Question 1

Ian owes Jo $5,000. Jo assigns the right to this payment to Kyle. Notice by Jo to Ian of the assignment
A) must be given immediately .
B) must be given within thirty days.
C) must be given within a reasonable time.
D) is not required.

Accepted Answer

In the context of assignment of rights, notice of the assignment to the debtor (in this case, Ian) is not legally required for the assignment to be effective. The assignment between Jo and Kyle is valid upon agreement, regardless of whether Ian is notified. However, notifying Ian would be practical to ensure that he makes payments to the correct party (Kyle) going forward.

Question 2

Carol takes out an insurance policy on her truck, a Dodge pick-up. Carol can assign her policy to Elmer, who owns a Ford F-150,
A) under any circumstances .
B) under no circumstances .
C) as long as she does so in writing.
D) if Elmer agrees to the assignment.

Accepted Answer

Insurance policies are typically personal contracts and cannot be assigned to another party without the insurer's consent.

Question 3

D'Alemberte contracts with Ellas to render personal nursing services for the benefit of Federica. This is
A) a delegation.
B) an assignment.
C) a third party beneficiary contract.
D) an implied contract.

Accepted Answer

This is a third party beneficiary contract because the contract is made for the benefit of a third party, Federica, who is intended to receive the nursing services.

Question 4

Elin owes Floyd $10,000. Floyd assigns the claim to Gary. Gary does not notify Elin of the assignment. A week later, Floyd assigns the same claim to Holly. Holly immediately notifies Elin of the assignment. Holly has
A) priority to payment in all states .
B) priority to payment in states that follow the English rule.
C) no priority to payment.
D) priority to payment in most states.

Accepted Answer

In states that follow the English rule, the first assignee to notify the debtor has priority. Since Holly notified Elin first, she has priority in those states.

Question 5

Uri and Victor enter into a contract by which Uri promises to deliver business cards, advertising banners, and other marketing materials to Victor. Uri later transfers his duty under the contract to Wren. The delegator is
A) Uri.
B) Victor.
C) Wren.
D) none of the choices.

Accepted Answer

Uri is the delegator because he is the one who originally had the duty to perform under the contract and has transferred that duty to another party, Wren.

Question 6

Pico, a famous chef, agrees to give ten culinary lessons to Rhoda in exchange for $1,200. Pico's attempt to transfer his contract duties to Sven, an unknown sous-chef, will probably be
A) permitted because contracts may be freely delegated.
B) permitted because the contract is concerned with cookery.
C) prohibited because contracts may not be freely delegated.
D) prohibited if Pico and Sven have different skill levels.

Accepted Answer

The answer of Pico, a famous chef, agrees to give...

Question 7

Retail Outlets LLC contracts with Smooth Paving Inc. to grade and pave a parking lot. The contract provides that it cannot be assigned without Retail's consent. Later, Smooth assigns the contract to Tough Road Company without obtaining Retail's consent. Retail could most successfully argue that the contract cannot be assigned because
A) the assignment is prohibited by statute.
B) the contract is personal.
C) the assignment will materially change a risk.
D) the contract prohibits assignment.

Accepted Answer

The contract explicitly states that it cannot be assigned without Retail's consent, which means the assignment is prohibited by the terms of the contract itself.

Question 8

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
A) will not be effective until notice is given to Irma.
B) will become effective after thirty days even if no notice is given to Irma.
C) is immediately effective.
D) is invalid.

Accepted Answer

An assignment of rights under a contract is generally effective immediately upon the assignor's intention to make the assignment, regardless of whether the obligor (Irma) is notified.

Question 9

Ben and Cathy enter into a contract under which Ben agrees to cater Cathy's wedding. The contract expressly prohibits any transfer of rights without the assignee's consent. Cathy may transfer the right to receive Ben's services to her sister Diane
A) if Ben consents.
B) if Cathy decides to use a different caterer.
C) if Diane is also getting married.
D) under no circumstances.

Accepted Answer

Cathy may transfer the right to receive Ben's services to her sister Diane if Ben consents, as the contract expressly prohibits any transfer of rights without the assignee's consent.

Question 10

Music Masters Inc. and Nina enter into a contract for Nina to write a dozen songs for which Music Masters agrees to pay her. Nina transfers her right to payment under the contract to Omni Artists Agency. In the transfer of rights, the assignor is
A) Music Masters .
B) Nina.
C) Omni Artists.
D) both Nina and Omni Artists.

Accepted Answer

Nina is the assignor because she is the one transferring her right to payment under the contract to Omni Artists Agency.

Question 11

Ira owes Jessie $1,000. Kerry owes Ira $1,000. Ira unconditionally assigns his rights to Jessie. Ira's right to the $1,000 is then
A) unchanged .
B) extinguished.
C) incidental.
D) in abeyance.

Accepted Answer

When Ira unconditionally assigns his rights to Jessie, his right to the $1,000 from Kerry is extinguished, as Jessie now holds that right.

Question 12

Rachel and Stuart enter into a contract for the sale of Rachel's textbook at the end of the fall semester for which Stuart agrees to pay $75. Rachel wants to transfer her right to payment for the book to Terry. This transfer is
A) a delegation .
B) an assignment.
C) prohibited.
D) a third-party beneficiary contract.

Accepted Answer

An assignment involves transferring rights under a contract to another party. Here, Rachel is transferring her right to receive payment from Stuart to Terry, which is an assignment.

Question 13

Bill and Charlene enter into a contract for the clearing, plowing, and preparing of Charlene's 100-acre tract for which she agrees to pay $1,000. Bill transfers his duty under this contract to Dewey. The delegatee is
A) Dewey .
B) Charlene.
C) Bill.
D) none of the choices.

Accepted Answer

Dewey is the delegatee because Bill transferred his duty under the contract to Dewey. A delegatee is the party to whom duties are transferred in a contract.

Question 14

Ilene and Jerry enter into a contract under which Ilene agrees to provide groundskeeping services for Jerry's Family Fun Center. Under an anti-delegation clause, the contract can prohibit and prevent the transfer of
A) only duties that are personal in nature.
B) only duties that are impersonal in nature.
C) no duties under the contract.
D) all duties under the contract.

Accepted Answer

The answer of Ilene and Jerry enter into a contract...

Question 15

Laramie contracts to provide cattle-herding services to Miles for $5,000 per month. Laramie cannot transfer this duty
A) under any circumstances.
B) without continuing to be potentially liable.
C) without Miles's consent.
D) without paying Miles at least one monthly fee.

Accepted Answer

Laramie can delegate the duty to provide services but will remain potentially liable if the delegatee fails to perform.

Question 16

Leon contracts to install automatic watering troughs in Kendall's dairy barn. Leon then becomes seriously ill and contracts with Jake to install the troughs. Jake is unreliable and never shows up to install the troughs. In most states, Kendall can sue
A) no one .
B) Jake only.
C) Leon only.
D) Jake or Leon.

Accepted Answer

Leon is liable for breach of contract because he failed to perform his contractual obligation to install the troughs. Jake is also liable for breach of contract because he failed to perform his contractual obligation to install the troughs.

Question 17

Joy and Kris enter into a contract for Kris to lay sod in Joy's yard. When Kris's schedule conflicts, she contacts Lena, to whom Kris "assigns all rights under the contract." Kris is
A) no longer liable under the contract .
B) liable to Joy for breach of contract.
C) liable to Joy if Lena does not perform.
D) liable to Lena for inducing a prohibited contract.

Accepted Answer

Kris is liable to Joy if Lena does not perform because an assignment of rights does not relieve the original party (Kris) of their obligations under the contract unless there is a novation.

Question 18

Market Company and Nick enter into a contract for Nick to cut and trim the landscaping around Market's building before a meeting of the company's sales staff. When Nick's schedule conflicts, he asks Otis to do the cutting and trimming. This transfer of duties is
A) a delegation .
B) an assignment.
C) a third party beneficiary contract.
D) prohibited.

Accepted Answer

The transfer of duties from Nick to Otis is a delegation, where Nick delegates his contractual obligation to perform the landscaping work to Otis.

Question 19

Beta Corporation and Code Inc. enter into a contract for the design of custom software for which Beta agrees to pay $5,000. Code transfers the right to payment under the contract to Debits LLC. Debits is
A) an obligor .
B) an assignee.
C) a third-party beneficiary.
D) a delegatee.

Accepted Answer

Debits LLC is an assignee because Code Inc. transferred its right to receive payment under the contract to Debits LLC. An assignee is a party to whom rights under a contract are transferred.

Question 20

A contract between Laser Equipment, Inc., and Medical Center contains a clause stating that any assignment is "void." This ordinarily prohibits
A) any assignment.
B) no assignment.
C) only an assignment of contract rights to personal services.
D) only an assignment that would change a risk.

Accepted Answer

The clause stating that any assignment is "void" typically prohibits any assignment of the contract, meaning that neither party can transfer their rights or obligations under the contract to another party.

Quiz 15: Third Party Rights

Ian owes Jo $5,000. Jo assigns the right to this payment to Kyle. Notice by Jo to Ian of the assignment

Carol takes out an insurance policy on her truck, a Dodge pick-up. Carol can assign her policy to Elmer, who owns a Ford F-150,

D'Alemberte contracts with Ellas to render personal nursing services for the benefit of Federica. This is

Elin owes Floyd $10,000. Floyd assigns the claim to Gary. Gary does not notify Elin of the assignment. A week later, Floyd assigns the same claim to Holly. Holly immediately notifies Elin of the assignment. Holly has

Uri and Victor enter into a contract by which Uri promises to deliver business cards, advertising banners, and other marketing materials to Victor. Uri later transfers his duty under the contract to Wren. The delegator is

Pico, a famous chef, agrees to give ten culinary lessons to Rhoda in exchange for $1,200. Pico's attempt to transfer his contract duties to Sven, an unknown sous-chef, will probably be

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

Ben and Cathy enter into a contract under which Ben agrees to cater Cathy's wedding. The contract expressly prohibits any transfer of rights without the assignee's consent. Cathy may transfer the right to receive Ben's services to her sister Diane

Music Masters Inc. and Nina enter into a contract for Nina to write a dozen songs for which Music Masters agrees to pay her. Nina transfers her right to payment under the contract to Omni Artists Agency. In the transfer of rights, the assignor is

Ira owes Jessie $1,000. Kerry owes Ira $1,000. Ira unconditionally assigns his rights to Jessie. Ira's right to the $1,000 is then

Rachel and Stuart enter into a contract for the sale of Rachel's textbook at the end of the fall semester for which Stuart agrees to pay $75. Rachel wants to transfer her right to payment for the book to Terry. This transfer is

Bill and Charlene enter into a contract for the clearing, plowing, and preparing of Charlene's 100-acre tract for which she agrees to pay $1,000. Bill transfers his duty under this contract to Dewey. The delegatee is

Ilene and Jerry enter into a contract under which Ilene agrees to provide groundskeeping services for Jerry's Family Fun Center. Under an anti-delegation clause, the contract can prohibit and prevent the transfer of

Laramie contracts to provide cattle-herding services to Miles for $5,000 per month. Laramie cannot transfer this duty

Leon contracts to install automatic watering troughs in Kendall's dairy barn. Leon then becomes seriously ill and contracts with Jake to install the troughs. Jake is unreliable and never shows up to install the troughs. In most states, Kendall can sue

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

Market Company and Nick enter into a contract for Nick to cut and trim the landscaping around Market's building before a meeting of the company's sales staff. When Nick's schedule conflicts, he asks Otis to do the cutting and trimming. This transfer of duties is

Beta Corporation and Code Inc. enter into a contract for the design of custom software for which Beta agrees to pay $5,000. Code transfers the right to payment under the contract to Debits LLC. Debits is

A contract between Laser Equipment, Inc., and Medical Center contains a clause stating that any assignment is "void." This ordinarily prohibits