The Code provides an exception to the executory promise rule in:
A) the giving of a negotiable instrument.
B) the making of an irrevocable obligation to a third party.
C) the lack of notice.
D) Both the giving of a negotiable instrument and the making of an irrevocable obligation to a third party are correct.

Question

The Code provides an exception to the executory promise rule in:
A) the giving of a negotiable instrument.
B) the making of an irrevocable obligation to a third party.
C) the lack of notice.
D) Both the giving of a negotiable instrument  and the making of an irrevocable obligation to a third party  are correct.

Quizplus · Accepted Answer

According to the executory promise rule, a party cannot assign or transfer their future performance obligations to another party. However, the Code provides an exception to this rule in the case of giving a negotiable instrument or making an irrevocable obligation to a third party. Both options are correct, so the answer is D.

The Code Provides an Exception to the Executory Promise Rule