Question 1

Jimmy and Penny enter into a contract. Jimmy transfers his rights under the contract to Luis. Luis is a(n) :

Accepted Answer

A)   Transferor
B)   Transferee
C)   Relator
D)   Assignor
E)   AssigneeF) A) and E)
G) B) and C)

Question 2

Kurt and Jennifer have an agreement that Jennifer will buy Kurt's house. Later, Jennifer verbally assigns the right to buy the house to Kristi, one of Kurt's former girlfriends. When Kristi shows up with the money, Kurt says "No way! You ditched me to date Rick. I'm not ever letting you get anything from me!" Which of the following is true in regard to the dispute between Kurt and Kristi?

Accepted Answer

A)   Kristi can enforce the assignment only if the agreement that Kurt and Jennifer had was in writing.
B)   Kristi can enforce the assignment.
C)   Kristi cannot enforce the assignment because it was not in writing.
D)   Kristi cannot enforce the assignment because Kurt did not specifically grant Jennifer the power to assign the contract.
E)   Kristi cannot enforce the assignment because assignments to purchase property cannot ever be assigned for public policy reasons.F) B) and C)
G) C) and E)

Question 3

The party who makes the promise that benefits the third party is the ________ in a third-party beneficiary contract.

Accepted Answer

A)   Promisee
B)   Promisor
C)   Obligor
D)   Obligee
E)   AssignorF) None of the above
G) A) and E)

Question 4

What tests do the courts use to determine whether a party is an intended or incidental beneficiary?

Accepted Answer

The courts ask if a reasonable person in...

Question 5

Raymond finds out that the city of Mornady has a contract with ACME company to pave the streets in front of his house. Paving the street will increase the value of his property. Raymond would be a[n] ________ beneficiary to the contract.

Accepted Answer

A)   donee
B)   creditor
C)   incidental
D)   accidental
E)   negligentF) A) and E)
G) B) and D)

Question 6

Simone assigned her rights under a contract to Juan. Forgetting that she took this action, she later assigned her rights under the contract to Kai. Kai provided notice to the obligor of the assignment right away, but Juan never provided notice. The state gives Kai the rights. Which rule did the state apply?

Accepted Answer

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

Question 7

[Painted House] Jamal had a contract to paint Stephanie's house for $800. His contractual obligations included cleaning up any debris. The contract between Jamal and Stephanie did not in any way address assignment. Jamal, who was very busy, assigned the contract to Greg who was interested in making some extra money and had experience painting. Jamal specified that the contract included the duty to paint the house and the right to receive the money. Jamal did not tell Stephanie about the assignment because he did not want any trouble. Greg also did not mention the assignment to Stephanie. In fact, Greg never met Stephanie because he painted her house while she was at work. After Greg did a good job painting the house, Stephanie sent a check to Jamal for $800. Jamal needed the money to pay some bills, so he spent it. He thought he would have money coming in with which to pay Greg, but that did not happen. Greg asked Stephanie for $800 when it was not forthcoming from Jamal. Stephanie refused. Greg said that he was going to sue her. Stephanie called Jamal and told him that he had no right to assign the contract. In addition, there was another problem involving the disposal of debris. Although Greg was a good, competent painter, he forgot and left some old paint cans at Stephanie's house. Stephanie demanded that Jamal come and properly dispose of the paint cans because they could not simply be put in the trash. Jamal refused and told her that she would have to get Greg to dispose of the paint cans because that was his responsibility. Stephanie called Greg who told her that he was busy and that clearing out the paint cans was Jamal's responsibility.
-Which of the following is true regarding Stephanie's statement to Jamal that he had no right to assign the contract?

Accepted Answer

A)   Stephanie is correct because a personal service was involved.
B)   Stephanie is correct because the contract did not specifically give Jamal the right to assign the contract.
C)   Stephanie is correct because a delegation, as well as an assignment, was involved.
D)   Stephanie is incorrect because the contract was not for the performance of a personal service, and there was no requirement that the contract specifically reference the right to assign rights and duties.
E)   Stephanie is incorrect only because the contract and assignment were for an amount under $1,000. Otherwise, Jamal had no right to assign the contract without her permission.F) D) and E)
G) B) and C)

Question 8

[Third-Party Woes] Jaya owed Bobby $40 for a book she purchased from him. Jaya mowed Laura's yard for $40 and made an agreement with Laura that Laura would pay Bobby for the book. Bobby was not aware of the assignment. Laura did not pay anyone. Jaya also mowed Ken's yard for $40. She agreed with Ken that Ken would give the payment to Bianca, representing Jaya's birthday present to Bianca. Ken later refuses to do so, saying that promises to give gifts are not enforceable. Ken then moved out of town. Jaya told both Bobby and Bianca that she was broke and that they would have to recover any amounts due directly from Laura and Ken, respectively. Bianca was 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 Bobby sues Jaya for the $40 she owes him for the book?

Accepted Answer

A)   Bobby will win because Jaya cannot avoid her obligations through a delegation.
B)   Bobby will win but only because he was not aware of the assignment.
C)   Bobby will win but only because the contract was for an amount under $1,000.
D)   Bobby will win only if Laura cannot be found for service of process.
E)   Jaya will win because she delegated the duty of payment to Laura.F) B) and E)
G) A) and B)

Question 9

What type of third-party beneficiary is Bobby?

Accepted Answer

A)   Intended and donee
B)   Creditor and incidental
C)   Intended and creditor
D)   Donee and incidental
E)   Creditor and doneeF) A) and B)
G) A) and C)

Question 10

When an assignor transfers her rights to an assignee, the assignor legally gives up all rights to collect on a contract.

Accepted Answer

A) True 
 B)False

Question 11

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 12

Which of the following is true regarding the rights of an incidental beneficiary to a contract to sue to recover incidental rights?

Accepted Answer

A)   An incidental beneficiary may sue to enforce incidental contractual rights so long as those rights have vested.
B)   An incidental beneficiary may sue to enforce incidental contractual rights only if the incidental beneficiary was once a creditor beneficiary.
C)   An incidental beneficiary may sue to enforce incidental contractual rights only if the incidental beneficiary was once a donee beneficiary.
D)   An incidental beneficiary may sue to enforce incidental contractual rights only if the incidental beneficiary is also a second-party beneficiary.
E)   An incidental beneficiary cannot sue to enforce a contract which provided incidental benefits.F) A) and B)
G) None of the above

Question 13

What is a third-party beneficiary? Does that party always need to be listed in the contract?

Accepted Answer

A third-party beneficiary is created whe...

Question 14

Ned and Trayvon enter into a contract for Ned to buy goods from Trayvon. The contract contains an antiassignment clause. Ned breaches the contract to pay for the goods after Trayvon delivers the items as required by contract. Trayvon does not want to sue for breach, so instead he assigns the right to pursue damages for breach of contract to Melissa. Is the assignment valid?

Accepted Answer

A)   No, because the antiassignment clause prohibits the assignment.
B)   No, because it would increase Ned's duties to have to pay Melissa.
C)   Yes, but only if the assignment complies with the statute of frauds.
D)   Yes, because antiassignment clauses do not affect the right to receive damages for breach of contract to sell goods or services.
E)   Yes, because antiassignment clauses are no longer valid if any part of the contract is not performed.F) C) and E)
G) D) and E)

Question 15

A third party who benefits from a contract in which the promisor agrees to pay the promisee's debt is a[n] ________ beneficiary.

Accepted Answer

A)   Creditor
B)   Donee
C)   Incidental
D)   Promised
E)   AvowedF) All of the above
G) A) and D)

Question 16

Which statement is true with respect to whether a contract may be assigned even in the presence of an antiassignment clause?

Accepted Answer

A)   Assignments made by operation of law may be assigned, but no other assignments may be made in the presence of an antiassignment clause.
B)   Assignments for the right to receive monetary payments may be assigned, but no other assignments may be made in the presence of an antiassignment clause.
C)   Assignments made by operation of law, assignments for the right to receive monetary payments, and assignments for the right to receive damages for a breach of contract to sell goods or services may be assigned even in the presence of an antiassignment clause.
D)   No contractual rights or duties may be assigned in the presence of an antiassignment clause.
E)   Antiassignment clauses are void as against public policy and have no effect on the right of assignment.F) B) and D)
G) A) and B)

Question 17

In order for an assignment to be valid, you must use an assignment form.

Accepted Answer

A) True 
 B)False

Question 18

Creditor beneficiaries can enforce their rights under a contract whenever the contract is valid.

Accepted Answer

A) True 
 B)False

Question 19

Theresa agrees to mow Huan's yard for $300 for the summer. Huan wishes to assign the contract to his grandmother. Theresa objects because Huan'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 Theresa and Huan?

Accepted Answer

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

Question 20

Hilda transfers her rights to a contract to George who is a third party. Hilda is known as the ________ and George is the ________.

Accepted Answer

A)   transferor, transferee
B)   transferee, transferor
C)   creditor, debtor
D)   assignor, assignee
E)   assignee, assignorF) B) and D)
G) B) and C)

Exam 19: Third-Party Rights to Contracts

In order for an assignment to be valid, you must use an assignment form.

Correct Answer
verified

When an assignor transfers her rights to an assignee, the assignor legally gives up all rights to collect on a contract.

Correct Answer
verified

A third party who benefits from a contract in which the promisor agrees to pay the promisee's debt is a[n] ________ beneficiary.

Correct Answer
verified

Correct Answer
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Raymond finds out that the city of Mornady has a contract with ACME company to pave the streets in front of his house. Paving the street will increase the value of his property. Raymond would be a[n] ________ beneficiary to the contract.

Correct Answer
verified

Which of the following is true regarding the rights of an incidental beneficiary to a contract to sue to recover incidental rights?

Correct Answer
verified

Jimmy and Penny enter into a contract. Jimmy transfers his rights under the contract to Luis. Luis is a(n) :

Correct Answer
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Correct Answer
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What type of third-party beneficiary is Bobby?

Correct Answer
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Hilda transfers her rights to a contract to George who is a third party. Hilda is known as the and George is the .

Correct Answer
verified

Correct Answer
verified

What is a third-party beneficiary? Does that party always need to be listed in the contract?

Correct Answer
verified
A third-party beneficiary is created whe...
View Answer

What tests do the courts use to determine whether a party is an intended or incidental beneficiary?

Correct Answer
verified
The courts ask if a reasonable person in...
View Answer

Correct Answer
verified

The party who makes the promise that benefits the third party is the ________ in a third-party beneficiary contract.

Correct Answer
verified

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

Which statement is true with respect to whether a contract may be assigned even in the presence of an antiassignment clause?

Correct Answer
verified

Correct Answer
verified

Creditor beneficiaries can enforce their rights under a contract whenever the contract is valid.

Correct Answer
verified

Exam 19: Third-Party Rights to Contracts

In order for an assignment to be valid, you must use an assignment form.

Correct AnswerverifiedShow Answer

When an assignor transfers her rights to an assignee, the assignor legally gives up all rights to collect on a contract.

Correct AnswerverifiedShow Answer

A third party who benefits from a contract in which the promisor agrees to pay the promisee's debt is a[n] ________ beneficiary.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Raymond finds out that the city of Mornady has a contract with ACME company to pave the streets in front of his house. Paving the street will increase the value of his property. Raymond would be a[n] ________ beneficiary to the contract.

Correct AnswerverifiedShow Answer

Which of the following is true regarding the rights of an incidental beneficiary to a contract to sue to recover incidental rights?

Correct AnswerverifiedShow Answer

Jimmy and Penny enter into a contract. Jimmy transfers his rights under the contract to Luis. Luis is a(n) :

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What type of third-party beneficiary is Bobby?

Correct AnswerverifiedShow Answer

Hilda transfers her rights to a contract to George who is a third party. Hilda is known as the ________ and George is the ________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What is a third-party beneficiary? Does that party always need to be listed in the contract?

Correct AnswerverifiedA third-party beneficiary is created whe...View AnswerShow Answer

What tests do the courts use to determine whether a party is an intended or incidental beneficiary?

Correct AnswerverifiedThe courts ask if a reasonable person in...View AnswerShow Answer

Correct AnswerverifiedShow Answer

The party who makes the promise that benefits the third party is the ________ in a third-party beneficiary contract.

Correct AnswerverifiedShow Answer

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

Which statement is true with respect to whether a contract may be assigned even in the presence of an antiassignment clause?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Creditor beneficiaries can enforce their rights under a contract whenever the contract is valid.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Hilda transfers her rights to a contract to George who is a third party. Hilda is known as the and George is the .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A third-party beneficiary is created whe...
View Answer

Correct Answer
verified
The courts ask if a reasonable person in...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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