Deck 12: Third Parties and Contracts

Question 1

Express words must be used to show that a several contract is intended.

Answer 1

True

Question 2

A person not party to contract but whom parties intended to benefit is known as a(n) _____.

A) unintentional beneficiary
B) incidental beneficiary
C) third-party beneficiary
D) second-party beneficiary

Answer 2

C

Question 3

At common law, individuals other than the parties to a contract can sue upon or seek to enforce the contract.

Answer 3

False

Question 4

In the event of bankruptcy, the law assigns the rights and duties of the debtor to the trustee in bankruptcy.

Question 5

Which of the following statements best describes a several contract?

A) It is a contract entitling two individuals together for performance.
B) It is a contract where two or more people individually agree to perform an obligation.
C) It is a contract in which express words cannot be used to show that the contract is intended.
D) It is a contract in which individual agreements are contained in separate documents.

Question 6

An incidental beneficiary is best described as a person:

A) whom parties intended to benefit.
B) who is a third-party beneficiary and for whom performance is a gift.
C) to whom the promisee owes an obligation or duty.
D) who unintentionally benefits from performance of contract.

Question 7

A novation does not need to be in writing and can be implied from the parties' actions.

Question 8

The term delegation describes a transfer of rights.

Question 9

Allen was hired by Jake to paint his house. However, Allen could not complete the task and hired Jim to step in for him. The original contract between Allen and Jake still remained the same. In this scenario, Allen is engaged in _____.

A) novation
B) delegation
C) assignment
D) rescission

Question 10

A joint contract is one in which:

A) not more than two parties can be involved.
B) parties promise to do their individual part of the performance.
C) parties are not collectively entitled to the performance of another party.
D) each obligor is bound for the performance of the entire obligation.

Question 11

Blake agreed to renovate Jane's house, and they drafted a written contract. However, Blake was unable to complete the renovation due to an accident. Blake's friend, Tom, agreed to complete the job, and Jane agreed to release Blake from the contract. The terms of the old contract remained the same. This process of substitution of a contract is known as a(n) _____.

A) rescission
B) novation
C) option
D) counteroffer

Question 12

Explain novation.

Question 13

A contract can never be described as being both joint and several.

Question 14

As a general rule, one's rights under a contract cannot be transferred freely.

Question 15

Which of the following statements best describes the term "assignment"?

A) It is the conveyance of rights in a contract to a person who is not a party.
B) It is the termination and replacement of an old contract.
C) It is the transfer of duties alone without a transfer of rights.
D) It consists of an assignee who is the party making the assignment.

Question 16

Only when performance is standardized, may one delegate its performance to another.

Question 17

Which of the following warranties does an assignor make when he assigns rights under a contract to an assignee for value?

A) That the assignee is the true owner of the right
B) That the right is invalid at the time the assignment is made
C) That there are no defenses available to the debtor that have not been disclosed to the assignee
D) That if the assignor commits a breach of warranty, the assignee cannot seek to recover any loss from the assignor

Question 18

A creditor beneficiary is one to whom the promisee owes no duty but for whom performance is a gift.

Question 19

In a joint contract, if a promise is not carried out, the aggrieved party may not sue just one party but both parties.