

A)   Intended
B)   Incidental
C)   Preferred
D)   Collateral
E)   AncillaryF) C) and D)
G) B) and E)

Question 2

When a donee beneficiary may enforce rights under a contract, it may be done so only against the ____.

Accepted Answer

A)   Promisee
B)   Promisor
C)   Obligor
D)   Initial contracting parties
E)   AssigneeF) B) and E)
G) A) and C)

Question 3

Lists four situations under which contractual rights cannot be assigned.

Accepted Answer

Four situations under which contractual ...

Question 4

A donee beneficiary is a third party that benefits from a contract in which the promisor agrees to pay the promisee's debt in return for compensation plus interest.

Accepted Answer

A) True 
 B)False

Question 5

"Portraits." Belinda, a famous portrait painter, agreed to paint Harry's portrait for $4,000. She also agreed to paint the portraits of Michelle's two Corgi dogs, Baby and Bree. Michelle agreed to pay Belinda $10,000 for the two Corgi portraits. Belinda charged Michelle more because dogs annoyed her. Belinda met the spoiled dogs, and they really got on her nerves. Plus, she was behind on finishing Harry's portrait. Belinda, therefore, assigned the right to receive the money for the dog portraits and delegated the duty to paint the dog portraits to her assistant, Fred. He eagerly accepted and painted the portraits. She also assigned to Fred, as payment for amounts she owed him for various duties, the right to receive payment from Harry. The contract Belinda had with Michelle did not address assignment in any way. The contract Belinda had with Harry, however, prohibited the right to assign payment for services received. Harry fancied himself as an experienced business person and insisted on that provision because he had read somewhere that such a clause was a good idea. Belinda finished the portrait of Harry and called him to come and pick it up. Meanwhile, a disgruntled secretary who disliked Belinda told both Michelle and Harry about the assignments to Fred. Michelle was furious and refused to pick up the portrait or pay anyone. Harry likewise refused to pay for his portrait.

-What would be the most likely result if Fred sues Michelle for the $10,000 payment?

Accepted Answer

A)   Fred will win only if Fred did a good job on the portraits.
B)   Fred will lose because Michelle's only obligation is to pay Belinda.
C)   Fred will win unless Michelle can prove that Fred knew that she did not want him to do the portraits.
D)   Fred will lose unless Fred can prove that he was unaware that Michelle did not want him to do the portraits.
E)   Michelle will win because the portrait was personal in nature and could not be assigned.F) B) and D)
G) All of the above

Question 6

List and discuss two reasons why notice of assignment should be given.

Accepted Answer

Notice of assignment should be given bec...

Question 7

Which of the following was the result in the case in the text Wesley Locke v. Ozark City Board of Education, in which an umpire was injured by an angry parent and sued claiming that he was an intended third-party beneficiary under a contract the defending board of education had with the Alabama High School Athletic Association requiring police protection which was not provided?

Accepted Answer

A)   The umpire won as a matter of law because he was an intended third-party beneficiary to the contract between the defending school board and the athletic association, and the defendant had an absolute nondelegable duty to provide protection ensuring that no one was hurt.
B)   The umpire won as a matter of law because although he was not an intended third-party beneficiary to the contract between the defending school board and the athletic association, the defendant had an absolute nondelegable duty to provide protection ensuring that no one was hurt.
C)   The defending school board won as a matter of law because although the umpire was an intended third-party beneficiary to the contract, only the athletic association could proceed with a lawsuit.
D)   The defending school board won as a matter of law because the umpire was not an intended third-party beneficiary to the contract.
E)   The case was remanded for trial on the issue of whether adequate police protection was provided in view of the fact that the plaintiff was an intended third-party beneficiary to the contract between the school board and the athletic association.F) A) and B)
G) A) and E)

Question 8

Which of the following is an exception to the general rule that rights to a contract cannot be assigned when a contract is personal in nature?

Accepted Answer

A)   When the only part of a contract left to be fulfilled is the payment.
B)   When nothing has been done on the contract at all.
C)   When no more than half the contractual duties have been performed.
D)   When no more than three-fourths of the contractual duties have been performed.
E)   There is no exception because rights to a contract that is personal in nature may generally be assigned.F) B) and E)
G) A) and B)

Question 9

Which of the following was the result on appeal in Forest Commodity Corp. ("FCC")  v. Lone Star Industries Inc., the case in the text in which the Forest Commodity Corp. denied that it violated a contractual nonassignability clause and claimed that it was entitled to recover on a breach of contract claim because the defendant did not fully perform?

Accepted Answer

A)   The court ruled that FCC did not violate a nonassignability clause and that it was entitled to recover.
B)   The court ruled that even though FCC violated the nonassignability clause, the nonassignability clause was against public policy; and FCC was allowed to recover.
C)   The court ruled that even though FCC violated the nonassignability clause, the other party also violated a nonassignability clause resulting in FCC being able to recover its full claim.
D)   The court ruled that FCC violated a nonassignability clause and was therefore unable to recover on its claim.
E)   The court ruled that FCC violated a nonassignability clause but that because the other party also violated a nonassignability clause, FCC's recovery would be reduced by 50%, not completely barred.F) A) and E)
G) B) and C)

Question 10

A party to a contract who transfers his or her duty to perform to a third party who is not part of the original contract is called a[n] _____.

Accepted Answer

A)   Delegatee
B)   Delegator
C)   Assignor
D)   Assignee
E)   TransferorF) A) and B)
G) All of the above

Question 11

There is no legally required wording to be used or forms to be filled out for assignments to be valid.

Accepted Answer

A) True 
 B)False

Question 12

"Third-Party Woes." Trudy owed Sam $40 for a book she purchased from him. Trudy mowed Betty's yard for $40 and agreed with Betty that Betty would pay Sam for the book. Sam is not aware of the assignment. Betty pays no one. Trudy also mowed Bob's yard for $40. She agreed with Bob that Bob would give the payment to Sally representing Trudy's birthday present to Sally. Bob later refuses to do so saying that promises to give gifts are not enforceable. He then moves out of town. Trudy tells both Sam and Sally that she is broke and that they will have to get any amounts due from Betty and Bob respectively. Sally is very unhappy because she wanted to buy a new pair of sandals with the money.

-Which of the following would be the likely result if Sally sues Trudy and Bob for the $40 promised to her for her birthday?

Accepted Answer

A)   Sally will win as to both because they are equally liable to provide the funds.
B)   Sally will win as to Bob but win as to Trudy only if she can prove that Bob is insolvent and unable to pay.
C)   Sally will win as to Bob but win as to Trudy only if she can prove that she cannot find Bob in order to serve process on him.
D)   Sally will lose as to both Trudy and Bob because promises to give gifts are unenforceable in the absence of reliance.
E)   Sally will lose as to Trudy because Trudy had no obligation to go through with the gift, but she will win as to Bob.F) C) and E)
G) D) and E)

Question 13

Which of the following states that in the case of multiple assignments of the same right, the first party granted the assignment is the party correctly entitled to the contractual right?

Accepted Answer

A)   The first-assignment-in-time rule
B)   The last-assignment-in-time rule
C)   The English rule
D)   The French rule
E)   The American ruleF) C) and E)
G) C) and D)

Question 14

A[n] ______ is created when two parties enter into a contract with the intended end purpose of benefiting a third party.

Accepted Answer

A)   Third-party beneficiary
B)   Second-party beneficiary
C)   First-party beneficiary
D)   Assignment
E)   Creditor BeneficiaryF) C) and E)
G) B) and D)

Question 15

Sally agrees to mow Paul's yard for $300 for the summer. Paul wishes to assign the contract to his grandmother. Sally objects because Paul's yard is very small while his grandmother's yard is over an acre. Which of the following is the correct legal outcome for the dispute between Sally and Paul?

Accepted Answer

A)   Sally will win because Paul's attempted assignment would increase the duties to which she agreed.
B)   Sally will win because all assignments are invalid without the obligor's consent.
C)   Sally will win unless Paul paid her the $300 in advance in which case Paul will win.
D)   Paul will win because he may validly assign the contract without Sally's consent.
E)   Paul will win so long as he tells Sally about the assignment prior to the time she begins any performance whatsoever.F) C) and E)
G) A) and C)

Question 16

"Third-Party Woes." Trudy owed Sam $40 for a book she purchased from him. Trudy mowed Betty's yard for $40 and agreed with Betty that Betty would pay Sam for the book. Sam is not aware of the assignment. Betty pays no one. Trudy also mowed Bob's yard for $40. She agreed with Bob that Bob would give the payment to Sally representing Trudy's birthday present to Sally. Bob later refuses to do so saying that promises to give gifts are not enforceable. He then moves out of town. Trudy tells both Sam and Sally that she is broke and that they will have to get any amounts due from Betty and Bob respectively. Sally is very unhappy because she wanted to buy a new pair of sandals with the money.

-What type of third-party beneficiary is Sam?

Accepted Answer

A)   Intended and donee
B)   Creditor and incidental
C)   Intended and creditor
D)   Donee and incidental
E)   Creditor and doneeF) B) and D)
G) None of the above

Question 17

A third party, who is not part of an original contract, but to whom duty to perform contained in the original contract is transferred is called a[n] _____.

Accepted Answer

A)   Delegatee
B)   Delegator
C)   Assignor
D)   Assignee
E)   TransferorF) A) and D)
G) A) and C)

Question 18

Which of the following is true regarding an assignee's acceptance of assigned rights?

Accepted Answer

A)   A creditor beneficiary must accept assignment of rights, but there is no requirement that a donee beneficiary do so.
B)   A donee beneficiary must accept assignment of rights, but there is no requirement that a creditor beneficiary do so.
C)   An assignee must agree to accept assigned rights, and there is a strict protocol for doing so.
D)   An assignee may decline an assignment if he has not agreed to it and declines in a timely fashion after learning of it.
E)   An assignee may only decline an assignment if a delegation of duties is also involved.F) C) and E)
G) C) and D)

Question 19

Which of the following is a contractual party who agrees to receive something from the other party?

Accepted Answer

A)   Obligor
B)   Obligee
C)   Assignor
D)   Assignee
E)   BoundeeF) A) and B)
G) A) and C)

Question 20

In Australia a third party can sue for breach of contract.

Accepted Answer

A) True 
 B)False

Exam 19: Third-Party Rights to Contracts

A third party, who is not part of an original contract, but to whom duty to perform contained in the original contract is transferred is called a[n] _____.

Correct Answer
verified

In Australia a third party can sue for breach of contract.

Correct Answer
verified

A donee beneficiary is a third party that benefits from a contract in which the promisor agrees to pay the promisee's debt in return for compensation plus interest.

Correct Answer
verified

Sally agrees to mow Paul's yard for $300 for the summer. Paul wishes to assign the contract to his grandmother. Sally objects because Paul's yard is very small while his grandmother's yard is over an acre. Which of the following is the correct legal outcome for the dispute between Sally and Paul?

Correct Answer
verified

There is no legally required wording to be used or forms to be filled out for assignments to be valid.

Correct Answer
verified

When a donee beneficiary may enforce rights under a contract, it may be done so only against the ____.

Correct Answer
verified

A[n] ______ beneficiary is a third party to a contract who is intended to be benefited directly from the contract made by the contracting parties.

Correct Answer
verified

A party to a contract who transfers his or her duty to perform to a third party who is not part of the original contract is called a[n] _____.

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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List and discuss two reasons why notice of assignment should be given.

Correct Answer
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Notice of assignment should be given bec...
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Which of the following is true regarding an assignee's acceptance of assigned rights?

Correct Answer
verified

Which of the following is a contractual party who agrees to receive something from the other party?

Correct Answer
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Which of the following states that in the case of multiple assignments of the same right, the first party granted the assignment is the party correctly entitled to the contractual right?

Correct Answer
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A[n] ______ is created when two parties enter into a contract with the intended end purpose of benefiting a third party.

Correct Answer
verified

Correct Answer
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Which of the following is an exception to the general rule that rights to a contract cannot be assigned when a contract is personal in nature?

Correct Answer
verified

Lists four situations under which contractual rights cannot be assigned.

Correct Answer
verified
Four situations under which contractual ...
View Answer

Correct Answer
verified

Exam 19: Third-Party Rights to Contracts

A third party, who is not part of an original contract, but to whom duty to perform contained in the original contract is transferred is called a[n] _____.

Correct AnswerverifiedShow Answer

In Australia a third party can sue for breach of contract.

Correct AnswerverifiedShow Answer

A donee beneficiary is a third party that benefits from a contract in which the promisor agrees to pay the promisee's debt in return for compensation plus interest.

Correct AnswerverifiedShow Answer

Sally agrees to mow Paul's yard for $300 for the summer. Paul wishes to assign the contract to his grandmother. Sally objects because Paul's yard is very small while his grandmother's yard is over an acre. Which of the following is the correct legal outcome for the dispute between Sally and Paul?

Correct AnswerverifiedShow Answer

There is no legally required wording to be used or forms to be filled out for assignments to be valid.

Correct AnswerverifiedShow Answer

When a donee beneficiary may enforce rights under a contract, it may be done so only against the ____.

Correct AnswerverifiedShow Answer

A[n] ______ beneficiary is a third party to a contract who is intended to be benefited directly from the contract made by the contracting parties.

Correct AnswerverifiedShow Answer

A party to a contract who transfers his or her duty to perform to a third party who is not part of the original contract is called a[n] _____.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

List and discuss two reasons why notice of assignment should be given.

Correct AnswerverifiedNotice of assignment should be given bec...View AnswerShow Answer

Which of the following is true regarding an assignee's acceptance of assigned rights?

Correct AnswerverifiedShow Answer

Which of the following is a contractual party who agrees to receive something from the other party?

Correct AnswerverifiedShow Answer

Which of the following states that in the case of multiple assignments of the same right, the first party granted the assignment is the party correctly entitled to the contractual right?

Correct AnswerverifiedShow Answer

A[n] ______ is created when two parties enter into a contract with the intended end purpose of benefiting a third party.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is an exception to the general rule that rights to a contract cannot be assigned when a contract is personal in nature?

Correct AnswerverifiedShow Answer

Lists four situations under which contractual rights cannot be assigned.

Correct AnswerverifiedFour situations under which contractual ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

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Notice of assignment should be given bec...
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Four situations under which contractual ...
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