question

Seller and Buyer enter into a K for the sale of widgets. The contract states that Buyer will pay the sales price to Seller's child, Son. Seller wishes to give Son the money as a graduation gift. Carl learns of the K from a gossipy aunt. When Buyer pays the money to Seller, Son files suit against Buyer. Son's right with respect to the contract are best described as:

answer

Vested as of the time he brouht suit against buyer.

question

A third-party beneficiary's rights vest when the beneficiary:

answer

manifests assent to the promise, brings suit to enforce the promise, or materially changes position in justifiable reliance on the promise.

question

When a delegate assumes the duty to perform, the most important consequence is:

answer

The obligee can compel performance or bring suit against the delegate for nonperformance.A

question

The best test for determining whether someone is an intended third-party beneficiary is to ask:

answer

to whome is the performance given according to the language of the contract?

question

An ________ beneficiary may eventually receive a benefit from a K but has no rights under the K.

answer

incidental.

question

If a person leaves an item of jewelry with a jeweler for repair, and the jeweler sells the item to an unsuspecting purchaser, _______________.

answer

The purchaser has title to the item and the true owner cannot recover it.

question

Entrusting goods to a merchant who deals in goods of that kind give him the power (but not the right) to ____________________ of the rights of the entruster to a buyer in the ordinary course of business.

answer

to transfer.

question

Which of the following will not revoke a gratuitous assignment?

answer

A subsequent delegation of duties by the assignor.

question

Assignment of rights and delegations of duties are ________ concepts, and the delegation of duties will not affect the assignment of rights.

answer

separate

question

Death of the assignor, the assignor taking performance directly from the obligor, and the bankruptcy of the assignor all ____________ a gratuitous assignment.

answer

revoke!

question

Which of the following is not an implied warranty given by an assignor to an assignee for value?

answer

Warranty against infringement.

question

Under a warranty against infringement...

answer

a merchant seller regularly dealing in goods of the kind sold warrants that the good delivered are free of patent, trademark, copyright, or similar claims.

question

As a general rule, if a promisor fails to perform under a K, a third-party beneficiary whose rights have vested sue the promisee if the third-party beneficiary is ___________.

answer

a credit beneficiary. A creditor beneficiary may sue on the underlying obligation, whereas a donee beneficiary generally has no right to sue for nondelivery of a gift.

question

Owner owes Arthur $1,000 for a painting he bought from him. Arthur assigns his right to payment to Annie and notifies Owen of the assignment. Owen later performs work on Arthur's home and bills Arthur $500. Arthur tells Owen to deduct it from the $1,000 he owes, which Owen does. When Annie sues Owen for the remaining $500, which of the following is not a valid defense?

answer

The $500 was a valid setoff from the amount owed under contract.

question

When an obligor delegates his duties under a K, the delegate _____.

answer

cannot be compelled to perform by the obligee absent an assumption of duties.

question

Delegation creates a power in another to _________ the delegator's contractual duties.

answer

perform

question

The delegate does not 1) _________ and 2) __________.

answer

1) Automatically become liable on thr contract when the obligor delegates his duties. 2) replace the obligor as the real party in interest.

question

If an assignor takes payment or performance directly from the obligor, _______.

answer

a gratuitous assignment is revoked, but an assignment for value is not.

question

The general rule is that when the assignor makes two assignments of the same right, if the first assignment is ______, the _____ asignee has priority.

answer

irrevocable, first.

question

Which of the following is not an action that results in the vesting of a third-party beneficiary's rights?

answer

The third-party beneficiary assigns his rights under the contract.

question

The right to receive services under a contract between _____ may be assigned but the right to receive services under a K between ______ may not.

answer

a property owner and a contractor for construction of a home; a publisher and an author.

question

The general rule is that if the assignor makes two assignments of the same right and the first assignment is irrevocable, the first assignee has priority. Which of the following fact situations is not an exception to the general rule?

answer

The second assignee for value and without notice of the prior assignment obtains a novation from the obligor, who may choose which assignee to pay.

question

Which of the following is not a factor a court considers in determining whether a party is an intended third-party beneficiary?

answer

Whether the third party materially changed his position in justifiable reliance on the promise.

question

If an assignee for value discovers that the assignor had previously assigned the same contract right to another party for value, the assignee may _____.

answer

sue the assignor for breach of warranty.

question

A writing is ________.

answer

usually not required for an effective assignment.

question

A buyer fraudulently induces a seller to sell his yacht to the buyer. The buyer then uses the yacht as collateral for a loan from a bank, which has no knowledge of buyer's fraud. What are the seller's rights with respect to the yacht?

answer

The seller can recover the yacht, but will be subject to the bank's security interest.

question

An obligor who delegates his duties _______.

answer

remains secondarily liable on the contract, even if the delegate expressly assumes the obligor's duties under the K.

question

B owes $100. A assigns his right to payment of the $100 to C and notifies B. B pays the $100 to A. If C sues B for the $100:

answer

C will prevail if she gave value to A for the assignment because assignments for value are irrevocable.

question

Which of the following is a true statement concerning the assignability of contract rights?

answer

The right to receive personal services cannot be assigned.

question

B assigns his contractual right to receive payment of $1,000 from A to C. B later assigns the same right to D, who has no knowledge of the assignment to C. Which of the following is correct?

answer

If A pays D, D will prevail if he is assignee for value.

question

Which of the following duties can be delegated?

answer

A contract to manufacture and deliver limited edition plates.

question

A writing is required for an assignment _______.

answer

of wages

question

An intended beneficiary must be ______.

answer

identifiable at the time performance is due.

question

A and B enter into a K under which A will sell 500 widgets to B for $5,000. A asisgns his right to payment for the widgets to C and notifies B. Just before A shipped the widgets, a and B agree that A will accept $4,500 if B pays within 10 days of delivery. B pays C $4,500 within 10 days of delivery of the widgets. If C sues B for the remaining $500 on the orginial contract, _____.

answer

C will not prevail because A has not shipped the widget when A and B agreed to the lower price.

question

Which of the following assignments is effective?

answer

An oral assignment of rights under an insurance contract.

question

The best test for determining whether someone is an intended third-party beneficiary is to ask:

answer

to whom is performance to be given according to the language of the K?

question

Which of the following cannot be assigned?

answer

An actor's contract with his agent.

question

An assignee's rights against an obligor are subject to _______.

answer

The defenses the obligor has against the assignor but not to setoffs arising after notice of assignment.

question

An important difference between the rights of a donee beneficiary and a creditor beneficiary is that ___________.

answer

a creditor beneficiary can sue the promisee on the underlying obligation, but a donee beneficiary cannot.

question

If a watch owner leaves her watch for repairs at the store where it has purchased and the store then borrows money from a bank, giving the bank the owner's watch as pledged collateral _______.

answer

the watch owner can recover the watch from the bank immediately.

question

Which of the following is not a factor a court considers in determining whether a party is an intended third-party beneficiary?

answer

Whether the third party materially changed his position in justifiable reliance to the promise.

question

In a sale of goods, a good faith purchaser for value ________.

answer

can be the holder of a security interest in the goods.

question

Which of the following is not required for an effective assignment of an interest in land?

answer

Consideration

question

A agrees to purchase widget from B for $300. The contract provides that A is to pay the $300 to C. B owes C $300.

answer

A is the promisor, B is the promisee, and C is the hird-party beneficiary.

question

A agrees to sell widgets to B for $450. The contract provides that b is to pay the $450 to C. C is A's niece, and the $450 is a birthday gift. Which of the following statements is accurate?

answer

A is the promisee, B is the promisor, and C is a hitrd-party beneficiary.

question

A and B enter into a contract under which A will sell 500 widgets to B for $5,000. A assigns his right to payment for the widgets to C and notifies B. Just before A shipped the widgets, A and B agreed that A will accept $4,500 if B pays within 10 days of delivery. B pays C $4,500 within 10 days of delivery of the widgets. If C sues B for the remaining $500 on the original contract, ________.

answer

C will not prevail because A had not shipped the widgets when A and B agreed to the lower price.

Contracts: Third Party Beneficiaries; Assignments – Flashcards

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