Deck 11: Third Party Rights and Discharge

Question 1

A third party beneficiary contract is formed only when the parties to a contract intend to con?fer a benefit on a third party.

Answer 1

False

Question 2

The rights of a third party bene?ficiary under a contract are subject to any express reservation of rights in the contract to the original parties.

Answer 2

True

Question 3

An unconditional assignment of rights in a contract will extinguish the rights of the as?signor.

Answer 3

True

Question 4

To be enforceable,a delegation of duties must be in writing.

Question 5

The rights of a third party beneficiary under a contract with two other parties vest when the conditions for vesting are satisfied.

Question 6

Alienation is a transfer of contract rights between citizens of different nations.

Question 7

The benefit that an incidental beneficiary receives from a contract between two other parties is unintentional.

Question 8

Any beneficiary who is not deemed an intended beneficiary is considered incidental.

Question 9

An "as?signment of all rights" absolves the assignor of all liability under the contract that created the rights.

Question 10

An event must be certain to occur to constitute a contractual condition.

Question 11

The person to whom rights in a contract are assigned is the assignee.

Question 12

Notice is not legally required to establish the validity of an assignment.

Question 13

To be enforceable,any assignment must be in writing.

Question 14

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

Question 15

An assignment of an insurance policy cannot be prohibited.

Question 16

Alienation is a transfer of the ownership of land.

Question 17

A right to receive damages on a breach of a contract for a sale of goods may be assigned.

Question 18

Oral assignments are prohibited.

Question 19

A promise to perform under a contract is never absolute.

Question 20

An assignment of a negotiable instrument is generally prohibited.

Question 21

Bret and Cory enter into a contract under which Bret agrees to sell his textbook to Cory for $60 at the end of the fall semester.Bret wants to transfer his right to payment for the book to Del.This transfer

A)is prohibited.
B)may be oral or written.
C)must be implied.
D)must be in writing.

Question 22

When a condition operates to terminate a party's absolute promise to per?for?m,it is a condition precedent.

Question 23

A contract that involves mechanical fitness is a contract in which per?formance must per?sonally satisfy the party to whom per?formance is owed.

Question 24

Fitch and Gert enter into a contract for the distribution of Fitch''s produce to local restaurants and wineries for which Fitch agrees to pay Gert.Gert transfers his right to payment under the contract to Honor Bank.This transfer is

A)a delegation.
B)an assignment.
C)an obligato.
D)prohibited.

Question 25

Musical Production Company and Nora enter into a contract that calls for Nora to write six songs for which Musical agrees to pay her.Nora transfers her right to payment under the contract to Omni Entertainment Agency.Nora is

A)a delegator.
B)an assignor.
C)a payor.
D)a righter.

Question 26

A contract will be discharged if a circumstance that the parties knew might occur make it impossible to attain the contract's purpose.

Question 27

Concurrent conditions occur only when the parties to a contract are re?quired to per?form their respective duties simultaneously.

Question 28

A party's refusal to perform his or her contractual obligations is a rescission.

Question 29

Complete performance occurs when conditions in a contract are fully satisfied.

Question 30

Riley and Sheila enter into a contract for the sale of Riley's condominium to Sheila.Sheila transfers her right to be recorded as the owner of the property to her daughter Tricia.This transfer is

A)a delegation.
B)an assignment.
C)an accord and satisfaction.
D)a negotiation.

Question 31

Performance of an accord discharges an original contractual obligation.

Question 32

Dwayne and Ewell enter into a contract for the design of an addition to Dwayne's house for which he agrees to pay Ewell.Ewell transfers his right to payment under the contract to Flex Construction Company.Flex is

A)a delegatee.
B)an assignee.
C)an obligee.
D)a prohibitee.

Question 33

Any breach allows the nonbreaching party to cancel the contract.

Question 34

Most contracts are discharged by rescission.

Question 35

When a contract party alters a written contract,the other party must adapt his or her performance accordingly.

Question 36

After a contract is made,an unforeseen event may make performance impossible and discharge the contract.

Question 37

A novation revokes and discharges a prior contract.

Question 38

Anticipatory repudiation discharges a contract.

Question 39

The most common way to discharge a contract is by breach.

Question 40

If a contract condition is not satisfied,the obligations of the contracting parties are discharged.

Question 41

Milo and Nate enter into a contract under which Nate is to wash the windows at Milo's warehouse.When Nate's schedule conflicts,he asks Ollie to perform his window-washing duties.This transfer of duties is

A)a delegation.
B)an assignment.
C)an accord and satisfaction.
D)a negotiation.

Question 42

Manny wants to transfer his right to buy $400 of pistachio nuts under a contract with Nila to Opie.To ensure that the transfer of the right is valid,Manny must

A)designate Opie as a "delegate."
B)file a notice of assignment in the public records.
C)tell Nila that he has no right and no liability under the contract.
D)none of the choices.

Question 43

Lon enters into a contract to mine limestone in Mica's quarry,sell it,and share the profits on its sale with Mica.If the duties under this contract are discharged like those under most contracts,the duties will be

A)assigned.
B)breached.
C)performed.
D)rescinded.

Question 44

Rural Development Corporation (RDC)and Sid enter into a contract for the clear-cutting of RDC's fifty-acre tract for which RDC agrees to pay Sid.Sid transfers his duty to log the tract under the contract to Timber Logging Company.Timber is

A)a delegatee.
B)an assignee.
C)an obligee.
D)a prohibitee.

Question 45

Equity Company and Faye enter into a contract for Faye to cater a meeting of Equity's shareholders.When Faye's schedule conflicts,she asks Gudren to serve Faye's coffee and pastries at the meeting.This transfer of duties is

A)a delegation.
B)an assignment.
C)an obligato.
D)prohibited.

Question 46

Protective Finishes,Inc.(PFI),agrees to paint Quinn's house,using a particular brand of "discount" paint.PFI completes the job but uses a dif?ferent brand of discounted paint.This is most likely

A)a complete excuse for Quinn's refusal to pay.
B)a material breach.
C)complete performance.
D)substantial performance.

Question 47

Lake Port Services enters into a contract to load Max's Great Lakes barges with the cargo that Max designates.Lake Port's offer to perform,when Lake Port is ready,willing,able to do so,is

A)complete.
B)substantial.
C)tender.
D)tough.

Question 48

Eton and Fiona sign a contract by which Eton agrees to deliver a washing machine on July 31 in exchange for Fiona's promise to pay the $500 pur?chase price on July 31.The delivery of the washing machine and the payment of $500 are ex?amples of

A)conditions precedent.
B)concurrent conditions.
C)conditions subsequent.
D)speculative conditions.

Question 49

Frank and Green Agri-Ship,Inc. ,enter into a contract under which Frank agrees to pay Green to transport the soybeans in Frank's bins.When Green's schedule conflicts,Green contacts Hybrid Crop Transport Company and "assigns all rights under the contract" to Hybrid.This transfer normally is construed as

A)an assignment and a delegation.
B)an assignment only.
C)a delegation only.
D)neither an assignment nor a delegation.

Question 50

Jen is a third party beneficiary under a contract between Kyla and Leo.Kyla and Leo can modify or rescind their contract without Jen's consent

A)at any time.
B)at no time.
C)only after Jen's rights have vested.
D)only before Jen's rights have vested.

Question 51

Trudy and Uri enter into a contract for the sale of Trudy's house for which Uri agrees to pay her $250,000.Uri wants to transfer his right to the ownership of the house to Val,his niece.This transfer

A)is prohibited.
B)may be oral or written.
C)must be implied.
D)must be in writing.

Question 52

Candy enters into a contract under which she agrees to pay Dino for a business survey and review of her competitors.Dino agrees to deliver the survey by July 1.Candy's offer,on July 1,to pay Dino is

A)complete.
B)substantial.
C)tender.
D)tough.

Question 53

Building Restoration,Inc.(BRI),enters into a contract to refurbish an old train depot for Casual Dining,Inc. ,which plans to open Eat Up Restaurant in that location.If BRI completes most of the work promised in the contract,its performance will be

A)absolute.
B)complete.
C)material.
D)substantial.

Question 54

Commercial Shipping,Inc. ,and Dock Services Corporation enter into a contract under which Commercial agrees to pay Dock to load Commercial's trucks.Dock transfers its duty to load the trucks to East Harbor Transport Company.Dock is

A)a delegator.
B)an assignor.
C)a payor.
D)a righter.

Question 55

Basil,a world-famous chef,signs a contract to give lessons in French cooking to Marge.Basil wants to transfer his duties under the con?tract to Harv,the operator of a hot dog concession.The transfer is

A)valid.
B)valid only if Harv is a highly regarded barbecue chef.
C)not valid because performance of the contract depends on Basil's unique skills.
D)not valid only if Marge detests barbecued foods.

Question 56

Julio contracts to provide lawn-mowing services to Kevin for $140 per month.Julio can?not transfer this duty

A)under any circumstances.
B)without continuing to be potentially liable.
C)without Kevin's consent.
D)without paying Kevin at least one monthly fee.

Question 57

Joy and Kris enter into a contract for Kris to lay sod in Joy's yard for which she agrees to pay Kris.When Kris's schedule conflicts,she contacts Leza,to whom Kris "assigns all rights under the contract." Kris is

A)absolved of any liability under the contract.
B)in breach of the contract with Joy.
C)liable to Joy if Leza does not perform.
D)liable to Leza for inducing a prohibited contract.

Question 58

Reba and Sly enter into a contract by which Reba promises to deliver newly printed marketing brochures to Sly.Reba later transfers her duty under the contract to Troy.Reba is

A)a delegator and an obligor.
B)a delegator only.
C)an obligor only.
D)none of the choices.

Question 59

Complete Rehab Corporation substantially performs its contract with Downtown Retail,Inc.Downtown is entitled to

A)damages.
B)nothing.
C)specific performance.
D)substitute performance.

Question 60

Tia signs a lease that states that any change in the zoning law that affects the lease will cause its termination.Union City's zoning board adopts a new zoning classification that affects the lease.This adoption satis?fies

A)no condition.
B)the condition precedent.
C)the concurrent condition.
D)the condition subsequent.

Question 61

Fact Pattern 11-1
Mutual Company enters into a contract to employ Neil as an investment manager for two years.During the first year,Neil is often absent without explanation and when present fails to adequately monitor and manage Mutual's investments.
Refer to Fact Pattern 11-1.With respect to Mutual's duties,Neil's performance most likely

A)discharges Mutual from the contract.
B)has no effect on Mutual's performance.
C)increases Mutual's duties under the contract.
D)suspends Mutual's duty to perform.

Question 62

Farley agrees to lease an apart?ment from Gena for one day to see Hugh,the president of the United States,deliver a speech in the street below.The speech is can?celed ten days before its date.Farley's con?tract with Gena

A)is discharged.
B)is not affected.
C)is postponed until another event is scheduled.
D)must be performed immediately.

Question 63

Roy and Sheila are parties to a contract.They subse?quently agree that Tony should take Roy's place and assume all of his rights and duties under the contract.This is

A)a novation.
B)an accord and satisfaction.
C)an assignment.
D)a modification.

Question 64

Fact Pattern 11-2
Bell Medical Education Service enters into a contract to employ Chris as an instructor for two years to begin May 1.One month before the term begins,Bell is underbid by a competitor and loses a major client,Delta Hospital Center.Bell now refuses to hire Chris.
Refer to Fact Pattern 11-2.Under the circumstances,with respect to damages,Chris can

A)bring an action immediately.
B)bring an action only after the contract's two-year term begins.
C)bring an action only after the contract's two-year term ends.
D)do nothing.

Question 65

Felipe agrees to work as Gary's personal accountant for one year but dies in the sixth month of the contract.Felipe's estate

A)is discharged from any contractual liability.
B)must find a competent accountant to fulfill the contract.
C)must pay liquidated damages.
D)must refund any money paid to Felipe on the contract.

Question 66

Fact Pattern 11-2
Bell Medical Education Service enters into a contract to employ Chris as an instructor for two years to begin May 1.One month before the term begins,Bell is underbid by a competitor and loses a major client,Delta Hospital Center.Bell now refuses to hire Chris.
Refer to Fact Pattern 11-2.Bell's repudiation is most likely

A)a material breach.
B)a minor breach.
C)Chris's breach.
D)no breach.

Question 67

Diners Restaurant signs an agreement with Eagle Bank to borrow $10,000 at 20 percent interest.Later,the state legislature passes a law lowering the maximum permissible rate of interest from 15 per?cent.Diners' best argument for avoiding payment to Eagle is that

A)performance of the contract is commercially impossible.
B)the agreement violates the mirror image rule.
C)the law has rendered performance of the contract illegal.
D)the specific subject matter of the contract has been destroyed.

Question 68

Red operates a scrap metal business and contracts to provide ten tons of scrap steel at $50 per ton to be delivered to Sabin in six months.An un?fore?seen shortage of scrap steel suddenly develops,making it impossible for Red to fulfill his contract for less than $500 per ton.Red's best de?fense against performing the contract would be

A)contract alteration.
B)impossibility of performance.
C)commercial impracticability.
D)discharge by rescission.

Question 69

Fact Pattern 11-1
Mutual Company enters into a contract to employ Neil as an investment manager for two years.During the first year,Neil is often absent without explanation and when present fails to adequately monitor and manage Mutual's investments.
Refer to Fact Pattern 11-1.Neil's performance is most likely

A)a material breach.
B)a minor breach.
C)Mutual's breach.
D)no breach.

Question 70

Elin contracts to buy six cases of vintage Fertile Valley wine from Grapes & Vines Winery for $1,200.The contract states that delivery is to be made at Elin's residence "on or before May 1,to be used for daughter's wedding reception on May 2." On May 1,Grapes & Vines's delivery van is involved in an accident,and no wine is delivered that day.On the morning of May 2,Elin buys the wine from Happy Hill Winery.That afternoon,just before the reception,Grapes & Vines tenders delivery of the wine at Elin's residence.Elin refuses tender.Grapes & Vines sues Elin for breach of contract.How is the court most likely to rule?

Question 71

Pam borrows $5,000 from Quality Auto Sales to buy a car.When Pam does not pay the loan or return the car,Quality wants to transfers the right to the payment to Rapid Collection Agency.Rapid agrees to pay Quality for this right,but for a price that is less than the amount owed.Can Quality transfer this right to Rapid without Pam's consent? If so,and Quality committed fraud in the deal with Pam,could Pam legiti?mately refuse to pay Rapid? Explain.