Question 1

Briefly discuss the enforceability of contracts by third parties.

Accepted Answer

Contracts can be enforced by third parti...

Question 2

An assignment:

Accepted Answer

A)  is generally revocable if it is gratuitous and is either oral or written.
B)  for consideration is irrevocable.
C)  becomes valid when the obligor receives notice of the assignment.
D)  must follow formalities. B

Question 3

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.

Question 4

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 5

If Valley Bridge contracts with Rainbow Painters to paint a bridge and the contract requires that only Sherwin Williams paint be used,then Sherwin Williams,as third party beneficiary will be able to enforce the contract against either Valley Bridge or Rainbow Painters.

Accepted Answer

A) True 
 B)False

Question 6

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.Under this arrangement the rock group is the:

Accepted Answer

A)  assignor.
B)  assignee.
C)  delegator.
D)  delegatee. A

Question 7

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 8

Robert hired James,a CPA,to prepare his tax returns.James was too busy and delegated the work to Sara,also a CPA.This delegation is:

Accepted Answer

A)  enforceable,as Sara is also a CPA.
B)  enforceable,as there was no expectation James would do the work.
C)  not enforceable,as Robert hired James to perform personal services.
D)  not enforceable,as this violates public policy.

Question 9

Most types of duties may be delegated.

Accepted Answer

A) True 
 B)False

Question 10

Kirk purchases a sailboat on credit from Lakefront Sales,and Lakefront keeps a security interest in the boat.Lakefront then assigns the security interest to First Finance Co.Explain what having a security interest means.Under the UCC,what defenses can Kirk assert against First Finance?

Accepted Answer

A security interest is a legal right in personal property that assures payment.Lakefront has a right to take the sailboat back if Kirk fails to make his payments.First Finance,the assignee of the security interest,generally has all the rights Lakefront Sales had.Under UCC Section 9-404,Kirk may generally assert any defense against First Finance that arose from the contract,such as refusal to continue making payments because the boat has a defective hull.Also,Kirk may generally assert any defense that arose before notice of assignment for example,if Lakefront Sales committed fraud in the sale of the boat.

Question 11

Generally,the assignment of the obligation to perform personal services is valid,as long as the services are equivalent in value.

Accepted Answer

A) True 
 B)False

Question 12

An assignment is valid and enforceable against all parties:

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 13

Most,but not all,contract rights are assignable.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following duties can probably be delegated?

Accepted Answer

A)  An agreement to perform an operation.
B)  A contract to paint a picture.
C)  An agreement by an attorney to draft a contract.
D)  An agreement to paint a house.

Question 15

An assignment is effective but not necessarily enforceable from the moment it is made,regardless of whether the assignor notifies the obligor.

Accepted Answer

A) True 
 B)False

Question 16

Tyron purchased a vacant lot and entered into a contract with BZ Inc.to construct a shopping center on the site.Douglas heard about this contract and built a restaurant on an adjoining piece of property because of the planned shopping center.Tyron was unable to raise the necessary capital and was unable to perform the contract with BZ,Inc.Douglas sued Tyron for breach of contract as a third party beneficiary.Douglas will probably:

Accepted Answer

A)  win as a third party creditor beneficiary.
B)  win as a third party donee beneficiary.
C)  lose as a third party incidental beneficiary.
D)  lose as a third party creditor beneficiary.

Question 17

If Velma,as a birthday present,assigns to Jim her contractual right to collect $50 from Wood Co. ,this would be a gratuitous assignment.

Accepted Answer

A) True 
 B)False

Question 18

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 19

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 20

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.

Exam 15: Third parties

Briefly discuss the enforceability of contracts by third parties.

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

An assignment:

Correct Answer
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B

Correct Answer
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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
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If Valley Bridge contracts with Rainbow Painters to paint a bridge and the contract requires that only Sherwin Williams paint be used,then Sherwin Williams,as third party beneficiary will be able to enforce the contract against either Valley Bridge or Rainbow Painters.

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.Under this arrangement the rock group is the:

Correct Answer
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A

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

Correct Answer
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Robert hired James,a CPA,to prepare his tax returns.James was too busy and delegated the work to Sara,also a CPA.This delegation is:

Correct Answer
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Most types of duties may be delegated.

Correct Answer
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Kirk purchases a sailboat on credit from Lakefront Sales,and Lakefront keeps a security interest in the boat.Lakefront then assigns the security interest to First Finance Co.Explain what having a security interest means.Under the UCC,what defenses can Kirk assert against First Finance?

Generally,the assignment of the obligation to perform personal services is valid,as long as the services are equivalent in value.

Correct Answer
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An assignment is valid and enforceable against all parties:

Correct Answer
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Most,but not all,contract rights are assignable.

Correct Answer
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Which of the following duties can probably be delegated?

Correct Answer
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An assignment is effective but not necessarily enforceable from the moment it is made,regardless of whether the assignor notifies the obligor.

Correct Answer
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Correct Answer
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If Velma,as a birthday present,assigns to Jim her contractual right to collect $50 from Wood Co. ,this would be a gratuitous assignment.

Correct Answer
verified

Correct Answer
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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
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The status of a third party is determined by:

Correct Answer
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Exam 15: Third parties

Briefly discuss the enforceability of contracts by third parties.

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

An assignment:

Correct AnswerverifiedB

Correct AnswerverifiedShow 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

If Valley Bridge contracts with Rainbow Painters to paint a bridge and the contract requires that only Sherwin Williams paint be used,then Sherwin Williams,as third party beneficiary will be able to enforce the contract against either Valley Bridge or Rainbow Painters.

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.Under this arrangement the rock group is the:

Correct AnswerverifiedA

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

Correct AnswerverifiedShow Answer

Robert hired James,a CPA,to prepare his tax returns.James was too busy and delegated the work to Sara,also a CPA.This delegation is:

Correct AnswerverifiedShow Answer

Most types of duties may be delegated.

Correct AnswerverifiedShow Answer

Kirk purchases a sailboat on credit from Lakefront Sales,and Lakefront keeps a security interest in the boat.Lakefront then assigns the security interest to First Finance Co.Explain what having a security interest means.Under the UCC,what defenses can Kirk assert against First Finance?

Generally,the assignment of the obligation to perform personal services is valid,as long as the services are equivalent in value.

Correct AnswerverifiedShow Answer

An assignment is valid and enforceable against all parties:

Correct AnswerverifiedShow Answer

Most,but not all,contract rights are assignable.

Correct AnswerverifiedShow Answer

Which of the following duties can probably be delegated?

Correct AnswerverifiedShow Answer

An assignment is effective but not necessarily enforceable from the moment it is made,regardless of whether the assignor notifies the obligor.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If Velma,as a birthday present,assigns to Jim her contractual right to collect $50 from Wood Co. ,this would be a gratuitous assignment.

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

The status of a third party is determined by:

Correct AnswerverifiedShow Answer

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

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B

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A

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