Question 1

Elvia has a contract to teach sixth grade at Margena Middle School. She decided she could make more money writing a book, so she wants to assign her teaching contract to her friend, Stephanie, who is also a licensed teacher.  Which of these statements is true?

Accepted Answer

This situation involves both an assignment and a delegation. An assignment refers to the transfer of benefits or rights under the contract from Elvia to Stephanie, while delegation refers to the transfer of duties or obligations under the contract from Elvia to Stephanie. Since teaching is a personal service contract that depends on the unique skills of the teacher, Elvia cannot simply assign her rights and delegate her duties without the consent of the school district. If the school district agrees, it would involve both the transfer of Elvia's contractual benefits to Stephanie (assignment) and the transfer of her teaching duties (delegation).

Question 2

Under the Restatement, if there are successive assignments of the same right:

Accepted Answer

A prior assignee generally has the superior claim to the assigned right over subsequent assignees, unless specific exceptions apply, according to the principles outlined in the Restatement of Contracts.

Question 3

Which of the following is NOT true concerning the requirements for an effective assignment?

Accepted Answer

Consideration is not always required for an effective assignment. However, it may be required in certain situations, such as when the assignor is providing the assignee with something of value in exchange for the assignment.

Question 4

All but which of the following is true about a delegation of duties?

Accepted Answer

The courts typically scrutinize assignments more closely than delegations because assignments involve the transfer of rights, which can have a more significant impact on the parties involved, whereas delegations involve the transfer of duties, which generally does not change the rights or obligations under the contract as significantly.

Question 5

Barbara owes Arthur $2,000. On July 1, Arthur assigns the right to the $2,000 to Caleb. Thereafter, on July 15, Arthur assigns the same right to David, who in good faith gives value for it and knows nothing about the first assignee. In this case:

Accepted Answer

The answer of Barbara owes Arthur $2,000. On July 1,...

Question 6

Distinguish between an assignment, a delegation, and a third-party beneficiary contract as to the time rights of the third party arise.

Accepted Answer

The answer of Distinguish between an assignment, a delegation, and...

Question 7

A(n) __________ is an intended beneficiary of a contract who receives the benefits of the contract as a gift.

Accepted Answer

A donee beneficiary is the intended beneficiary of a contract who receives the benefits of the contract as a gift. An incidental beneficiary, on the other hand, is someone who may be affected by a contract but is not intended to receive any benefits from it. An assignor is someone who transfers their rights or obligations under a contract to another party.

Question 8

Anita owes Brad $75,000. Brad signs a written statement granting Carl a gratuitous assignment of his rights from Anita. If Brad delivers the signed statement to Carl before he dies:

Accepted Answer

The delivery of the statement to Carl makes the assignment irrevocable because it signifies Brad's intention to transfer his rights to Carl, and the act of delivery completes the assignment process, making it binding and irrevocable even if Brad dies.

Question 9

List the implied warranties imposed by law on an assignor who has received value for the assignment.

Accepted Answer

The answer of List the implied warranties imposed by law...

Question 10

If Randall and Gale agree to an assignment of Randall's contract with Doug:

Accepted Answer

An assignment of "the contract" typically means both the assignment of rights and the delegation of duties under the contract, unless the language of the contract or the circumstances indicate otherwise. This principle is recognized in both the Uniform Commercial Code (UCC) and the Restatement of Contracts, making choice C correct.

Question 11

Courts will enforce contracts for the benefit of all but which of the following?

Accepted Answer

Courts typically enforce contracts for the benefit of donee beneficiaries, creditor beneficiaries, and intended beneficiaries, as these parties are considered to have rights under the contract. However, incidental beneficiaries, who may benefit from a contract but for whom the benefits were not directly intended, do not have enforceable rights under the contract.

Question 12

Will wants to buy a new car. He goes to the bank to get a loan for the purchase, and signs an agreement to pay $10 per month in premiums on a term life insurance policy which names the bank as the recipient of the policy proceeds in the event of his death before the loan is repaid. The bank is a(n):

Accepted Answer

The bank is a creditor beneficiary because it benefits from the term life insurance policy taken out by Will, as it will receive the policy proceeds if Will dies before repaying the loan, ensuring the loan is paid off.

Question 13

Harold hired Blake Painters to paint his house. Blake decides he has too many jobs and delegates the duties to the Andrews Company. If Andrews does a poor job, and drips paint on Harold's flowers and windows, Harold:

Accepted Answer

Harold can sue both Blake and Andrews because Blake, who was originally contracted, is still responsible for the subcontractor's (Andrews) performance. This principle holds in many legal systems, where the original contractor cannot absolve themselves of responsibility by subcontracting.

Question 14

Give an example of an assignment of rights and explain the relationship of the parties.

Accepted Answer

The answer of Give an example of an assignment of...

Question 15

Which one of the following assignments would probably be prohibited by a court?

Accepted Answer

Assignments that involve personal services or that would significantly change the obligee's expectations are generally prohibited. In choice A, an assignment of future wages might be considered personal and could be subject to various legal restrictions, making it the most likely to be prohibited by a court.

Question 16

A(n) __________ is a third party who obtains possible benefits but no rights under a contract.

Accepted Answer

An incidental beneficiary is a third party who obtains possible benefits but no rights under a contract. They are not intended to receive benefits, but they may benefit from the performance of the contract. This is different from an intended beneficiary, who is specifically named and intended to receive benefits from the contract. Assignor and donee beneficiary are not relevant to this definition.

Question 17

The privilege to play tennis and socialize at the Capital City Country Club (CCCC) is obtained through application, references, resumes, and fees. Steven and Chanel want to assign the remaining 4 years of their 5-year membership to Charles and Prissy so that Steven and Chanel may join the posh Silver Hawk Tennis and Polo Club. CCCC sues to enjoin Steven and Chanel from assigning their membership. CCCC will most probably:

Accepted Answer

CCCC will most probably prevail because memberships in clubs like the Capital City Country Club are typically considered personal contracts based on the individual qualifications of the members. Such contracts often include clauses that prevent assignment to ensure that all members meet the club's specific criteria, reflecting an intention for the contract to be personal and non-assignable.

Question 18

Which of the following involves an invalid assignment that a court would not enforce?

Accepted Answer

Assignments of certain types of contracts, such as personal service contracts or contracts involving a high degree of personal trust and confidence, are generally not enforceable. An automobile liability insurance policy is a contract that is personal to the insured, as it involves a high degree of trust and confidence in the individual. Therefore, an assignment of such a policy would typically be invalid and not enforced by a court.

Question 19

Renie has a right to $1,000 against Edd and assigns it for $850 to Megan in exchange for a week's stay at Megan's beach house. Later, Renie gives Edd a release. Megan:

Accepted Answer

When Renie assigned her right to Megan, she impliedly warranted that she would do nothing to defeat or impair that right. By giving Edd a release, Renie breached this implied warranty, allowing Megan to recover damages from Renie for the breach.

Question 20

Stark enters into a contract with a contractor to build a large shopping mall in River City. Donner will greatly benefit from this contract since his convenience store is adjacent to the mall. Donner in this instance is:

Accepted Answer

Donner is an incidental beneficiary because he will benefit from the construction of the shopping mall due to its proximity to his convenience store, but he is not a party to the contract nor is the contract intended for his benefit.

Quiz 16: Third Parties to Contracts

Elvia has a contract to teach sixth grade at Margena Middle School. She decided she could make more money writing a book, so she wants to assign her teaching contract to her friend, Stephanie, who is also a licensed teacher. Which of these statements is true?