Austin Community College

LGLA MISC

Chapter 17 THIRD PERSONS AND CONTRACTS

TRUE FALSE

1)Only parties who actually signed a contract may sue on it.

1. True

2. False

2. Intended beneficiaries and creditor beneficiaries can be the same person.

1. True

2. False

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

1. True

2. False

4. Bruce is a donee beneficiary to a life insurance contract if he is listed as the beneficiary.

1. True

2. False

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

1. True

2. False

6. A third person automatically has the status of an intended third-party beneficiary regardless of the parties' intentions at the time of contracting.

1. True

2. False

7. The rights of a third-party beneficiary always cannot be destroyed without that beneficiary's consent.

1. True

2. False

8. 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.

1. True

2. False

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

1. True

2. False

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

1. True

2. False

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

1. True

2. False

12. Generally, an assignment must be in writing and signed by both parties.

1. True

2. False

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

1. True

2. False

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

1. True

2. False

15. The rights of an intended third-party beneficiary are destroyed if the contract is discharged in bankruptcy proceedings.

1. True

2. False

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

1. True

2. False

17. The right to file a legal claim may not be assigned.

1. True

2. False

18. An incidental beneficiary has the right to sue either party if there is a breach of contract.

1. True

2. False

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

1. True

2. False

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

1. True

2. False

21. A person who has a right to buy on credit can transfer that right to a close relative.

1. True

2. False

22. An assignee's rights are the same as those that had been possessed by the assignor.

1. True

2. False

23. The making of an assignment relieves the assignor of any and all obligations existing under the original contract.

1. True

2. False

24. When a lease is assigned, the assignee becomes the sole obligor for rent payments, and the original lessee is discharged from the lease.

1. True

2. False

25. An obligor required to render a performance under a contract can transfer the duty to perform to another person whenever desired.

1. True

2. False

26. Under the UCC, an assignment of all the assignor's rights under a contract generally is held to be both an assignment of rights and a delegation of duties.

1. True

2. False

27. When duties under a contract are delegated, the party making the delegation remains responsible for the performance of the contract just as though no delegation had been made.

1. True

2. False

MULTICHOICE

28. A third-party beneficiary:

1. may be obligated to pay for services rendered.

2. may bring suit on and enforce the contract.

3. must consent to the contract.

4. must be identified by name.

29. A life insurance contract is a third-party:

1. beneficiary  contract.

2. assignment  contract.

3. payment contract.

4. performance contract.

30. If there is a time limitation or any other restriction in a contract, a third-party beneficiary:

1. may ignore it.

2. may void it.

3. is bound thereby.

4. must consent to be bound thereby before it is effective.

31. A third-party beneficiary contract may be amended:

1. without the consent of the beneficiary.

2. by operation of law.

3. regardless of whether the contract allows modifications without the beneficiary's consent.

4. automatically when either party dies.

32. Which of the following is not a third-party beneficiary contract?

1. a contract in which A hires B to give A's niece piano lessons

2. a contract to repair sewers in front of Macy's Department Store

3. a life insurance contract with a named beneficiary

4. a contract between X and Y for Y to install a new door on Z's home

33. In a contract in which a tenant borrowed money from a bank for the purpose of adding a bathroom to her apartment, the landlord is:

1. a direct beneficiary.

2. in privity of contract with the tenant.

3. a third-party beneficiary.

4. an incidental beneficiary.

34. An incidental beneficiary of a contract:

1. can sue to enforce the contract.

2. cannot sue to enforce the contract.

3. is a beneficiary specifically named in the contract.

4. is an assignee of the direct beneficiary.

35. The party making an assignment is called the:

1. assignee.

2. assignor.

3. obligor.

4. successor.

36. An assignment of royalties to a song:

1. is a contract.

2. requires consideration.

3. is a transfer of rights.

4. is not enforceable.

37. When a buyer assigns the right to goods under a contract, the buyer's liability to make payment to the seller is:

1. transferred to the third party.

2. terminated.

3. still in effect.

4. shared equally with the third party.

38. Jones has a life insurance policy on his own life that provides that in the event of his death, his mother will receive the proceeds. Jones' mother is a(n):

1. incidental beneficiary.

2. donee beneficiary.

3. creditor beneficiary.

4. assignee.

39. Alberto enters into a contract with a contractor to build a parking garage in Gotham City. Stop- N-Go will greatly benefit from this contract since Alberto's parking garage is adjacent to Stop-n-Go. In this scenario Stop-n-Go is:

1. an incidental beneficiary.

2. a partial beneficiary.

3. a donee beneficiary.

4. an implied beneficiary:

40. In general, an assignee stands:

1. in a position subordinate to the assignor.

2. exactly in the position of the assignor.

3. in a position superior to the assignor.

4. in a position similar to, but not equal to, the assignor.

41. An assignment is valid only if:

1. it is in a particular form.

2. it is written.

3. there is a manifestation of the intent to assign.

4. the assignment is paid for by the assignee.

42. The making of an assignment                              the assignor of any obligation of the contract.

1. relieves

2. conditionally relieves

3. does not relieve

4. discharges

43. Which of the following duties would most likely not be delegable?

1. Joe has a contractual duty to pay Izzie $50.

2. Ken has a contractual duty to deliver 50 bushels of corn to Martin by October 1.

3. Andy has a duty to teach an accounting class at a community college during the fall semester.

4. Josh has a duty to mow Genelle's lawn at least once a week.

44. The substitution of an old contract for a new one that replaces an obligation or a party for another is a:

1. novation.

2. warranty.

3. assignment.

4. delegation of duties.

45. An obligor may delegate his or her duties to perform under a contract when the:

1. performance of the duty is standardized and nonpersonal.