Question 1

An intended donee beneficiary may enforce the contract against the promisor only.

Accepted Answer

An intended donee beneficiary is a third party beneficiary who is meant to receive a benefit under a contract that was made between two other parties (the promisor and the promisee). The intended donee beneficiary has the right to enforce the contract against the promisor, but not against the promisee. This means that if the promisor does not fulfill their obligation to provide the intended benefit to the donee beneficiary, the beneficiary can take legal action against the promisor to enforce the contract.

Question 2

The general rule is that an assignee stands in the shoes of the assignor. He acquires the rights of the assignor but acquires no new or additional rights.

Accepted Answer

This is the general rule of assignment, where the assignee steps into the shoes of the assignor and gains the same rights, but does not gain any new or additional rights.

Question 3

Carlos voluntarily transfers to Opal his right to receive a payment of $125 due to him from Scott. Scott is the assignee.

Accepted Answer

In this scenario, Opal is the assignee because Carlos transferred his right to receive payment to Opal. Scott is the obligor, the one who owes the payment.

Question 4

Under Article 2 of the UCC, a right to damages for breach of the whole contract can be assigned despite a contractual provision to the contrary.

Accepted Answer

Article 2 of the UCC allows for the assignment of the right to damages for breach of the entire contract even if the contract includes a provision against assignment.

Question 5

A person who owes a duty under a contract is an obligee.

Accepted Answer

A person who owes a duty under a contract is known as the obligor, while the obligee is the party to whom the duty, or obligation, is owed.

Question 6

To protect the obligor or the public interest, some contract rights are not assignable.

Accepted Answer

Certain contract rights, such as personal services contracts, cannot be assigned for the protection of the obligor or the public interest.

Question 7

UCC Article 9 requires certain assignments to be in writing.

Accepted Answer

According to UCC Article 9, certain assignments of a security interest in collateral must be in writing in order to be effective against third parties. This is outlined in Section 9-203(b) of the UCC.

Question 8

A gratuitous assignment is revocable by the assignor.

Accepted Answer

A gratuitous assignment, also known as a gift assignment, can be revoked by the assignor at any time before it is accepted by the assignee. This is because there is no consideration given by the assignee in exchange for the assignment. Therefore, the assignor retains the right to revoke the assignment.

Question 9

A party delegating his duty to a third party is known as a delegator.

Accepted Answer

This statement is true. A party who delegates their duty to a third party is often referred to as a delegator.

Question 10

If a contract explicitly provides that it may be assigned, then rights under it are assignable even if the assignment would change the duty, risk, or burden of performance on the obligor.

Accepted Answer

If a contract explicitly provides for assignability, then the rights can be assigned despite any change in duty, risk, or burden of performance on the obligor. This is known as an "assignment clause."

Question 11

In a third-party beneficiary contract, the third party's rights arise at the time the contract is formed.

Accepted Answer

In a third-party beneficiary contract, the third party's rights arise at the time the contract is formed, meaning that they have the right to enforce the contract as if they were a party to it. This is established at the time the contract is created and agreed upon by the original parties.

Question 12

After an assignment, only the assignee has a right to the obligor's performance.

Accepted Answer

This is true according to the general rule of assignability of contract rights. Once an assignment has taken place, the assignee become the new holder of the right, and the obligor must perform to the assignee rather than the original party to the contract.

Question 13

When a partial assignment is made, the obligor may require all the parties entitled to the promised performance to litigate in one action any issues concerning the contract performance.

Accepted Answer

This is true according to the Uniform Commercial Code (UCC) § 2-210(4).

Question 14

The delegation of a duty still leaves the delegator responsible for the performance of the duty.

Accepted Answer

The delegator cannot completely transfer the responsibility of the duty to the delegate, and remains responsible for ensuring the duty is performed satisfactorily.

Question 15

When the assignee gives consideration in exchange for an assignment, there is a contract between the assignor and the assignee that prevents the assignor from revoking the assignment without the assent of the assignee.

Accepted Answer

This is the principle of the doctrine of irrevocable assignments, which states that once a valid assignment has been made and consideration exchanged, the assignor cannot revoke the assignment without the permission of the assignee.

Question 16

A contract in which a party (the promisor) promises to render a certain performance not to the other party (the promisee) but to a third person (the beneficiary) is called a third-party beneficiary contract.

Accepted Answer

The definition given in the statement is accurate and describes a third-party beneficiary contract.

Question 17

In some states, the vesting of a third party's rights occurs only when the third party learns of the contract and assents to it.

Accepted Answer

This is known as the doctrine of "vesting by knowledge and assent" and is recognized in some states. It means that a third party's rights in a contract only vest when they become aware of the contract and agree to its terms.

Question 18

In general, an assignment includes an implied warranty that the assignor who receives value will do nothing to defeat or impair the assignment once it is delivered.

Accepted Answer

This is known as the implied warranty of good faith and fair dealing, which is a basic principle of contract law. It means that the assignor is expected to act in good faith and honor the terms of the assignment once they have received value for it. If they fail to do so, they may be held liable for any damages or losses suffered by the assignee.

Question 19

An incidental beneficiary has no right to enforce a contract.

Accepted Answer

An incidental beneficiary is a third party who may benefit from a contract, but they do not have any rights to enforce it. Only parties who are explicitly named in a contract have the right to enforce it.

Question 20

An assignee's assent is required for any assignment to be valid.

Accepted Answer

An assignment is a unilateral contract where the assignor transfers rights or benefits to the assignee without necessarily requiring the assent of the assignee for the assignment to be valid.

Quiz 16: Third Parties to Contracts