Question 1

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

Accepted Answer

Delegation refers to the transfer of a contractual duty to a third party.

Question 2

A transfer to a third party of a contractual obligation is known as a(n):
A)assignment of rights.
B)delegation of duties.
C)revocability of assignment.
D)partial assignment.

Accepted Answer

A delegation of duties is when a party to a contract transfers their obligation to perform to a third party. An assignment of rights, on the other hand, transfers the benefits or rights under a contract to a third party. Revocability of assignment refers to the ability to revoke or cancel an assignment, which may or may not be possible depending on the terms of the contract. Partial assignment refers to the transfer of only a portion of the rights or obligations under a contract.

Question 3

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 4

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 someone who may derive benefits from a contract, but has no rights to enforce the contract or demand performance from the contracting parties. This is in contrast to intended beneficiaries and donee beneficiaries, who have legal rights under a contract. An assignor is someone who transfers their rights in a contract to another party.

Question 5

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

Accepted Answer

Delivery of the signed statement to Carl before Brad's death makes the assignment irrevocable. This means that Carl has the legal right to collect the debt owed by Anita, and even if Brad dies, the assignment remains valid. However, if Brad had only signed the statement without delivering it to Carl before his death, the assignment would not have been effective.

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 an intended beneficiary who receives the benefits of the contract as a gift. Incidental beneficiaries are not intended to benefit from the contract, assignors are parties who transfer their rights and obligations under the contract to another party.

Question 7

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.
A)This is both an assignment and a delegation.
B)The duties, which Theresa has delegated, are personal in nature.
C)If the school district agrees to accept Stephanie's services, a novation would occur, which would relieve Theresa of her obligation to the school district.
D)All of the above are correct.

Accepted Answer

Theresa's action involves both an assignment and a delegation because she is transferring her rights and duties to Stephanie. The teaching duties are personal in nature, as they require specific skills and qualifications. If the school district agrees to accept Stephanie, a novation would occur, relieving Theresa of her obligations.

Question 8

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 9

Will 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 is named as the recipient of the insurance proceeds in the event that Will dies before the loan is repaid. As the lender of the money, the bank has a vested interest in ensuring that the loan is repaid, and the life insurance policy provides additional security for the repayment of the loan.

Question 10

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

Accepted Answer

A partial assignment involves transferring a portion of the contractual rights to one or more assignees, while a full assignment is a transfer of all the contractual rights.

Question 11

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 obligee is the party who has the right to receive performance under a contract. This means that the other party, known as the obligor, is obligated to fulfill their duties to the obligee. The terms obligee and obligor are commonly used in contract law to describe the parties involved in a contractual relationship. The assignee and assignor, on the other hand, refer to parties involved in an assignment of rights or obligations under a contract.

Question 12

Professor Doright 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 Doright's mother is a(n):
A)incidental beneficiary.
B)creditor beneficiary.
C)donee beneficiary.
D)assignee.

Accepted Answer

Professor Doright's mother is a donee beneficiary, as she is receiving the proceeds of the life insurance policy as a gift from the policy owner. An incidental beneficiary is someone who may benefit from the policy but is not the intended recipient, a creditor beneficiary is someone to whom the policy owner owes a debt and assigns the policy to as collateral, and an assignee is someone who purchases the policy from the original owner.

Question 13

According to the Restatement, unless circumstances indicate the contrary, a contract term prohibiting assignment of the contract bars both the assignment of rights and the delegation to the assignee of the assignor's duty of performance.

Accepted Answer

The answer of According to the Restatement, unless circumstances indicate...

Question 14

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

Accepted Answer

Donner is an incidental beneficiary because his benefit from the contract is not a primary reason for the contract, but rather just an indirect result of its completion. He did not have any direct involvement in the negotiation or formation of the contract.

Question 15

A(n) __________ is a method of discharging a contract in which a third party becomes bound upon a promise to the obligee.
A)assignment
B)delegation
C)partial assignment
D)novation

Accepted Answer

Novation is a type of contract discharge in which a third party becomes bound upon a promise to the obligee, essentially replacing the original party to the contract. This can occur in situations such as mergers or acquisitions, where one party is replaced by another but the obligations of the original contract remain. Assignments, delegations, and partial assignments do not necessarily involve the introduction of a third party who becomes bound to the contract.

Question 16

Unless otherwise provided by statute, an assignment may be made orally.

Accepted Answer

In general, assignments can be made orally, unless a specific statute or agreement states otherwise. However, it is often recommended to have written documentation to confirm the assignment for legal purposes.

Question 17

Jeff's promise to marry Margaret cannot be transferred to a third party.

Accepted Answer

Promises to marry are personal and cannot be transferred to a third party.

Question 18

Marlene owes Bailey $750 due June 1.Bailey assigns the debt to Greg on May 1, but neither Bailey nor Greg informs Marlene.On June 1, Marlene pays Bailey.Marlene must still pay Greg if Bailey does not turn over the money to Greg.

Accepted Answer

If Marlene was not informed of the assignment, her payment to Bailey discharges her obligation, and she does not have to pay Greg.

Question 19

When contract terms prohibiting the assignment of rights exist, most courts will:
A)strictly construe them.
B)interpret a general term prohibiting assignments as a mere promise not to assign.
C)award the obligor a right to damages for the breach of the terms forbidding the assignment.
D)All of the above.

Accepted Answer

The answer of When contract terms prohibiting the assignment of...

Question 20

Which of the following is true about the vesting of an intended beneficiary's rights?
A)The promisor and promisee may provide that the benefits will never vest.
B)States are consistent in their rules as to when vesting occurs.
C)Vesting cannot require the third party to change position in reliance on the promise made for his benefit.
D)Regardless of whether an intended beneficiary's rights have vested, the promisor and promisee may, by later agreement, vary those rights.

Accepted Answer

The promisor and promisee can agree that the benefits to an intended beneficiary will never vest, meaning the beneficiary's rights can be limited or negated by the terms of the contract.

Quiz 16: Third Parties to Contracts

The transfer of a contract duty to a third party is known as a(n) :

A transfer to a third party of a contractual obligation is known as a(n) :

Which of the following duties would not be delegable?

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

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

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

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.

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

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

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

Professor Doright 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 Doright's mother is a(n) :

According to the Restatement, unless circumstances indicate the contrary, a contract term prohibiting assignment of the contract bars both the assignment of rights and the delegation to the assignee of the assignor's duty of performance.

Stark enters into a contract with a contractor to build a large shopping mall in River City.Donner will greatly benefit from this contract since his convenience store is adjacent to the mall.Donner in this instance is:

A(n) __________ is a method of discharging a contract in which a third party becomes bound upon a promise to the obligee.

Unless otherwise provided by statute, an assignment may be made orally.

Jeff's promise to marry Margaret cannot be transferred to a third party.

Marlene owes Bailey $750 due June 1.Bailey assigns the debt to Greg on May 1, but neither Bailey nor Greg informs Marlene.On June 1, Marlene pays Bailey.Marlene must still pay Greg if Bailey does not turn over the money to Greg.

When contract terms prohibiting the assignment of rights exist, most courts will:

Which of the following is true about the vesting of an intended beneficiary's rights?