Question 1

An incidental beneficiary is the same thing as a third-party beneficiary.

Accepted Answer

False

Question 2

A person entitled to receive money may generally assign that right to another person.

Accepted Answer

This is known as an assignment of rights and is generally allowed unless there is a specific law or contract that prohibits it. However, the assignment does not release the original person from their obligation to pay the money, as the assignee simply steps into their shoes to receive the payment.

Question 3

Only written words that show an intention to transfer or assign will be given the effect of an assignment.

Accepted Answer

An assignment can be effective even without written words if the intention to transfer rights is clearly demonstrated through actions or other forms of communication.

Question 4

An assignee of a contract can bring suit on the contract only in the name of the assignor.

Accepted Answer

An assignee of a contract generally has the right to bring suit in their own name, as the assignment typically transfers to the assignee the right to enforce the contract.

Question 5

When work is guaranteed by one who repairs a building,the owner,on selling the building,may assign the guarantee to the buyer.

Accepted Answer

According to common law principles, guarantees of workmanship transfer with ownership of the building. Therefore, the owner can assign the guarantee to the buyer upon selling the building.

Question 6

The rights of a third-party beneficiary always can be destroyed without that beneficiary's consent.

Accepted Answer

The rights of a third-party beneficiary cannot always be destroyed without their consent. If a contract explicitly states that the beneficiary's rights cannot be revoked without their consent, then those rights are legally protected. Additionally, some jurisdictions have laws that protect the rights of third-party beneficiaries even in the absence of explicit contract language.

Question 7

An assignment is a transfer of rights,and a delegation is a transfer of duties.

Accepted Answer

An assignment is a transfer of rights from one party (assignor) to another (assignee), while a delegation is a transfer of duties from one party (delegator) to another (delegatee).

Question 8

Generally,an assignment may be in any form.

Accepted Answer

An assignment can take any form, including a written essay, a group project, a presentation, or even a creative work.

Question 9

In general,one may assign rights if that does not cause the obligor's duties to increase or change materially.

Accepted Answer

This is a general rule in contract law known as the "no increase in duties rule." It ensures that the obligor (the party with the duty) is not unfairly burdened by the assignment of rights to a third party. However, there are some exceptions to this rule depending on the specific circumstances of the contract.

Question 10

A cause of action may not be assigned.

Accepted Answer

The answer of A cause of action may not be...

Question 11

It is necessary that a third-party beneficiary be identified by name.

Accepted Answer

A third-party beneficiary can be identified by name or can be a member of a clearly defined group or class of individuals. It is not necessary for them to be identified by name.

Question 12

If the obligor is notified in any manner that there has been an assignment and that any money due must be paid to the assignee,the obligor's obligation can be discharged only by making payment to the assignee.

Accepted Answer

Once an obligor has been notified of the assignment of a debt, they are required to make payments to the assignee in order to discharge their obligation. Failure to do so could result in legal consequences.

Question 13

Whenever a contract is intended to benefit a third person,this person is referred to as a delegator.

Accepted Answer

Whenever a contract is intended to benefit a third person, that person is referred to as a beneficiary, not a delegator. A delegator is someone who delegates tasks or responsibilities to another person.

Question 14

When a municipality contracts with a contractor to pave a street,homeowners on that block are third-party beneficiaries of the contract.

Accepted Answer

The answer of When a municipality contracts with a contractor...

Question 15

The beneficiary of a life insurance policy is not subject to any policy restrictions that had been agreed to between the insured and the insurance company.

Accepted Answer

The beneficiary of a life insurance policy is subject to the terms and conditions of the policy, including any restrictions or provisions agreed upon between the insured and the insurance company. These can affect the payout or the circumstances under which the policy pays out.

Question 16

Persons who are not a party to a contract can never sue on the contract.

Accepted Answer

In certain circumstances, a third party beneficiary may have the right to sue on a contract, even though they were not a party to the agreement. Additionally, in certain cases, a non-party may have standing to sue for damages resulting from a breach of contract. However, in general, persons who are not a party to a contract cannot sue on the contract.

Question 17

An assignment,if otherwise valid,takes effect the moment it is made.

Accepted Answer

This is known as the principle of instantaneousness, where an assignment becomes effective as soon as it is made, unless otherwise specified in the terms of the assignment.

Question 18

A third person does not have the status of an intended third-party beneficiary unless it is clear at the time the contract was formed that the parties intended to impose a direct obligation with respect to the third person.

Accepted Answer

This statement is true. A third person can only become an intended third-party beneficiary if it was the intention of the parties involved in forming the contract to create a direct obligation with respect to that person. This intent must be clear at the time the contract was formed.

Question 19

The assignments of the right to money always gives the assignee the right to collect and keep the funds.

Accepted Answer

The answer of The assignments of the right to money...

Question 20

Generally,only the parties to a contract may sue on it.

Accepted Answer

Only the parties who have entered into a contract have the right to sue or be sued upon it. Third parties generally do not have any rights in a contract and cannot sue the parties involved.

Quiz 18: Third Persons and Contracts