Question 1

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

The statute explicitly prohibits the assignment of the right to receive workers' compensation benefits, meaning that regardless of consent, advisement, or changes to risk or duties, the assignment cannot legally occur.

Question 2

If a contract stipulates that it cannot be assigned, then it cannot be assigned unless the assignment

Accepted Answer

The answer of If a contract stipulates that it cannot...

Question 3

Marlo and Nita enter into a contract for the sale of Marlo's apartment for which Nita agrees to pay $250,000. Nita assigns her right to buy the apartment to Owen. Owen is

Accepted Answer

Owen is the assignee because he has been assigned Nita's right to buy the apartment, making him the party now entitled to complete the purchase under the contract.

Question 4

Elin owes Floyd $10,000. Floyd assigns the claim to Gary. Gary does not notify Elin of the assignment. Later, Floyd assigns the same claim to Holly. Holly immediately notifies Elin of the assignment. Holly has priority to payment in

Accepted Answer

In states that follow the English rule, the first assignee to notify the debtor of the assignment has priority. Since Holly was the first to notify Elin, she would have priority in these jurisdictions.

Question 5

Generally, the duties under a contract can be delegated

Accepted Answer

Delegation of duties under a contract is generally allowed unless the contract specifically prohibits it. This is because many contracts involve tasks that can be performed by someone other than the original party, as long as the task is completed as agreed. Prohibitions against delegation are often included in contracts when the personal skill or trust in a particular party is a significant part of the agreement.

Question 6

Harry assigns his rights under a contract with Irma to his college roommate, Jake. Neither Harry nor Jake notifies Irma of the assignment. The assignment

Accepted Answer

The answer of Harry assigns his rights under a contract...

Question 7

Under a contract, an assignment of negotiable instruments

Accepted Answer

The answer of Under a contract, an assignment of negotiable...

Question 8

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

Accepted Answer

Sushi Café is the obligee because it is the party to whom a duty, or obligation, is owed in the contract with Recycle LLC.

Question 9

The rights under a contract for personal services can normally be assigned

Accepted Answer

Rights under a contract for personal services can normally be assigned if all that remains on the deal is a payment of money. This is because the obligation left does not involve the performance of personal services, but rather the fulfillment of a financial obligation.

Question 10

Retail LLC contracts with Paving Inc. to grade and pave a parking lot. The contract provides that it cannot be assigned without Retail's consent. Later, Paving assigns the contract to Roadwork Company without obtaining Retail's consent. Retail could most successfully argue that the contract cannot be assigned because

Accepted Answer

The contract explicitly prohibits assignment without Retail's consent, making any assignment without such consent invalid.

Question 11

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

When a buyer cancels a contract due to the seller's misrepresentation, the buyer is not obligated to pay the contract price, even if the right to payment has been assigned to a third party like Nations Credit Corporation. The assignment of the right to payment does not alter the buyer's rights under the original contract, including the right to cancel the contract and return the equipment due to fraud.

Question 12

For a price, Rose agrees to unload the catch from fishing boats that dock at Seafood Shipping. Rose delegates this duty to Tina, who then owes performance of the duty to the warehouse. Tina is

Accepted Answer

Tina is the delegatee because she has been delegated the duty to unload the catch from fishing boats by Rose, who originally agreed to perform this task.

Question 13

Music Masters Inc. enters into a contract to pay Nag for a dozen original songs. Nag transfers the right to payment under the contract to Omni Artists. After the transfer, Nag's contract right to the payment is

Accepted Answer

When Nag transfers the right to payment under the contract to Omni Artists, Nag's original right to the payment is extinguished because the right has been assigned to another party (Omni Artists). This means Nag no longer holds the right to payment; instead, Omni Artists now holds that right.

Question 14

Ira owes Jess $1,000. Kerr owes Ira $1,000. Ira unconditionally assigns to Jess the right to Kerr's payment. Jess's right to the $1,000 is subject to the defenses that

Accepted Answer

Jess's right to the $1,000 from Kerr is subject to any defenses Kerr had against Ira because the assignment of a right does not alter the underlying obligations or defenses that the obligor (Kerr) has. Therefore, if Kerr had any defenses against paying Ira, those defenses can still be used against Jess.

Question 15

Lew and Mavis enter into a contract for the clearing and plowing of Mavis's 350-acre tract for which she agrees to pay $1,000. Lew transfers his duty under this contract to Nye. With respect to the duties under the original contract, this transfer

Accepted Answer

Transferring a duty under a contract to another party, known as a delegation of duties, does not relieve the original party (Lew) of the obligation to perform if the delegatee (Nye) fails to perform. Lew remains potentially liable to Mavis to ensure the contract's terms are fulfilled.

Question 16

For a price, Ray agrees to unload trucks that make deliveries to Shoppers Warehouse. Ray delegates this duty to Tim, who then owes performance of the duty to the warehouse. Ray is

Accepted Answer

Ray is the obligor because he originally agreed to perform the duty (unloading trucks) and has the obligation to ensure the task is completed, even after delegating the duty to Tim.

Question 17

Beck and Call enter into a contract under which Beck agrees to cater Call's wedding. The contract expressly prohibits any transfer of rights without the assignee's consent. Call may transfer the right to receive Beck's services to Dion

Accepted Answer

The contract expressly prohibits any transfer of rights without the assignee's consent, meaning Call can transfer the right to receive Beck's services to Dion only if Beck consents to this transfer.

Question 18

If performance under a contract will vary materially on a delegation of its duties to a third party from that expected by the obligee, the delegation is

Accepted Answer

Delegation of duties under a contract to a third party is prohibited if the performance will materially vary from what the obligee expected, especially in cases where the contract requires the obligor's personal skills or trust has been placed in the obligor.

Question 19

The rights under an insurance policy can normally be assigned

Accepted Answer

Assignments involving only the payment of benefits do not change the risk or obligations of the insurer, thus they are typically allowed. This allows the policyholder to direct where the benefits should go without altering the terms of the insurance contract.

Question 20

To create a valid delegation of duties requires

Accepted Answer

The key to a valid delegation of duties is the delegator's expressed intent to make the delegation. This means that the delegator must clearly indicate their intention to delegate specific duties to another party. There is no requirement for a special form, the use of the word "delegate," or any other specific procedure beyond this expressed intent.

Quiz 17: Third Party Rights