Question 1

Contractual duties are assignable.

Accepted Answer

The answer of Contractual duties are assignable....

Question 2

Ron owes Lloyd $500 due March 1.Lloyd assigns his right to the money to Lou,but neither Lloyd nor Lou notifies Ron.On March 1,Ron pays Lloyd the $500.Ron is not discharged from his obligation,but is liable to Lou for the money.

Accepted Answer

Ron is discharged from his obligation because he was not notified of the assignment from Lloyd to Lou and made the payment in good faith to Lloyd, the original party to whom he owed the money.

Question 3

In an assignment or delegation,the third parties' rights or duties arise after the contract is made.

Accepted Answer

In an assignment or delegation, the third party's rights or duties arise after the contract is made. This means that the initial parties to the contract are bound by its terms and obligations before any third parties become involved. Once an assignment or delegation takes place, the third party may then have the right to benefits or duties under the contract, depending on the specific terms of the arrangement.

Question 4

The UCC prohibits assignments of $5,000 or more.

Accepted Answer

The UCC does not prohibit assignments of $5,000 or more.

Question 5

Owen has a contract to build a garage.He delegates the wiring job to a local electrician who improperly performs it.Owen is responsible,even though he delegated the duty.

Accepted Answer

As the owner of the project, Owen holds ultimate responsibility for ensuring the work is done properly, even if he delegates certain tasks to other workers. Therefore, he would be held responsible for any improper work done by the electrician.

Question 6

Lauren received a $1,500 scholarship to attend the local community college.She decides not to attend college that year,so she can assign her right to the scholarship to her friend,Sean.

Accepted Answer

Scholarships are typically considered personal rights based on the recipient's qualifications and cannot be transferred or assigned to another person.

Question 7

Donee beneficiaries and incidental beneficiaries are called intended beneficiaries.

Accepted Answer

Donee beneficiaries are considered intended beneficiaries because the contract is made for their benefit, but incidental beneficiaries are not considered intended beneficiaries as they benefit from the contract indirectly and without the specific intention of the contracting parties.

Question 8

A creditor beneficiary is a type of incidental beneficiary.

Accepted Answer

A creditor beneficiary is a third party that benefits from a contract specifically intended to pay a debt or obligation, whereas an incidental beneficiary benefits from a contract indirectly and without intention from the contracting parties.

Question 9

The UCC imposes a writing requirement on all assignments of $500 or more.

Accepted Answer

The UCC does not impose a writing requirement on all assignments of $500 or more. However, certain types of transactions under the UCC may require a writing, such as the sale of goods for $500 or more.

Question 10

In a third-party beneficiary contract,the third party's rights arise after the contract is made.

Accepted Answer

The answer of In a third-party beneficiary contract,the third party's...

Question 11

Generally,rights under an option contract are not assignable.

Accepted Answer

Rights under an option contract are generally assignable unless the contract specifies otherwise or the assignment would materially change the obligations of the optionor.

Question 12

An assignor is bound by any express warranties he makes to the assignee with respect to the right assigned.

Accepted Answer

An assignor is indeed bound by any express warranties he makes to the assignee regarding the right assigned. This means that if the assignor makes any promises or guarantees to the assignee about the right being assigned, he must fulfill those promises or guarantees or face legal consequences.

Question 13

Walter has a contract with a Speed-E Painters to paint his house.When he realizes that he will have some unexpected medical expenses,he calls the Speed-E Painters to cancel the contract.Walter's next door neighbor can sue Walter to enforce the contract,because if Walter improves his own property,his neighbor's property will also be worth more money.

Accepted Answer

Walter's neighbor does not have standing to sue to enforce the contract, as they are not a party to the contract and do not have a direct interest in its performance. The neighbor's speculation about their own property value is not sufficient to establish standing.

Question 14

In a minority of states,the first of two or more assignees to give notice to the obligor is entitled to the assigned performance.

Accepted Answer

This is known as the "first in time, first in right" rule for assignment of contract rights. It is followed in some states, but not all.

Question 15

The Restatement and Article 2 of the Code provide that,unless circumstances indicate the contrary,a contract term that prohibits the assignment of a contract bars only the delegation to the assignee of the assignor's duty of performance and does not bar the assignment of contract rights.

Accepted Answer

The Restatement and Article 2 of the Code indeed provide that a contract term that prohibits the assignment of a contract bars only the delegation to the assignee of the assignor's duty of performance and does not bar the assignment of contract rights.

Question 16

The student government of State University has a contract with a famous rock band to perform at the university on homecoming weekend.The band cannot assign its rights and delegate its duties under this contract.

Accepted Answer

This clause in the contract is known as an anti-assignment clause, which prohibits the band from transferring its obligations to a third party. Therefore, the band cannot assign its rights or delegate its duties under this contract.

Question 17

Third party rights in contracts can arise by assignment of rights,delegation of duties,or express terms in third party beneficiary contracts.

Accepted Answer

Third party rights can arise in these ways as stated in the statement.

Question 18

Assignment of rights is the voluntary transfer to a third party of the rights arising from a contract.

Accepted Answer

Assignment of rights is a legal concept that allows parties to transfer their rights and obligations to a third party without affecting the terms of the original contract.

Question 19

The law governing assignments arises solely from the common law of contracts.

Accepted Answer

The law governing assignments is influenced by both the common law of contracts and statutory law, depending on the jurisdiction and the specific type of assignment involved.

Question 20

The Restatement adopts the majority American rule and provides that,where there are successive assignments of the same right,the first assignee in point of time prevails.

Accepted Answer

The answer of The Restatement adopts the majority American rule...

Quiz 16: Third Parties to Contracts