Question 1

Andrew Durham was injured in a job-related accident that resulted in a workers' compensation settlement agreement with the employer's insurance carrier,Traveler's Indemnity Company.The settlement agreement required Traveler's to pay Durham $2,500 per month for the rest of his life.To finance its obligation,Traveler's purchased an annuity in its name.The settlement agreement required Traveler's approval or written consent prior to an assignment of the annuity payments.Durham later decided to open a business and went to a credit union for a $214,000 loan.The credit union loaned the money,taking a security interest in Durham's monthly annuity payments.Traveler's consent was never secured.Discuss the conditions in which a right may not be assigned and assess if this was a valid assignment.

Accepted Answer

Assignments can be made unless: (a)the a...

Question 2

A rock group assigns its payment under a performance contract to the Costume Shop,a business that has supplied the group with outrageous stage outfits,and to which the group owes a great sum of money.This is a(n)

Accepted Answer

A)  valid assignment because of the rule of freedom to contract.
B)  valid assignment because this is a simple transfer of the right to receive money.
C)  invalid assignment because it increases the burden of the payor.
D)  invalid assignment because this is a personal service contract.

Question 3

A party may make either an assignment or a delegation,but cannot make both an assignment and a delegation simultaneously.

Accepted Answer

A) True 
 B)False

Question 4

A third party beneficiary's status occurs

Accepted Answer

A)  after an assignment and delegation.
B)  when the third party is informed of the contract.
C)  when the third party beneficiary agrees to the contract terms.
D)  when the contract is created.

Question 5

Most types of duties may be delegated.

Accepted Answer

A) True 
 B)False

Question 6

Linda assigns to Ben a right to receive rent payments.In terms of Linda's warranty as the assignor,the law implies which of the following?

Accepted Answer

A)  that the tenant is solvent
B)  that Linda actually has a right to the rental payments
C)  that the tenant will actually pay
D)  No warranties are implied by law in an assignment.

Question 7

A rock group assigns its payment under a performance contract to the Costume Shop,a business that has supplied the group with outrageous stage outfits,and to which the group owes a great sum of money.Under this arrangement the rock group is the

Accepted Answer

A)  assignor.
B)  assignee.
C)  delegator.
D)  delegatee. A

Question 8

Robert hired James,a CPA,to prepare his tax returns.James was too busy and delegated the work to Sara,also a CPA.This delegation is

Accepted Answer

A)  enforceable,as Sara is also a CPA.
B)  enforceable,as there was no expectation James would do the work.
C)  not enforceable,as Robert hired James to perform personal services.
D)  not enforceable,as this violates public policy.

Question 9

Shirley is an actress under contract with Twentieth Century.Shirley agreed to perform the lead role in a musical to be filmed in Hollywood by Twentieth Century.At the last minute,Twentieth Century decided to scrap the musical and assigned its rights in Shirley to MGM.MGM was planning to film a western in Australia requiring Shirley to spend six months filming in Australia.Can Shirley successfully prevent this assignment?

Accepted Answer

Yes.This assignment of rights would subs...

Question 10

When is an assignment valid and enforceable against an obligor?

Accepted Answer

A)  from the moment the assignment is made
B)  from the moment the obligor signs the contract
C)  from the moment the assignee gives consideration
D)  from the moment the obligor is notified of the assignment

Question 11

Which statement most accurately describes third party beneficiary rights?

Accepted Answer

A)  A beneficiary may enforce a contract if the parties intended to benefit him and if enforcing the promise will satisfy a duty of the promisee to the beneficiary.
B)  If a promisee intended to make a gift to the beneficiary,the beneficiary may not enforce the contract.
C)  An intended third party beneficiary has no enforceable rights in a contract.
D)  Incidental beneficiaries have enforceable rights against both contracting parties.

Question 12

Meyer's Grocery signed a contract to build a store in Richmond,Kentucky.Soon afterward,Meyer's breached the contract.Which of the following can sue Meyer's to enforce the contract?

Accepted Answer

A)  a local home improvement store that hoped to sell building materials to the construction crew
B)  neighborhood residents who were looking forward to shopping at Meyer's
C)  the operator of a food truck,who intended to sell lunch to the construction crew
D)  None of these are correct.

Question 13

Garth's Imports sold a car to Wally on credit for $30,000.Garth assigned to Cassandra all of his rights to receive money from Wally.Cassandra did not inform Wally of the assignment.Therefore,Wally continued to make the next three payments directly to Garth.Shortly thereafter,Garth left the country with the money.If Cassandra sues Wally for the missing three payments

Accepted Answer

A)  Cassandra will not be able to collect the money from Wally.
B)  Wally is not liable for the three payments because an assignment is not valid unless the obligor is notified.
C)  Wally is liable for the three payments because Cassandra paid consideration for the assignment rights.
D)  Wally cannot raise the defense of previous payment.

Question 14

If Ray agrees to rake leaves for Michelle in exchange for Michelle's promise to pay off the debt Ray owes to Dean,then Dean is a donee beneficiary of the agreement between Ray and Michelle.

Accepted Answer

A) True 
 B)False

Question 15

Lawrence took out a life insurance policy in which his daughter,Madeline,is named as a beneficiary.Madeline is

Accepted Answer

A)  a promisor.
B)  an obligor.
C)  an intentional beneficiary.
D)  an incidental beneficiary.

Question 16

The status of a third party is determined by

Accepted Answer

A)  the type of contract.
B)  whether the third party gave consideration.
C)  the reasonable expectations of the third party.
D)  the intent of the contracting parties.

Question 17

If Valley Bridge contracts with Rainbow Painters to paint a bridge and the contract requires that only Sherwin Williams paint be used,then Sherwin Williams,as third party beneficiary,will be able to enforce the contract against either Valley Bridge or Rainbow Painters.

Accepted Answer

A) True 
 B)False

Question 18

If Velma,as a birthday present,assigns to Jim her contractual right to collect $50 from Wood Co. ,this would be a gratuitous assignment.

Accepted Answer

A) True 
 B)False

Question 19

Martina hired Alexander to renovate her home and specifies that Alexander use Spiffy Painting for all the painting because of Spiffy's excellent reputation.In this case,Spiffy is a(n)

Accepted Answer

A)  creditor beneficiary.
B)  incidental beneficiary.
C)  intended beneficiary.
D)  debtor beneficiary. B

Question 20

Contract prohibitions against assignments are invalid as a matter of public policy.

Accepted Answer

A) True 
 B)False  False

Exam 17: Third Parties

Correct Answer
verified
Assignments can be made unless: (a)the a...
View Answer

A rock group assigns its payment under a performance contract to the Costume Shop,a business that has supplied the group with outrageous stage outfits,and to which the group owes a great sum of money.This is a(n)

Correct Answer
verified

A party may make either an assignment or a delegation,but cannot make both an assignment and a delegation simultaneously.

Correct Answer
verified

A third party beneficiary's status occurs

Correct Answer
verified

Most types of duties may be delegated.

Correct Answer
verified

Linda assigns to Ben a right to receive rent payments.In terms of Linda's warranty as the assignor,the law implies which of the following?

Correct Answer
verified

A rock group assigns its payment under a performance contract to the Costume Shop,a business that has supplied the group with outrageous stage outfits,and to which the group owes a great sum of money.Under this arrangement the rock group is the

Correct Answer
verified
A

Robert hired James,a CPA,to prepare his tax returns.James was too busy and delegated the work to Sara,also a CPA.This delegation is

Correct Answer
verified

Correct Answer
verified
Yes.This assignment of rights would subs...
View Answer

When is an assignment valid and enforceable against an obligor?

Correct Answer
verified

Which statement most accurately describes third party beneficiary rights?

Correct Answer
verified

Meyer's Grocery signed a contract to build a store in Richmond,Kentucky.Soon afterward,Meyer's breached the contract.Which of the following can sue Meyer's to enforce the contract?

Correct Answer
verified

Correct Answer
verified

If Ray agrees to rake leaves for Michelle in exchange for Michelle's promise to pay off the debt Ray owes to Dean,then Dean is a donee beneficiary of the agreement between Ray and Michelle.

Correct Answer
verified

Lawrence took out a life insurance policy in which his daughter,Madeline,is named as a beneficiary.Madeline is

Correct Answer
verified

The status of a third party is determined by

Correct Answer
verified

If Valley Bridge contracts with Rainbow Painters to paint a bridge and the contract requires that only Sherwin Williams paint be used,then Sherwin Williams,as third party beneficiary,will be able to enforce the contract against either Valley Bridge or Rainbow Painters.

Correct Answer
verified

If Velma,as a birthday present,assigns to Jim her contractual right to collect $50 from Wood Co. ,this would be a gratuitous assignment.

Correct Answer
verified

Martina hired Alexander to renovate her home and specifies that Alexander use Spiffy Painting for all the painting because of Spiffy's excellent reputation.In this case,Spiffy is a(n)

Correct Answer
verified
B

Contract prohibitions against assignments are invalid as a matter of public policy.

Correct Answer
verified
False

Exam 17: Third Parties

Correct AnswerverifiedAssignments can be made unless: (a)the a...View AnswerShow Answer

A rock group assigns its payment under a performance contract to the Costume Shop,a business that has supplied the group with outrageous stage outfits,and to which the group owes a great sum of money.This is a(n)

Correct AnswerverifiedShow Answer

A party may make either an assignment or a delegation,but cannot make both an assignment and a delegation simultaneously.

Correct AnswerverifiedShow Answer

A third party beneficiary's status occurs

Correct AnswerverifiedShow Answer

Most types of duties may be delegated.

Correct AnswerverifiedShow Answer

Linda assigns to Ben a right to receive rent payments.In terms of Linda's warranty as the assignor,the law implies which of the following?

Correct AnswerverifiedShow Answer

A rock group assigns its payment under a performance contract to the Costume Shop,a business that has supplied the group with outrageous stage outfits,and to which the group owes a great sum of money.Under this arrangement the rock group is the

Correct AnswerverifiedA

Robert hired James,a CPA,to prepare his tax returns.James was too busy and delegated the work to Sara,also a CPA.This delegation is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedYes.This assignment of rights would subs...View AnswerShow Answer

When is an assignment valid and enforceable against an obligor?

Correct AnswerverifiedShow Answer

Which statement most accurately describes third party beneficiary rights?

Correct AnswerverifiedShow Answer

Meyer's Grocery signed a contract to build a store in Richmond,Kentucky.Soon afterward,Meyer's breached the contract.Which of the following can sue Meyer's to enforce the contract?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If Ray agrees to rake leaves for Michelle in exchange for Michelle's promise to pay off the debt Ray owes to Dean,then Dean is a donee beneficiary of the agreement between Ray and Michelle.

Correct AnswerverifiedShow Answer

Lawrence took out a life insurance policy in which his daughter,Madeline,is named as a beneficiary.Madeline is

Correct AnswerverifiedShow Answer

The status of a third party is determined by

Correct AnswerverifiedShow Answer

If Valley Bridge contracts with Rainbow Painters to paint a bridge and the contract requires that only Sherwin Williams paint be used,then Sherwin Williams,as third party beneficiary,will be able to enforce the contract against either Valley Bridge or Rainbow Painters.

Correct AnswerverifiedShow Answer

If Velma,as a birthday present,assigns to Jim her contractual right to collect $50 from Wood Co. ,this would be a gratuitous assignment.

Correct AnswerverifiedShow Answer

Martina hired Alexander to renovate her home and specifies that Alexander use Spiffy Painting for all the painting because of Spiffy's excellent reputation.In this case,Spiffy is a(n)

Correct AnswerverifiedB

Contract prohibitions against assignments are invalid as a matter of public policy.

Correct AnswerverifiedFalse

Correct Answer
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Assignments can be made unless: (a)the a...
View Answer

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A

Correct Answer
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Yes.This assignment of rights would subs...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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B

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False