Question 1

If Casey assigns her rights to receive income from rental property to Errol,then Errol will legally acquire any rights to the income previously held by Casey.

Accepted Answer

A) True 
 B)False

Question 2

Char-Glo Industries contracted with Evergreen Lawn Service to mow and trim the company's lawn.In the contract,Char-Glo included a clause prohibiting Evergreen from delegating its duties.Courts will ordinarily not enforce such a clause.

Accepted Answer

A) True 
 B)False

Question 3

Discuss the potential liability differences between a delegation and a novation.

Accepted Answer

When an obligor delegates duties under a...

Question 4

A spouse who is named the beneficiary of a life insurance policy would ordinarily be:

Accepted Answer

A)   a creditor beneficiary.
B)   an incidental beneficiary.
C)   a donee beneficiary.
D)   a debtor beneficiary.

Question 5

Cheryl enters into a contract with Gabe.In this contract,Cheryl asks Gabe to pay the money he owes her from the contract to her friend Leah because Leah is having financial troubles.Leah is:

Accepted Answer

A)   a third party creditor beneficiary.
B)   a third party donee beneficiary.
C)   a third party incidental beneficiary.
D)   the promisee in the contract.

Question 6

Garth's Imports sold a car to Wally on credit for $30,000.Garth assigned to Cassandra all of his rights to receive money from Wally.Cassandra did not inform Wally of the assignment.Therefore,Wally continued to make the next three payments directly to Garth.Shortly thereafter,Garth left the country with the money.If Cassandra sues Wally for the missing three payments:

Accepted Answer

A)   Cassandra will not be able to collect the money from Wally.
B)   Wally is not liable for the three payments because an assignment is not valid unless the obligor is notified.
C)   Wally is liable for the three payments because Cassandra paid consideration for the assignment rights.
D)   Wally cannot raise the defense of previous payment.

Question 7

An assignment is valid:

Accepted Answer

A)   from the moment it is made.
B)   from the moment the assignor notifies the obligor.
C)   from the moment the assignee notifies the obligor.
D)   from the moment the obligor is notified from any source.

Question 8

Andrew Durham was injured in a job-related accident that resulted in a workers' compensation settlement agreement with the employer's insurance carrier,Traveler's Indemnity Company.The settlement agreement required Traveler's to pay Durham $2500 per month for the rest of his life.To finance its obligation,Traveler's purchased an annuity in its name.The settlement agreement required Traveler's approval or consent prior to an assignment of the annuity payments.Durham later decided to open a business and went to a credit union for a $214,000 loan.The credit union loaned the money,taking a security interest in Durham's monthly annuity payments.Traveler's consent was never secured.Was this a valid assignment?

Accepted Answer

Assignments can be made unless: (a)the a...

Question 9

Norm and Frank have a legal contract that is silent with regard to an assignment of the contract.In order for Norm to assign all or part of his rights under a contract,Frank must grant such permission to Norm.

Accepted Answer

A) True 
 B)False

Question 10

Molly and Craig are the original parties to a contract.Craig is obligated to design a Website for Molly.They subsequently make an agreement with Eric that Eric should take the place of Craig and assume all of Craig's rights and duties under the contract.The agreement releases Craig from his obligations under the contract.This agreement is:

Accepted Answer

A)   a novation.
B)   an accord and satisfaction.
C)   an assignment.
D)   a nullification.

Question 11

The status of a third party is determined by:

Accepted Answer

A)   the type of contract.
B)   whether the third party gave consideration.
C)   the reasonable expectations of the third party.
D)   the intent of the contracting parties.

Question 12

Briefly discuss the enforceability of contracts by third parties.

Accepted Answer

Contracts can be enforced by third parti...

Question 13

Brandon orally assigned his right to $100 from a lawn mowing contract to Will as a gift.This assignment is:

Accepted Answer

A)   not valid because it was not in writing.
B)   valid even though it was oral and there was no consideration from Will.
C)   irrevocable once Brandon has told Will about the gift.
D)   not valid because Will gave no consideration for the assignment.

Question 14

A rock group assigns its payment under a performance contract to the Costume Shop,a business that has supplied the group with outrageous stage outfits,and to which the group owes a great sum of money.This is:

Accepted Answer

A)   a valid assignment because of the rule of freedom to contract.
B)   a valid assignment because this is a simple transfer of the right to receive money.
C)   an invalid assignment because it increases the burden of the payor.
D)   an invalid assignment because this is a personal service contract.

Question 15

Susan took out a life insurance policy on herself,paying all of the premium payments.She named her daughter,Jessica,as the beneficiary under the policy.Jessica has not given anything in consideration for the policy.Jessica is:

Accepted Answer

A)   a donee beneficiary who has rights to enforce the policy once Susan dies.
B)   a creditor beneficiary who has rights to enforce the policy once Susan dies.
C)   an incidental beneficiary because Jessica did not give any consideration for the policy and therefore cannot enforce the policy even when Susan dies.
D)   None of the above.

Question 16

Generally,in comparison to a donee beneficiary,a creditor beneficiary has:

Accepted Answer

A)   about the same legal rights.
B)   substantially greater rights.
C)   substantially fewer legal rights.
D)   virtually no legal rights.

Question 17

Which statement most accurately describes third party beneficiary rights?

Accepted Answer

A)   A beneficiary may enforce a contract if the parties intended to benefit him and if enforcing the promise will satisfy a duty of the promisee to the beneficiary.
B)   If a promisee intended to make a gift to the beneficiary, the beneficiary may not enforce the contract.
C)   An intended third party beneficiary has no enforceable rights in a contract.
D)   Incidental beneficiaries have enforceable rights against both contracting parties.

Question 18

A donee beneficiary:

Accepted Answer

A)   is not entitled to enforce a contract against either party.
B)   usually does not give consideration in return for the gift.
C)   will generally become a creditor beneficiary after his or her rights vest.
D)   is an incidental beneficiary.

Question 19

Shirley is an actress under contract with Twentieth Century.Shirley agreed to perform the lead role in a musical to be filmed in Hollywood by Twentieth Century.At the last minute,Twentieth Century decided to scrap the musical and assigned its rights in Shirley to MGM.MGM was planning to film a western in Australia requiring Shirley to spend six months filming in Australia.Can Shirley successfully prevent this assignment?

Accepted Answer

Yes.This assignment of rights would subs...

Question 20

Jerry purchased a laptop computer for his personal use from Computer City on an installment loan contract.The sales contract stated that in the event the contract is assigned to a third party,the purchaser (Jerry) promises he will not assert any claim or defense against the assignee which he might have against Computer City.Computer City immediately assigns the contract rights to Finance USA.The computer stops working within two weeks of the purchase.

Accepted Answer

A)   This is a valid waiver of defense clause. Jerry signed the contract, so he can't raise a defense to Finance USA.
B)   Finance USA is an intended third party beneficiary and may therefore enforce the contract.
C)   In general, this type of waiver is not permitted in consumer contracts, so Jerry can raise his claim against Finance USA.
D)   This is a delegation of Jerry's duties and the delegator remains liable on the contract unless a novation agreement is made.

Exam 16: Third Parties

Char-Glo Industries contracted with Evergreen Lawn Service to mow and trim the company's lawn.In the contract,Char-Glo included a clause prohibiting Evergreen from delegating its duties.Courts will ordinarily not enforce such a clause.

Correct Answer
verified

Correct Answer
verified
Assignments can be made unless: (a)the a...
View Answer

Susan took out a life insurance policy on herself,paying all of the premium payments.She named her daughter,Jessica,as the beneficiary under the policy.Jessica has not given anything in consideration for the policy.Jessica is:

Correct Answer
verified

A donee beneficiary:

Correct Answer
verified

Norm and Frank have a legal contract that is silent with regard to an assignment of the contract.In order for Norm to assign all or part of his rights under a contract,Frank must grant such permission to Norm.

Correct Answer
verified

Briefly discuss the enforceability of contracts by third parties.

Correct Answer
verified
Contracts can be enforced by third parti...
View Answer

An assignment is valid:

Correct Answer
verified

Generally,in comparison to a donee beneficiary,a creditor beneficiary has:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Which statement most accurately describes third party beneficiary rights?

Correct Answer
verified

Correct Answer
verified

A rock group assigns its payment under a performance contract to the Costume Shop,a business that has supplied the group with outrageous stage outfits,and to which the group owes a great sum of money.This is:

Correct Answer
verified

Correct Answer
verified
Yes.This assignment of rights would subs...
View Answer

Cheryl enters into a contract with Gabe.In this contract,Cheryl asks Gabe to pay the money he owes her from the contract to her friend Leah because Leah is having financial troubles.Leah is:

Correct Answer
verified

The status of a third party is determined by:

Correct Answer
verified

Discuss the potential liability differences between a delegation and a novation.

Correct Answer
verified
When an obligor delegates duties under a...
View Answer

If Casey assigns her rights to receive income from rental property to Errol,then Errol will legally acquire any rights to the income previously held by Casey.

Correct Answer
verified

A spouse who is named the beneficiary of a life insurance policy would ordinarily be:

Correct Answer
verified

Brandon orally assigned his right to $100 from a lawn mowing contract to Will as a gift.This assignment is:

Correct Answer
verified

Exam 16: Third Parties

Char-Glo Industries contracted with Evergreen Lawn Service to mow and trim the company's lawn.In the contract,Char-Glo included a clause prohibiting Evergreen from delegating its duties.Courts will ordinarily not enforce such a clause.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedAssignments can be made unless: (a)the a...View AnswerShow Answer

Susan took out a life insurance policy on herself,paying all of the premium payments.She named her daughter,Jessica,as the beneficiary under the policy.Jessica has not given anything in consideration for the policy.Jessica is:

Correct AnswerverifiedShow Answer

A donee beneficiary:

Correct AnswerverifiedShow Answer

Norm and Frank have a legal contract that is silent with regard to an assignment of the contract.In order for Norm to assign all or part of his rights under a contract,Frank must grant such permission to Norm.

Correct AnswerverifiedShow Answer

Briefly discuss the enforceability of contracts by third parties.

Correct AnswerverifiedContracts can be enforced by third parti...View AnswerShow Answer

An assignment is valid:

Correct AnswerverifiedShow Answer

Generally,in comparison to a donee beneficiary,a creditor beneficiary has:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which statement most accurately describes third party beneficiary rights?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A rock group assigns its payment under a performance contract to the Costume Shop,a business that has supplied the group with outrageous stage outfits,and to which the group owes a great sum of money.This is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedYes.This assignment of rights would subs...View AnswerShow Answer

Cheryl enters into a contract with Gabe.In this contract,Cheryl asks Gabe to pay the money he owes her from the contract to her friend Leah because Leah is having financial troubles.Leah is:

Correct AnswerverifiedShow Answer

The status of a third party is determined by:

Correct AnswerverifiedShow Answer

Discuss the potential liability differences between a delegation and a novation.

Correct AnswerverifiedWhen an obligor delegates duties under a...View AnswerShow Answer

If Casey assigns her rights to receive income from rental property to Errol,then Errol will legally acquire any rights to the income previously held by Casey.

Correct AnswerverifiedShow Answer

A spouse who is named the beneficiary of a life insurance policy would ordinarily be:

Correct AnswerverifiedShow Answer

Brandon orally assigned his right to $100 from a lawn mowing contract to Will as a gift.This assignment is:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
Assignments can be made unless: (a)the a...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Contracts can be enforced by third parti...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Yes.This assignment of rights would subs...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
When an obligor delegates duties under a...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified