Question 1

A partial assignment is a transfer of a portion of the contractual rights to one or more assignees.

Accepted Answer

A partial assignment transfers only a portion of the contractual rights to one or more assignees, while a full assignment transfers all rights to the assignee.

Question 2

Annette entered into a contract with a local truck dealer to have a new truck delivered to her daughter, Sue, as a graduation present. In this contract, Sue is:
A) an incidental beneficiary.
B) a donee beneficiary.
C) a creditor beneficiary.
D) an assignor.

Accepted Answer

Sue is a donee beneficiary because she is receiving the truck as a gift from Annette. As the recipient of the gift, she is considered a beneficiary under the contract.

Question 3

A promisor may assert the defense of contractual modification or rescission, even if an intended beneficiary's rights
have vested.

Accepted Answer

The answer of A promisor may assert the defense of...

Question 4

The voluntary transfer of a contractual right to a third party is known as a(n):
A) implied warranty.
B) assignment.
C) delegation.
D) novation.

Accepted Answer

An assignment is the voluntary transfer of a contractual right to a third party. Implied warranty refers to an unwritten guarantee that a product or service is of a certain quality. Delegation is the transfer of a duty to a third party. Novation is the substitution of a new contract for an existing one.

Question 5

Which of the following duties would not be delegable?
A) John has a contractual duty to pay Isaac $50.
B) Karl has a contractual duty to deliver 50 bushels of corn to Michael by October 1.
C) Jeffrey has a duty to mow Georgia's lawn at least once a week.
D) Arthur has a duty to teach an accounting class at a community college during the fall semester.

Accepted Answer

Duties that require personal skills or judgments, such as teaching a class, are typically not delegable because they are based on the unique abilities or qualifications of the individual contracted to perform them.

Question 6

A(n) is an intended beneficiary of a contract who receives the benefits of the contract as a gift.
A) incidental beneficiary
B) intended beneficiary
C) assignor
D) donee beneficiary

Accepted Answer

A donee beneficiary is someone who receives the benefits of a contract as a gift, rather than as a result of fulfilling a contractual obligation. This is different from an intended beneficiary, who is specifically named in the contract and is a party to the agreement.

Question 7

Stark enters into a contract with a contractor to build a large shopping mall in River City. Donner will benefit from this contract since his restaurant is adjacent to the planned mall. Donner in this instance is a(n):
A) implied beneficiary.
B) partial beneficiary.
C) donee beneficiary.
D) incidental beneficiary.

Accepted Answer

Donner is an incidental beneficiary because although he will benefit from the construction of the shopping mall, he is not a party to the contract and his benefit is unintentional.

Question 8

The party to whom a contractual duty of performance is owed is known as the:
A) obligee.
B) obligor.
C) assignee.
D) assignor.

Accepted Answer

The party who is owed the duty of performance in a contract is known as the obligee. Therefore, choice A is the correct answer. The obligor is the party who owes the duty of performance, while an assignee is a third party who receives the right to receive the benefits or obligations of the contract, and an assignor is the party who transfers those rights or obligations to the assignee.

Question 9

As a general rule, most contract rights are assignable.

Accepted Answer

Most contract rights, unless specifically prohibited by the contract or by law, are assignable to another party.

Question 10

Betty owes Agatha $1,000. On March 1 Agatha, for value, assigned the debt to Clara. Thereafter, on March 30, Agatha assigned the same right to Diane. Under the:
A) American rule, Clara will prevail over Diane.
B) American rule, the first assignee to notify Betty will prevail.
C) Restatement rule, the first assignee to notify Betty will prevail.
D) English rule, Clara will prevail over Diane.

Accepted Answer

The answer of Betty owes Agatha $1,000. On March 1...

Question 11

A(n) is a third party who obtains possible benefits but no rights under a contract.
A) incidental beneficiary
B) intended beneficiary
C) assignor
D) donee beneficiary

Accepted Answer

An incidental beneficiary is a third party who obtains possible benefits but no rights under a contract. They are not intended to benefit from the contract, but may receive some benefits as a result of it. Option B is incorrect as intended beneficiaries have enforceable rights under the contract. Option C refers to the party that transfers their rights and obligations under a contract to a third party, and option D refers to a beneficiary who receives a gift or donation from a contract party.

Question 12

Theresa has a contract to teach eighth grade at Washington Middle School. She decided she could make more money writing a book, so she assigns her teaching contract to her friend, Stephanie, who is also a licensed teacher. The duties under the teaching contract:
A) are nondelegable.
B) which Theresa has attempted to delegate are personal in nature.
C) would no longer be required of Theresa if the school district agrees to accept Stephanie's services, because a novation would occur, which would relieve Theresa of her obligation to the school district.
D) All of these are correct.

Accepted Answer

The answer of Theresa has a contract to teach eighth...

Question 13

A(n)
A) assignment
B) delegation
C) partial assignment
D) novation

Accepted Answer

Novation occurs when one party transfers their rights and obligations to a third party, who then assumes those responsibilities fully. This is different from delegation, where the original party retains some responsibilities, and partial assignment, where only some rights or obligations are transferred.

Question 14

As a general rule, partial assignments of contract rights are not enforceable.

Accepted Answer

Partial assignments of contract rights can be enforceable, but there are certain requirements that must be met, such as obtaining the consent of the other party to the contract. However, there is a risk that a partial assignment may be found to be an invalid "splitting" of the contract, which would render it unenforceable. Overall, the enforceability of a partial assignment will depend on the specific circumstances and the language of the contract.

Question 15

Bill wants to buy a new car. He goes to the bank to get a loan for the purchase, and signs an agreement to pay $10.00 per month in premiums on a term life insurance policy which names the bank as the recipient of the policy proceeds in the event of his death before the loan is repaid. The bank is a(n):
A) incidental beneficiary.
B) creditor beneficiary.
C) donee beneficiary.
D) assignee.

Accepted Answer

The bank is a creditor beneficiary because it will benefit from the policy proceeds if Bill dies before the loan is repaid.

Question 16

Courts will enforce contracts for the benefit of all but which of the following?
A) Donee beneficiaries
B) Creditor beneficiaries
C) Incidental beneficiaries
D) Intended beneficiaries

Accepted Answer

Courts typically enforce contracts for the benefit of donee beneficiaries, creditor beneficiaries, and intended beneficiaries because these parties are recognized as having enforceable rights under the contract. Incidental beneficiaries, however, do not have enforceable rights because the benefits they receive from the contract are unintended and incidental, not a result of specific intent by the parties to the contract to benefit them.

Question 17

Anita owes Brad $75,000. Brad signs a written statement granting Glen a gratuitous assignment of his rights from Anita. Brad delivers the signed statement to Glen before Brad dies. The assignment is:
A) irrevocable because of the delivery of the statement.
B) terminated upon Brad's death.
C) irrevocable because of the signing of the statement.
D) invalid because it is revocable.

Accepted Answer

Delivery of a written statement assigning rights to another party makes the assignment irrevocable, regardless of the assignor's subsequent death. Therefore, option A is the correct answer.

Question 18

Unless otherwise provided by statute, an assignment may be oral.

Accepted Answer

Generally, assignments can be oral unless there is a statutory provision stating otherwise. However, it is always advisable to have written documentation of any assignment to avoid any disputes or misunderstandings.

Question 19

Bill has a right against Heather and assigns it for $100 to Dan. Later, Bill grants Heather a release. Bill:
A) is liable to Dan for damages because he breached an implied warranty.
B) has no liability to Dan because he did not expressly warrant that he would not impair the assignment.
C) has no liability to Dan because the only implied warranty he made was that the assigned right actually existed at the time of the assignment.
D) was acting contrary to public policy by assigning a contractual right for money.

Accepted Answer

Bill is liable to Dan for damages because by granting Heather a release, he impaired the value of the right he had assigned to Dan. This action breaches the implied warranty that comes with an assignment, which includes the warranty that the assignor will not do anything to impair the value of the assigned right.

Question 20

Professor Dought has a life insurance policy on his own life that provides that in the event of his death, his mother will receive the proceeds. Professor Dought's mother is a(n):
A) incidental beneficiary.
B) creditor beneficiary.
C) donee beneficiary.
D) assignee.

Accepted Answer

This is an example of a donee beneficiary because Professor Dought's mother is receiving the proceeds as a gift (donee) rather than fulfilling a legal obligation (creditor) or being indirectly affected by the contract (incidental). It is also not an assignment because Professor Dought is still the policy owner and can choose to change the beneficiary at any time.

Quiz 16: Third Parties to Contracts

A partial assignment is a transfer of a portion of the contractual rights to one or more assignees.

Annette entered into a contract with a local truck dealer to have a new truck delivered to her daughter, Sue, as a graduation present. In this contract, Sue is:

A promisor may assert the defense of contractual modification or rescission, even if an intended beneficiary's rights have vested.

The voluntary transfer of a contractual right to a third party is known as a(n) :

Which of the following duties would not be delegable?

A(n) is an intended beneficiary of a contract who receives the benefits of the contract as a gift.

Stark enters into a contract with a contractor to build a large shopping mall in River City. Donner will benefit from this contract since his restaurant is adjacent to the planned mall. Donner in this instance is a(n) :

The party to whom a contractual duty of performance is owed is known as the:

As a general rule, most contract rights are assignable.

Betty owes Agatha $1,000. On March 1 Agatha, for value, assigned the debt to Clara. Thereafter, on March 30, Agatha assigned the same right to Diane. Under the:

A(n) is a third party who obtains possible benefits but no rights under a contract.

Theresa has a contract to teach eighth grade at Washington Middle School. She decided she could make more money writing a book, so she assigns her teaching contract to her friend, Stephanie, who is also a licensed teacher. The duties under the teaching contract:

A(n)

As a general rule, partial assignments of contract rights are not enforceable.

Courts will enforce contracts for the benefit of all but which of the following?

Anita owes Brad $75,000. Brad signs a written statement granting Glen a gratuitous assignment of his rights from Anita. Brad delivers the signed statement to Glen before Brad dies. The assignment is:

Unless otherwise provided by statute, an assignment may be oral.

Bill has a right against Heather and assigns it for $100 to Dan. Later, Bill grants Heather a release. Bill:

Professor Dought has a life insurance policy on his own life that provides that in the event of his death, his mother will receive the proceeds. Professor Dought's mother is a(n) :