Question 1

Carl is a doting father who wants to reward his son,Matt for graduating from college.Carl contracts with a local auto dealer to provide Matt with a new BMW.Under the contract,Carl promises to pay the dealer in exchange for the dealer's promise to deliver the car to Matt.The dealer then backs out of the deal and Matt wants to sue him.In this case:

Accepted Answer

A third person is a donee beneficiary if the promisee's primary purpose in contracting was to make a gift of the contracted performance to the third party.Either the promisee or the donee beneficiary can sue the promisor for not performing the promise.The beneficiary can recover the value of the promised performance,while the promisee can recover damages resulting from nonperformance (usually only nominal damages).

Question 2

Delegations can be prohibited by:

Accepted Answer

Like assignments,not all duties are delegable.Public policy can prevent the delegation of duties.

Question 3

Unless an assignment agreement clearly indicates a contrary intent,courts today tend to interpret assignments as including a delegation of the assignor's duties.A promise on the part of the assignee to perform these duties:

Accepted Answer

Unless the assignment agreement clearly indicates a contrary intent,courts today tend to interpret assignments as including a delegation of the assignor's duties.A promise on the part of the assignee to perform these duties is implied,and this implied promise is enforceable by either the promisor or the assignor.Both the Code and the Restatement support this interpretation.

Question 4

The promisor who delegates duties is ______ to the promisee if the party to whom the duties were delegated fails to satisfactorily perform them.

Accepted Answer

The promisor who delegates duties is still liable to the promisee if the party to whom the duties were delegated fails to satisfactorily perform them.This rule is necessary to make contracts truly binding; otherwise,a promisor could avoid virtually all liability by merely delegating duties she did not want to perform.

Question 5

Which of the following is true for employment contracts?

Accepted Answer

Contracts involving personal rights are also generally nonassignable.These are contracts in which some element of personal skill,credit,character,or judgment is an essential part of the agreement.In such a case,the substitution of the assignee for the assignor would materially change the nature of the performance required of the promisor.Employment contracts are therefore generally held nonassignable.

Question 6

A promisor who renders performance to the assignor without notice of the assignment:

Accepted Answer

Assignees should promptly notify the promisor of the assignment.This is necessary because the promisor who renders performance to the assignor without notice of the assignment has no further liability under the contract.

Question 7

Rocky,who was voted the most valuable player of NYU's basketball team,can:

Accepted Answer

Like assignments,not all duties are delegable.If performance depends on the personal skill,character,or judgment of the promisor,however,it may not be delegated.Thus,in Rocky's case,his duty as a player is not delegable.

Question 8

An assignor who assigns the contract will be relieved of the duty to perform to the other party on the original contract when:

Accepted Answer

A novation is a new,separate agreement by the promisee to release the original promisor from liability in exchange for a third party's agreement to assume the promisor's duties.

Question 9

For an assigned claim to be valid:

Accepted Answer

Assignors who are paid for making an assignment are potentially liable to assignees for certain implied guarantees.These guarantees are imposed by law unless the assignment agreement clearly indicates to the contrary.One such guarantee is that the assigned claim is valid,which implies that the contract is not illegal,and it is not voidable for any other reason known to the assignor.

Question 10

Assignments of future wages are not effective because:

Accepted Answer

Assignments contrary to public policy are also not effective.Assignments of future wages are an example.In order to protect wage earners from unwisely impoverishing themselves,some states prohibit wage assignments by statute.Others allow such assignments but regulate them in various ways,such as limiting the amount that may be assigned.

Question 11

Zeta contracts to perform a violin solo for Pat.Zeta assigns the contract to Roy.Is this a valid delegation of duty?

Accepted Answer

Like assignments,not all duties are delegable.If performance depends on the personal skill,character,or judgment of the promisor,however,it may not be delegated.Thus,in Zeta's case,her duty to play the violin is not delegable because it involves her personal skill.

Question 12

Assignees:

Accepted Answer

An assignee is entitled to all the rights his or her assignor had under the assigned contract,including the right to the promisor's performance.If the promisor does not perform,the assignee can sue for nonperformance.

Question 13

When a promisor appoints another person to perform their duties under a contract:

Accepted Answer

When a promisor appoints another to perform his duties under a contract,this is called a delegation.

Question 14

Creditor beneficiaries can:

Accepted Answer

If the promisor's performance will satisfy a legal duty that the promisee owes a third party,the third party is a creditor beneficiary.The creditor beneficiary has rights against both the promisee and the promisor.

Question 15

Notice to the promisor is important to address the issues of:

Accepted Answer

Assignees should promptly notify the promisor of the assignment.This is necessary because the promisor who renders performance to the assignor without notice of the assignment has no further liability under the contract.Notice to the promisor may be important in one other situation.If the assignor later wrongfully assigns the contract to a second assignee who pays for it without notice of the first assignment,a question of priority results.

Question 16

Why are contracts prohibiting competition with a buyer of a business or an employer assignable?

Accepted Answer

Contracts not to compete with a buyer of a business or an employer are generally assignable with the sale of the business.The purpose of such contracts is to protect the goodwill of the business (the value of the business as a going concern),an asset that can be sold with the business.

Question 17

Once a donee or creditor beneficiary has accepted the contract,the original parties:

Accepted Answer

If the parties to the contract intended to benefit a third party,the third party can enforce the contract.There are two classes of third-party beneficiaries that have such enforcement rights: donee beneficiaries and creditor beneficiaries.Once a donee or creditor beneficiary has accepted the contract,or relied on it,the original parties cannot cancel or modify the contract without the third party's consent,unless the original contract gives them the right to do so.

Question 18

A donee beneficiary:

Accepted Answer

A third person is a donee beneficiary if the promisee's primary purpose in contracting was to make a gift of the contracted performance to the third party.

Question 19

Which of the following implied guarantee is made by assignors who are paid for making an assignment?

Accepted Answer

Assignors who are paid for making an assignment are potentially liable to assignees for certain implied guarantees.These guarantees are imposed by law unless the assignment agreement clearly indicates to the contrary.One such guarantee is that the assignor has good title to the rights assigned.

Question 20

In the will,Lydia's mother has named Lydia as the owner of her farm and named her as a beneficiary in her insurance policy.Lydia is:

Accepted Answer

A third person is a donee beneficiary if the promisee's primary purpose in contracting was to make a gift of the contracted performance to the third party.Life insurance contracts are a common form of donee beneficiary contract.

Quiz 17: Third Parties Contract Rights