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Exam 15: Third Party Rights

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Question 1

Multiple Choice

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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.

E) A) and B)
F) A) and C)

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Question 2

True/False

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Until the obligor has notice of assignment, the obligor can discharge his or her obligation by performance to any party.

A) True
B) False

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Question 3

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A third party's right to control the details of performance of a contract indicates that the third party is an intended beneficiary.

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

A-One Landscapers, Inc., owes Friendly Finance Company $5,000.  A-One enters into a contract with Suburban Office Park under which A-One promises to maintain the landscaping on Suburban's property.  Under the contract, Suburban promises to pay Friendly Finance the amount that will be due A-One until A-One's debt to Friendly Finance is paid.  A-One performs as promised, but Suburban does not pay Friendly Finance.  Can Friendly Finance succeed in a suit against Suburban?  Why or why not?

A transfer of contract rights to a third party is an incidental benefit .

An "assignment of all rights" can create an assignment of rights but not a delegation of duties.

If a contract requires that performance be rendered directly to a third party, the third party is an incidental beneficiary.

A delegation relieves the delegator of the obligation to perform.

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

If an assignment of a right changes a risk or duty, but not materially, that right cannot be assigned.

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

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

Fact Pattern 15-1 Restore Construction Company enters into a contract with Sam to remodel Tess's Home Store, using products from United Building Supplies. Refer to Fact Pattern 15-1. Halfway through the project, Restore refuses to finish the job. The contract can be enforced against Restore by

Notice is legally necessary to establish the validity of an assignment.

Steel, Inc., and Transport Company enter into a contract.  UniOil Corporation, which will indirectly benefit from the deal, is prevented from having rights under the contract by the principle of

Pam borrows $5,000 from Quality Auto Sales to buy a car.  When Pam does not pay the loan or return the car, Quality wants to transfer the right to the payment to Rapid Collection Agency. Rapid agrees to pay Quality for this right, but for a price that is less than the amount owed. Can Quality transfer this right to Rapid without Pam's consent? If so, and Quality committed fraud in the deal with Pam, could Pam legitimately refuse to pay Rapid? Explain.

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

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

No contract can prohibit delegation of the duties of the contract.