Question 1

The unconditional assignment of rights under a contract extinguishes any defenses that the obligor had against the assignor.

Accepted Answer

A) True 
 B)False

Question 2

Steel Mill Inc. and Transport Delivery LLC enter into a contract. UniOil Corporation will indirectly benefit from the deal. Under the principle of privity, UniOil has the right to

Accepted Answer

A)  sue Steel Mill for breach.
B)  require Transport to perform.
C)  none of the choices.
D)  demand performance from both original parties.E) B) and C)
F) All of the above

Question 3

In a state in which a statute prohibits an employee from assigning the right to receive workers' compensation benefits, the employee can assign the right

Accepted Answer

A)  if all interested parties consent.
B)  if the employee is fully advised of his or her rights.
C)  if there is no significant change to the obligor's risk or duties.
D)  under no circumstances.E) None of the above
F) C) and D)

Question 4

If a statute expressly prohibits assignment, the particular right in question cannot be assigned.

Accepted Answer

A) True 
 B)False

Question 5

Privity of contract establishes the basic principle that contracting parties have a right to privacy in the information expressed in their contracts.

Accepted Answer

A) True 
 B)False

Question 6

An accountant can delegate his or her contractual duty to another accountant, even if the contract expressly prohibits it, because accounting is a delegable skill.

Accepted Answer

A) True 
 B)False

Question 7

Generally, the duties under a contract can be delegated

Accepted Answer

A)  unless the contract expressly prohibits delegation.
B)  unless the delegation involves only a payment of money on the deal.
C)  unless the rights under the contract have previously been assigned.
D)  under no circumstances.E) B) and C)
F) B) and D)

Question 8

In a contract for a sale of goods, the right to receive payment on an account may be assigned unless the sales contract prohibits such an assignment.

Accepted Answer

A) True 
 B)False

Question 9

A transfer of contract rights to a third party is an incidental benefit .

Accepted Answer

A) True 
 B)False

Question 10

A bank's sale of its right to receive payment on a loan to a third party is a transfer but not an assignment.

Accepted Answer

A) True 
 B)False

Question 11

Jim and Kiel agree that Jim will fix the refrigeration unit in Kiel's Food Truck in exchange for payment of a debt that Jim owes to Lenders Bank. Under this contract, the intended beneficiary is

Accepted Answer

A)  Kiel's Food Truck.
B)  Lenders Bank.
C)  Jim.
D)  any customer, client, or employee of Kiel's Food Truck or Lenders Bank.E) C) and D)
F) A) and C)

Question 12

Laminate LLC agrees to buy factory equipment from Metalwork Company on the seller's misrepresentation that it meets certain specifications. Metalwork assigns the right to payment on the deal to Nations Credit Corporation. When the buyer discovers the fraud, the firm returns the equipment and cancels their contract. Laminate

Accepted Answer

A)  must pay the entire contract price to Nations Credit.
B)  need not pay any of the contract price to Nations Credit.
C)  must reimburse Nations Credit for costs with respect to the assignment.
D)  must pay a prorated amount of the contract price to Nations Credit.E) None of the above
F) B) and C)

Question 13

Leo contracts to install watering troughs in Ken's dairy barn. When Leo becomes seriously ill, he contracts with Jay to do the work. Jay is unreliable and never shows up. Ken hires Ike to do the installation. To recover for any loss on the deal, Ken can sue

Accepted Answer

A)  no one.
B)  Jay or Ike.
C)  Leo only.
D)  Jay or Leo.E) C) and D)
F) A) and C)

Question 14

Beau borrows $15,000 from Credit Center to buy a car. The lender assigns the right to receive the loan payments to Debt Collections Inc. If Beau does not pay the debt, the assignee can

Accepted Answer

A)  extinguish the contract rights of the assignor.
B)  demand performance of the deal from any of the original parties.
C)  enforce the payment in court.
D)  none of the choices.E) C) and D)
F) A) and C)

Question 15

For a price, Recycle LLC agrees to empty the dumpster behind Sushi Café. Recycle delegates this duty to Trash Inc. Sushi is

Accepted Answer

A)  the obligor.
B)  a third party beneficiary.
C)  the obligee.
D)  the delegatee.E) A) and B)
F) B) and C)

Question 16

When the original parties to a contract agree that its performance should directly benefit a third party, that party can sue the promisor directly for breach.

Accepted Answer

A) True 
 B)False

Question 17

To create a valid delegation of duties requires

Accepted Answer

A)  a special form.
B)  the delegator's expressed intent to make the delegation.
C)  the delegator's use of the word delegate .
D)  none of the choices.E) C) and D)
F) B) and D)

Question 18

Molly is a third party beneficiary under a contract between Ned and Otis. Ned and Otis can modify or rescind their contract to take away Moly's rights under the contract without her consent

Accepted Answer

A)  at any time.
B)  at no time.
C)  after Molly's rights have vested.
D)  before Molly's rights have vested.E) All of the above
F) A) and D)

Question 19

As a general rule, any duty can be delegated.

Accepted Answer

A) True 
 B)False

Question 20

Until the obligor has notice of assignment, the obligor can discharge his or her obligation by performance to any party.

Accepted Answer

A) True 
 B)False

Exam 17: Third Party Rights

If a statute expressly prohibits assignment, the particular right in question cannot be assigned.

Correct Answer
verified

A bank's sale of its right to receive payment on a loan to a third party is a transfer but not an assignment.

Correct Answer
verified

When the original parties to a contract agree that its performance should directly benefit a third party, that party can sue the promisor directly for breach.

Correct Answer
verified

Correct Answer
verified

In a contract for a sale of goods, the right to receive payment on an account may be assigned unless the sales contract prohibits such an assignment.

Correct Answer
verified

Generally, the duties under a contract can be delegated

Correct Answer
verified

For a price, Recycle LLC agrees to empty the dumpster behind Sushi Café. Recycle delegates this duty to Trash Inc. Sushi is

Correct Answer
verified

As a general rule, any duty can be delegated.

Correct Answer
verified

A transfer of contract rights to a third party is an incidental benefit .

Correct Answer
verified

Beau borrows $15,000 from Credit Center to buy a car. The lender assigns the right to receive the loan payments to Debt Collections Inc. If Beau does not pay the debt, the assignee can

Correct Answer
verified

To create a valid delegation of duties requires

Correct Answer
verified

Privity of contract establishes the basic principle that contracting parties have a right to privacy in the information expressed in their contracts.

Correct Answer
verified

In a state in which a statute prohibits an employee from assigning the right to receive workers' compensation benefits, the employee can assign the right

Correct Answer
verified

The unconditional assignment of rights under a contract extinguishes any defenses that the obligor had against the assignor.

Correct Answer
verified

Leo contracts to install watering troughs in Ken's dairy barn. When Leo becomes seriously ill, he contracts with Jay to do the work. Jay is unreliable and never shows up. Ken hires Ike to do the installation. To recover for any loss on the deal, Ken can sue

Correct Answer
verified

An accountant can delegate his or her contractual duty to another accountant, even if the contract expressly prohibits it, because accounting is a delegable skill.

Correct Answer
verified

Jim and Kiel agree that Jim will fix the refrigeration unit in Kiel's Food Truck in exchange for payment of a debt that Jim owes to Lenders Bank. Under this contract, the intended beneficiary is

Correct Answer
verified

Until the obligor has notice of assignment, the obligor can discharge his or her obligation by performance to any party.

Correct Answer
verified

Molly is a third party beneficiary under a contract between Ned and Otis. Ned and Otis can modify or rescind their contract to take away Moly's rights under the contract without her consent

Correct Answer
verified

Steel Mill Inc. and Transport Delivery LLC enter into a contract. UniOil Corporation will indirectly benefit from the deal. Under the principle of privity, UniOil has the right to

Correct Answer
verified

Exam 17: Third Party Rights

If a statute expressly prohibits assignment, the particular right in question cannot be assigned.

Correct AnswerverifiedShow Answer

A bank's sale of its right to receive payment on a loan to a third party is a transfer but not an assignment.

Correct AnswerverifiedShow Answer

When the original parties to a contract agree that its performance should directly benefit a third party, that party can sue the promisor directly for breach.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In a contract for a sale of goods, the right to receive payment on an account may be assigned unless the sales contract prohibits such an assignment.

Correct AnswerverifiedShow Answer

Generally, the duties under a contract can be delegated

Correct AnswerverifiedShow Answer

For a price, Recycle LLC agrees to empty the dumpster behind Sushi Café. Recycle delegates this duty to Trash Inc. Sushi is

Correct AnswerverifiedShow Answer

As a general rule, any duty can be delegated.

Correct AnswerverifiedShow Answer

A transfer of contract rights to a third party is an incidental benefit .

Correct AnswerverifiedShow Answer

Beau borrows $15,000 from Credit Center to buy a car. The lender assigns the right to receive the loan payments to Debt Collections Inc. If Beau does not pay the debt, the assignee can

Correct AnswerverifiedShow Answer

To create a valid delegation of duties requires

Correct AnswerverifiedShow Answer

Privity of contract establishes the basic principle that contracting parties have a right to privacy in the information expressed in their contracts.

Correct AnswerverifiedShow Answer

In a state in which a statute prohibits an employee from assigning the right to receive workers' compensation benefits, the employee can assign the right

Correct AnswerverifiedShow Answer

The unconditional assignment of rights under a contract extinguishes any defenses that the obligor had against the assignor.

Correct AnswerverifiedShow Answer

Leo contracts to install watering troughs in Ken's dairy barn. When Leo becomes seriously ill, he contracts with Jay to do the work. Jay is unreliable and never shows up. Ken hires Ike to do the installation. To recover for any loss on the deal, Ken can sue

Correct AnswerverifiedShow Answer

An accountant can delegate his or her contractual duty to another accountant, even if the contract expressly prohibits it, because accounting is a delegable skill.

Correct AnswerverifiedShow Answer

Jim and Kiel agree that Jim will fix the refrigeration unit in Kiel's Food Truck in exchange for payment of a debt that Jim owes to Lenders Bank. Under this contract, the intended beneficiary is

Correct AnswerverifiedShow Answer

Until the obligor has notice of assignment, the obligor can discharge his or her obligation by performance to any party.

Correct AnswerverifiedShow Answer

Molly is a third party beneficiary under a contract between Ned and Otis. Ned and Otis can modify or rescind their contract to take away Moly's rights under the contract without her consent

Correct AnswerverifiedShow Answer

Steel Mill Inc. and Transport Delivery LLC enter into a contract. UniOil Corporation will indirectly benefit from the deal. Under the principle of privity, UniOil has the right to

Correct AnswerverifiedShow Answer

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