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Q:
A third party is categorized as a donee beneficiary when:
A. the promisee's primary purpose in contracting is to make a gift of the agreed-on performance to the third party.
B. the benefit derived by the third party was merely an unintended by-product of a contract that was created for the benefit of those who were parties to it.
C. he/she is unable to establish that the contract was made with the intent to benefit him/her.
D. the promisor's performance is intended to satisfy a legal duty that the promisee owes to the third party.
Q:
Denise contracts with Long Life Insurance Co., agreeing to pay premiums in return for which the company agrees to pay $500,000 to Denise's husband Barn when Denise dies. Barn is a(n):
A. creditor beneficiary.
B. donee beneficiary.
C. incidental beneficiary.
D. delegatee.
Q:
Mike has a three-year lease on the apartment he occupies. He has lived there one year. He now wants to leave and go to Aspen, Colorado to be a ski instructor. However, Mike's landlord will not release him from the lease, and threatens to sue him if he breaks his lease. Mike finds Paul to take over the last two years of the lease, but Mike is worried that Paul might cause damage or in other ways inflict loss and that he, Mike, might be held financially responsible. In order to assure Mike that he will be completely discharged from all obligations under his lease, Mike should attempt to bring about:
A. an assignment.
B. a novation.
C. either an assignment or novationit will not affect Mike's future liability.
D. neither an assignment nor a novationboth will not accomplish Mike's objective.
Q:
Fiona owed Lutz $5,000. As the result of an unrelated transaction, Lutz owed Bing that same amount. The three parties signed an agreement that Fiona would pay Bing instead of Lutz and Lutz would be discharged from all liability. The agreement among the parties is:
A. unenforceable for lack of consideration.
B. voidable at Bing's option.
C. an accord and satisfaction.
D. a novation.
Q:
What Uniform Commercial Code (UCC) section indicates that it is presumed that an assignment includes a delegation under contract law?
A. 2-210
B. 1-104
C. 7-344
D. 2-114
Q:
What is the term for "performs the duty under a proper delegation"?
A. Obligor
B. Obligee
C. Delegator
D. Delegatee
Q:
A contract may be enforced by a third-party beneficiary if that beneficiary:
A. is an incidental beneficiary.
B. is a witness to the contract.
C. is the intended beneficiary.
D. has given some consideration.
Q:
Selena delegates her rights under a contract. The clause delegating her rights are termed: "All my rights under the contract are hereby effectively delegated to...." This language shows that the contract is of:
A. delegation only.
B. assignment only.
C. assignment and delegation.
D. a third-party beneficiary.
Q:
On August 1, Neptune Fisheries contracted in writing with West Markets to deliver to West 3,000 pounds of lobsters at $4 a pound. Delivery of the lobsters was due October 1 with payment due November 1. On August 4, Neptune entered into a contract with Deep Sea Lobster Farms which provided as follows: "Neptune Fisheries assigns all the rights under the contract with West Markets dated August 1 to Deep Sea Lobster Farms." The best interpretation of the August 4 contract would be that it was:
A. only an assignment of rights by Neptune.
B. only a delegation of duties by Neptune.
C. an assignment of rights and a delegation of duties by Neptune.
D. an unenforceable third-party beneficiary contract.
Q:
Which of the following is a type of substituted contract in which the obligee agrees to discharge the original obligor and to substitute a new obligor in his/her place?
A. Assignment
B. Delegation
C. Certification
D. Novation
Q:
Ted Nix purchased two acres of land from Sally Pine. Nix paid 15 percent at the closing and gave his note for the balance secured by a 30-year mortgage. Five years later, Nix found it increasingly difficult to make payments on the note and finally defaulted. Pine threatened to accelerate the loan and foreclose if Nix continued in default. Pine told Nix either to get the money or obtain an acceptable third party to assume the obligation. Nix offered the land to Quick Co. for $4,000 less than the equity Nix had in the property. This was acceptable to Pine and at the closing, Quick paid the arrearage, executed a new mortgage and note, and had title transferred to its name. Pine surrendered Nix's note and mortgage to him. The transaction in question is a(n):
A. third-party beneficiary contract.
B. novation.
C. purchase of land subject to a mortgage.
D. assignment and delegation.
Q:
In a novation:
A. the original obligor is completely discharged from his/her obligations under the contract.
B. the original obligee is completely discharged from his/her obligations under the contract.
C. the original obligor remains secondarily obligated.
D. both the original obligee and the original obligor remain obligated.
Q:
Which of the following is true of delegation?
A. It requires special, formal language.
B. It covers all duties stated in a contract.
C. It is often confused with assignment.
D. It automatically places all legal responsibilities on the delegatee.
Q:
In an assignment/delegation, which party remains secondarily liable on the obligation that has been delegated?
A. Assignor/delegator
B. Assignee/delegatee
C. Third party
D. Obligee
Q:
Al hires Bob to move his furniture to his new house. On the day of the move, Bob does not feel like moving furniture, so he asks his friend Chuck to move the furniture. Chuck decides to leave before completing the move in order to watch a football game on TV. Al has to delay his move and hire another mover at a higher price. Al wants to sue Bob to recover for his damages. Given these facts, Al will most likely:
A. lose, because it was Chuck, not Bob, who failed to fulfill his duty to Al.
B. win, because Bob's duty to Al was not delegable.
C. win, because Bob is liable to Al.
D. lose, because he failed to insist on Bob's performance.
Q:
Edna is a leading brain surgeon in the United States. She enters into a contract to perform a complicated brain surgery on Ben. However, since Edna is very busy, she wants to assign this contract to a less experienced surgeon, Charles. This would be Charles's first operation of this type. Ben can object to this assignment and prevent it because the contract between Ben and Edna is a(n):
A. contract for services to be performed in the future.
B. contract involving personal skill.
C. services contract.
D. employment contract.
Q:
Apple assigns the same contract rights to Enzo, and then to Sam. Sam immediately notifies the obligor of the assignment to him; Enzo never notifies the obligor. When Sam notified the obligor, he did not know about the earlier assignment to Enzo. Sam will have the better right under the:
A. "American rule."
B. "English rule."
C. Restatement (Second) of Contracts.
D. common law.
Q:
Mr. Blue is in a contract with Mr. Brown for the repair of Mr. Blue's roof for $9,000. Mr. Blue tells Mr. Brown that Ms. White will pay him the $9,000 for the work performed. Ms. White's role in the contract is called what?
A. Delegation
B. Assignment
C. Incorporation
D. Organizing
Q:
Mr. Blue is in a contract with Mr. Brown for the repair of Mr. Blue's roof for $9,000. Mr. Brown has already performed the work, but contacts Mr. Blue that he should pay his cousin Joe Jr. the amount owed. Joe Jr.'s status under the contract is called what?
A. Delegation
B. Assignment
C. Incorporation
D. Organizing
Q:
The effect of a valid delegation of duties is that it:
A. discharges the delegator from any further liability.
B. is an automatic novation.
C. discharges the obligee from any further liability.
D. appoints the delegatee to perform the delegator's duty to the obligee.
Q:
It is important to promptly notify the obligor that an assignment has occurred. Why?
A. It is a necessary requirement for a valid assignment.
B. The obligor might perform to the assignor rather than the assignee.
C. The obligor's duty to perform is completely discharged.
D. If the obligor neither knew nor had reason to know about the assignment, the obligor remains liable to the assignee.
Q:
Jim's contract with Frank obligated Jim to pay Frank $10,000. Frank properly assigns the contract to Abel. At that time, Abel notifies Jim about the assignment. Jim, however, forgets and pays the $10,000 to Frank. By this time, Abel is screaming for his money. However, by then, Frank goes into bankruptcy. In this case:
A. Jim is liable to Abel for $10,000.
B. Abel is out of luck because Jim performed his obligation by paying Frank.
C. Jim is liable to Abel not for the $10,000, but for his breach of the implied warranty that the assignor is solvent.
D. Abel is out of luck because his notification was oral rather than written.
Q:
Quick Corp. has $270,000 of outstanding accounts receivable. On March 10, 1988, Quick assigned a $30,000 account receivable due from Pine, one of Quick's customers, to Taft Bank for value. On March 30, Pine paid Quick the $30,000. On April 5, Taft notified Pine of the March 10 assignment from Quick to Taft. Who is Taft entitled to collect the $30,000 from?
A. Either Quick Corp. or Pine
B. Quick Corp. only
C. Pine only
D. Taft Bank cannot claim any money because it notified Quick Corp. too late
Q:
On May 2, Kurtz Co. assigned its entire interest in a $70,000 account receivable due in 60 days from Long to City Bank for $65,000. On May 4, City notified Long of the assignment. On May 7, Long informed City that Kurtz had committed fraud in the transaction out of which the account receivable arose and that payment would not be made to City. If City commences an action against Long, and Long is able to prove that Kurtz acted fraudulently:
A. Long will be able to successfully assert fraud as a defense.
B. City will be entitled to collect $65,000, the amount paid for the assignment.
C. City will be entitled to collect $70,000 since fraud in the inducement is a personal defense which was lost on May 2.
D. City will be entitled to collect $70,000 since Long's allegation of fraud arose after notice of the assignment.
Q:
Which of the following is NOT one of the implied warranties that the assignor gives to the assignee?
A. That the obligor has capacity to contract.
B. That the contract is not voidable for any reason known to the assignor.
C. That the assignor has good title to the rights assigned.
D. That the obligor is solvent.
Q:
Which of the following characterizes assignability?
A. An assignment is ineffective if it occurs in the present.
B. Assignment is ineffective in the case of land rights.
C. Assignment is ineffective when contrary to public policy.
D. Assignment is mostly effective in the case of wage earners.
Q:
Antiassignment clauses in contracts generally are:
A. enforceable but read narrowly.
B. enforceable but not covered by the UCC.
C. unenforceable because they are unconscionable.
D. unenforceable because they are void.
Q:
Once an assignment occurs, the assignee acquires:
A. greater obligations to fulfill the contract.
B. greater rights than the assignor.
C. same rights as the assignor had prior to assignment.
D. no rights at all.
Q:
Melanie owes $250 to Jessica. Jessica gifts the right to receive the money from Melanie to her daughter Kelly in writing. This assignment is:
A. unenforceable since a beneficiary modification is prohibited.
B. enforceable despite the lack of consideration.
C. unenforceable because contractual rights cannot be assigned.
D. enforceable because the gift is made in writing.
Q:
A valid assignment always requires:
A. consideration.
B. writing.
C. filing with a local court.
D. an intention to assign.
Q:
An obligor:
A. owes a duty to perform under a contract.
B. is owed a duty.
C. is one to whom a right has been transferred.
D. facilitates a contract.
Q:
With regard to an assignment, the person to whom the right has been transferred is called the:
A. obligor.
B. obligee.
C. assignor.
D. assignee.
Q:
Which of the following transfers will generally be valid without the consent of the other parties?
A. The assignment by the lessee of a lease contract where rent is a percentage of sales.
B. The assignment by a purchaser of goods of the right to buy on credit without giving security.
C. The assignment by an architect of a contract to design a building.
D. The assignment by a patent holder of the right to receive royalties.
Q:
Which of the following is true of assignments?
A. Early common law recognized assignments.
B. Contract rights have always been considered transferable.
C. Article 2 of the UCC deals with assignments of rights.
D. The laws regarding assignment have gradually become stricter.
Q:
Josh acquires beneficiary rights under a contract between Sunny and James. Any modification to that contract which discharges Josh of his rights under the contract will not be enforceable by the court.
Q:
The term for an individual outside of a contract but who is envisioned to be benefited by a contract is a third-party beneficiary.
Q:
The transfer of a right under a contract is called a(n):
A. assignment.
B. delegation.
C. affidavit.
D. bilateral contract.
Q:
The appointment of another person to perform a duty under a contract is called a(n):
A. assignment.
B. delegation.
C. affidavit.
D. bilateral contract.
Q:
An incidental beneficiary of a contract cannot recover under that contract.
Q:
Deborah owes a debt to Casey. Sean contracts with Deborah to pay her debt to Casey. Casey is a creditor beneficiary of the contract between Sean and Deborah.
Q:
A donee beneficiary of a contract can recover under that contract.
Q:
Once a party properly delegates a duty to the delegatee, that party is relieved of any obligation to perform the duty.
Q:
A delegator can be discharged from his/her obligation to perform his/her duty to the original promisee by a contract of novation.
Q:
Unless specific language indicates otherwise then an assignment of a right will be interpreted to include a delegation of duty under a contract.
Q:
The power to delegate under a contract is universal right and parties may not restrict the power to delegate in the contract.
Q:
The person who receives a right under a contract has obtained a delegation.
Q:
An assignee can notify the obligor of the assignment at any point of time that he/she desires.
Q:
Under the "American rule" governing successive assignments, the first assignee in time has the superior right.
Q:
The assignor impliedly warrants to the assignee that the obligor has capacity to contract.
Q:
The transfer of a right under a contract is called assignment.
Q:
All contract rights are assignable.
Q:
Most states have passed statutes prohibiting or regulating a wage earner's assignment of future wages.
Q:
Anne induces Ben's consent to contract under duress. Anne later assigns her rights under the contract to Carl. Ben may assert the doctrine of duress against Anne as a ground for avoiding the contract.
Q:
Antiassignment clauses in contracts are not enforceable.
Q:
Rick tells Dan that Sue will inherit a mansion if she pays him back an old debt. Since Sue is unable to pay the debt, Dan offers to pay it provided that he gets the mansion from Rick. The agreement between Dan and Rick need not be in writing under the:
A. collateral contract rule.
B. parol evidence rule.
C. leading object rule.
D. part performance rule.
Q:
When the consideration given in exchange for the collateral promise is something the guarantor seeks primarily for his own benefit rather than for the benefit of the primary debtor, the contract:
A. is the opposite of an original contract.
B. is considered void.
C. is outside the statute of frauds.
D. needs to be in writing.
Q:
Mr. Green has a month to month lease for an apartment owned by Mr. Blue. The lease between Mr. Green and Mr. Blue is oral. How will the court handle the lease?
A. The court will recognize and enforce the lease.
B. The court due to the statute of frauds will not recognize or enforce the lease.
C. The court will not recognize the lease unless there is a subtenant.
D. The court will only recognize the lease if requested by the Secretary of State.
Q:
The sources of assignment law today are the common law of contracts and provisions of the UCC.
Q:
In order for an assignment to be valid, the assignee must give some consideration to the assignor.
Q:
The statute of frauds requires that:
A. some contracts be evidenced by a writing.
B. all contracts involving fraud must be void.
C. all three-party contracts be collateral ones.
D. there can be no secondary debts in a contract.
Q:
The statute of frauds was created in 1677 in what country?
A. United States of America
B. Germany
C. England
D. Russia
Q:
Under the _____, no writing is required where the guarantor makes a collateral promise for the main purpose of obtaining some personal economic advantage.
A. parol evidence rule
B. leading object rule
C. collateral contract rule
D. part performance rule
Q:
The term Parol Evidence means that outside conversations cannot be used to add or modify a completely integrated contract.
Q:
Which of the following is covered by the statute of frauds?
A. A real estate mortgage
B. A $300 contract for the sale of pencils
C. A contract that can be performed within a week
D. A $100 VCR repair
Q:
The parol evidence rule blocks evidence of subsequent agreements that modify a completely integrated written contract.
FALSE
The parol evidence rule does not forbid parties from introducing proof of subsequent agreements. This is true even if the terms of the later agreement cancel, subtract from, or add to the obligations stated in the written contract.
Q:
In general, ambiguities in a written agreement are resolved against the party who drafted the agreement.
Q:
If the parties make an agreement that is partly printed and partly handwritten, the handwritten provisions prevail over the printed provisions in case of a conflict between them.
Q:
According to the general rules of interpretation of contracts, ordinary words are given their general meanings and the technical ones are given their technical meaning.
Q:
Some courts allow promissory estoppel to bind parties to oral contracts that otherwise would be unenforceable under the statute of frauds.
Q:
Mr. Green signs a memorandum of understanding with Mr. Blue to by his widgets. Mr. Green signs the last page of the memorandum by writing his initials in cursive. A court will enforce the agreement between Mr. Green and Mr. Blue.
Q:
Article 2 of the UCC has no parol evidence rule.
Q:
Parol evidence can be used to contradict the terms of a partially integrated contract.
Q:
Parol evidence can be used to resolve ambiguities in a completely integrated written contract.
Q:
Mr. Yellow agreed to pay the debt created by Mr. Blue in his contract to Mr. Green. This agreement is called a collateral contract.
Q:
An administrator makes an oral promise to pay the debts of the deceased. The debts amount to $60,000. This oral promise is enforceable.
Q:
A mortgage does not have to be written.
Q:
In order to satisfy the writing requirement of the statute of frauds, both parties must provide the entire agreement in writing.
Q:
An oral contract within the UCC statute of frauds can be enforced without a writing only if it involves the sale of specially manufactured goods.
Q:
The statute of frauds applies exclusively to executory contracts.
Q:
The statute of frauds does not cover contracts in which marriage is the consideration.