Farah makes and sells camping gear. Farah and Gobi enter into a contract for a delivery of the gear to Gobi's Outfitters retail locations for an invoiced price. Farah transfers the right to payment under the contract to Haulers Distribution Inc. This transfer is
A) a delegation.
B) an assignment.
C) a third party beneficiary contract.
D) prohibited.

Question

Quizplus · Accepted Answer

The transfer of the right to payment under a contract is an assignment. Option A is incorrect because a delegation involves the transfer of duties, rather than rights. Option C is incorrect because a third party beneficiary contract involves creating a contract for the benefit of a third party, which is not the case here. Option D is incorrect because such transfers are generally allowed unless explicitly prohibited by the terms of the original contract.

Farah Makes and Sells Camping Gear