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Homework answers / question archive / National American University BUSINESS L 310 Chapter 18-THIRD PERSONS AND CONTRACTS TRUE/FALSE 1)Generally, only the parties to a contract may sue on it

National American University BUSINESS L 310 Chapter 18-THIRD PERSONS AND CONTRACTS TRUE/FALSE 1)Generally, only the parties to a contract may sue on it

Law

National American University

BUSINESS L 310

Chapter 18-THIRD PERSONS AND CONTRACTS

TRUE/FALSE

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

 

                                           

 

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

 

                                           

 

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

 

                                           

 

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

 

                                           

 

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

 

                                           

 

  1. 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.

 

 

                                           

 

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

 

                                           

 

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

 

                                           

 

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

 

                                           

 

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

 

                                           

 

  1. Generally, an assignment may be in any form.

 

                                           

 

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

 

                                           

 

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

 

                                           

 

  1. 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 as- signee.

 

                                           

 

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

 

                                           

 

  1. A cause of action may not be assigned.

 

                                           

 

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

 

                                           

 

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

 

                                           

 

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

 

                                           

 

  1. An employer can assign to another employer the right to have an employee work.

 

                                           

 

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

 

                                           

 

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

 

                                           

 

  1. The making of an assignment relieves the assignor of any and all obligations existing under the origi- nal contract.

 

                                           

 

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

 

                                           

 

  1. An obligor required to render a performance under a contract can transfer the duty to perform to an- other person whenever desired.

 

                                           

 

  1. 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. 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.

 

                                           

 

MULTIPLE CHOICE

 

  1. 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.

                                           

 

  1. A life insurance contract is a third-party:
    1. beneficiary contract.
    2. assignment contract.
    3. payment contract.
    4. performance contract.

                                           

 

  1. 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.         
  2. A third-party beneficiary contract may be amended:
    1. with the consent of the beneficiary.
    2. by operation of law.

 

    1. if the contract allows modifications without the beneficiary's consent.
    2. all of the above.

                                           

 

  1. Which of the following is not a third-partybeneficiary 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       
  2. 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.

                                           

 

  1. 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.            
  2. The party making an assignment is called the:
    1. assignee.
    2. assignor.
    3. obligor.
    4. successor.

                                           

 

  1. An assignment:
    1. is a contract.
    2. requires consideration.
    3. is a transfer of rights.
    4. is not enforceable.

                                           

 

  1. 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.

                                           

 

  1. 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.     
  2. Generally, it is easiest to assign:
    1. credit.
    2. personal services.
    3. money.
    4. all of the above.

                                           

 

  1. The right to performance under a contract can be assigned:
    1. if the burden of performance is not materially increased.
    2. if the contract requires the performance of personal services.
    3. if the contract provides for the extension of credit.
    4. all of the above.

                                           

 

  1. 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.
  2. The making of an assignment                          the assignor of any obligation of the contract.
    1. relieves
    2. conditionally relieves
    3. does not relieve
    4. discharges

                                           

 

  1. If an obligor could successfully defend against a suit brought by the assignor:
    1. the obligor will also prevail against the third-party beneficiary.
    2. the obligor will also prevail against the assignee.
    3. the obligor will also prevail against the incidental beneficiary.
    4. none of the above.

                                           

 

  1. 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.

                                           

 

  1. An obligor may delegate his or her duties to perform under a contract when the:
    1. performance of the duty is standardized and nonpersonal.
    2. obligor is unable to perform his or her duties.
    3. contract is silent as to the right of assignment.
    4. obligor is an expert in his or her specialized duties under the contract.               
  2. Unless language or circumstances indicate the contrary, a general assignment is:
    1. a transfer of property only.
    2. both a transfer of rights and a delegation of duties.
    3. a delegation of duties only.
    4. a transfer of rights only.

                                           

 

 

  1. The delegator of construction duties remains liable if:
    1. the delegatee performs the work properly, but the obligee did not approve of the delega- tion.
    2. the delegatee performs the work improperly.
    3. the obligee objects in writing to the delegatee’s performance of the work, even if the dele- gatee performs the work properly.
    4. the value of the contract is $500 or more and the delegatee performs the work properly.        

 

CASE

 

  1. A professor owned a home next door to a very dilapidated, neglected home. John Cataldo purchased the home next door and made a contract with Wizard Home Improvements for a complete renovation of the property. The professor was delighted because the improvement of the Cataldo home was up- grading the neighborhood and raising the value of the professor's home.

 

After making the last required payment on the contract, John Cataldo became seriously ill and ulti- mately was taken to a nursing home for care.

 

When Wizard learned of Cataldo's illness and confinement, Wizard ceased work on the Cataldo home. Because the outside renovation work had not been completed, the premises began to return to its for- mer rundown condition. The professor ultimately sued Wizard as a third-party beneficiary of the con- tract between Cataldo and Wizard. What is the probable outcome of the lawsuit?

 

 

 

  1. Walker Meeks is currently a party to two contracts. On the first contract, he has agreed to paint a por- trait of a gentleman riding a horse. This portrait is for the wall of the gentleman's study. The gentleman chose Meeks for his realism in portraying the true feelings behind portrait models. Meeks' second con- tract is to paint the house of Sylvia Sneed.

 

Meeks is offered an employment contract for a large sum of money. He wishes to accept, but this would render him unable to complete the aforementioned contracts. Meeks delegates the painting of the portrait to his friend Bob, an impressionist, and delegates the painting of Sylvia's home to Ted, a professional house painter.

 

Neither the gentleman nor Sylvia intends to allow the delegation to occur. Comment on the probable outcome of the dispute.

 

 

  1. Janet Jones sold the assets and liabilities of her coin-operated laundry to Kevin Katz for $10,000. The assets of the business included all of the washers and dryers. The liabilities included the amounts still owing on seven new dryers, which had been purchased recently from Dryer Company under an install- ment contract. Katz agreed to make the installment payments on the new dryers as they came due. Af- ter Katz failed to make an installment payment when it was due, Dryer Company sued Jones. Jones claimed she no longer was liable. How will the court decide?

 

 

 

 

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