Question 1

beneficiary contracts involve two parties to a contract, either by words, writing, or actions, intending to bring benefits to a third party by virtue of an enforceable contract.

Accepted Answer

Beneficiary contracts are considered intended when the original parties to the contract intend to benefit a third party. This means that they have a clear intention to create legal rights for the third party and have considered the impact of the contract on that person. Incidental beneficiaries, on the other hand, are not intended beneficiaries and do not have enforceable rights under the contract. Donee and creditor refer to specific types of beneficiaries, but do not address the issue of intention in creating the contract.

Question 2

Under Uniform Commercial Code Section 2-_ , written memoranda that are intended to be a final expression of the parties' agreement cannot be contradicted by prior or contemporaneous oral agreement.

Accepted Answer

The correct answer is C because Uniform Commercial Code Section 2-202 states that written memoranda that are intended to be a final expression of the parties' agreement cannot be contradicted by prior or contemporaneous oral agreement.

Question 3

A donee beneficiary contract exists when the purpose of the promisee in obtaining a promise from the promisor is to make a gift to a third person.

Accepted Answer

A donee beneficiary contract is a type of contract where the promisor makes a promise to the promisee, and the intent of the promisee is to make a gift to a third person, known as the beneficiary. In this contract, the beneficiary has a right to enforce the contract against the promisor, even though the beneficiary is not a party to the contract.

Question 4

Randall agrees to pay a yearly premium to an insurance company that promises to give his daughter $150,000 upon his death. This is an example of a contract.

Accepted Answer

This is a donee beneficiary contract because the insurance company promises to pay a benefit to a third party (Randall's daughter) upon Randall's death.

Question 5

Which of the following assignments are recognized by law?

Accepted Answer

Assignments that involve the present transfer of an existing right are recognized by law. The other options are not recognized by law - A) materially changing the duty of the obligor can be a breach of contract, B) forbidden by state statute are illegal, and D) personal services contracts cannot be assigned without the consent of the obligee.

Question 6

In an assignment scenario, the obligee-promisee is also known as the .

Accepted Answer

The obligee-promisee is the party who is owed a duty or benefit under a contract and is the one who assigns the rights to another party, making them the assignor.

Question 7

An assignment is the present transfer of an existing right.

Accepted Answer

An assignment is the transfer of an existing right from one party to another party.

Question 8

Discuss the various exceptions to the parol evidence rule.

Accepted Answer

The answer of Discuss the various exceptions to the parol...

Question 9

A contract exists when the purpose of the promisee in requiring a promisor's performance to be made to a third person is to fulfill a legal obligation of the promisee to the third person.

Accepted Answer

This scenario describes a creditor beneficiary, where the promisee (the creditor) requires the promisor to perform to a third person (the beneficiary) in order to fulfill a legal obligation owed by the promisee to the beneficiary. The other choices (void, quasi-, and donee beneficiary) do not accurately describe this situation.

Question 10

Sarah owes Jane $10,000 under a valid contract but has been unable to pay the debt. Becky agrees to pay $10,000 to Jane in exchange for Jane's contract claim against Sarah. This arrangement is an example of a(n) .

Accepted Answer

This is an example of an assignment of rights, where Jane assigns her rights to Sarah's debt to Becky in exchange for payment.

Question 11

Insurance contracts and all forms of creditor collection agreements are contracts.

Accepted Answer

Insurance contracts and creditor collection agreements can have third-party beneficiaries, meaning someone other than the parties involved in the agreement can benefit from it.

Question 12

Jones buys a life insurance policy from Liberty Insurance Company. The policy is designed to pay Smith the sum of $100,000 upon Jones's death. The policy is an example of .

Accepted Answer

The policy is a third-party beneficiary contract because Smith is the intended beneficiary who will receive the payment upon Jones's death.

Question 13

Explain the various types of third-party beneficiary contracts.

Accepted Answer

The answer of Explain the various types of third-party beneficiary...

Question 14

A(n) is the present transfer of an existing right.

Accepted Answer

Assignment is the present transfer of an existing right from one person to another. Garnishment is a legal process that allows a creditor to take a portion of a debtor's wages or bank account. Attachment is the legal process of seizing someone’s property until debts are paid. Consideration is something of value exchanged for a promise or performance.

Question 15

In an intended beneficiary contract, there is no intent to bring benefits to the third party.

Accepted Answer

In an intended beneficiary contract, there is an intent to bring benefits to the third party.

Question 16

In an contract, there is no intent to bring benefits to the third party. The benefit is unintentional and the third party cannot sue to enforce such a contract.

Accepted Answer

An incidental beneficiary is a third party who unintentionally benefits from a contract between two other parties. The contract is not intended to bring benefits to the third party, and therefore, the third party cannot sue to enforce such a contract.

Question 17

Daniel works for Jake in exchange for Jake's promise to pay Anne the money Daniel owes her. This is an example of a contract.

Accepted Answer

This is an example of a creditor beneficiary, as Anne is the intended beneficiary of the contract between Daniel and Jake.

Question 18

Which of the following is true about an assignment of rights after the obligor-promisor has received notice of the assignment by the obligee to an assignee?

Accepted Answer

Once the obligor-promisor receives notice of the assignment, the assignee stands in the shoes of the obligee meaning that the assignee has the same rights and benefits as the obligee had in the original contract. The offer is not terminated, it remains valid, and consideration is not implied under the doctrine of promissory estoppel just because an assignment of rights has been made.

Question 19

In an contract, two parties to a contract (the promisor and promisee), either by words, writing, or actions, intend to bring benefits to a third party by virtue of an enforceable contract.

Accepted Answer

An intended beneficiary is a third party in a contract who is intended to receive benefits from that contract. In contrast, an incidental beneficiary is a third party who may receive some benefit from a contract but was not intended to do so. A guarantor is a person who agrees to pay a debt or perform a duty if the original debtor or obligor fails to do so, but this is not the same as a beneficiary. Therefore, the correct choice is D, intended beneficiary.

Question 20

Generally, in an assignment, unless the obligor receives of assignment by the obligee-assignor, the obligor has no duty to the assignee.

Accepted Answer

The term "notice" refers to the obligation of an obligor to be informed of the assignment of a debt or other obligation to an assignee. If the obligor is not notified of the assignment, they may continue to pay the original obligee-assignor, and the assignee may not be able to enforce the assignment. Therefore, it is important for the obligee-assignor to provide notice of the assignment to the obligor. Gifts, delegations, and abrogations do not relate to assignments of an obligation.

Quiz 9: The Law of Contracts and Sales I