Chap. 15

Question 0

What is assignment of rights (assignment)?

Answer 0

The transfer of contractual rights by an obligee to another party.

Question 1

What is a privity of contract?

Answer 1

The state of two specified parties being in a contract.

Question 2

Who is the assignor?

Answer 2

An obligee who transfers a right.

Question 3

Who is the assignee?

Answer 3

A party to whom a right has been transferred.

Question 4

What is the anti-assignment clause?

Answer 4

A clause that prohibits the assignment of rights under the contract.

Question 5

What is the delegation of duties?

Answer 5

A transfer of contractual duties by an obligor to another party for performance.

Question 6

Who is a delegator?

Answer 6

An obligor who has transferred his or her duty.

Question 7

Who is a delegatee?

Answer 7

A party to whom a duty has been transferred.

Question 8

What is an assumption of duties?

Answer 8

A situation in which a delegation of duties contains the term assumption, I assume the duties, or other similar language. In such a case, the delegatee is legally liable to the obligee for nonperformance.

Question 9

What is an anti-delegation clause?

Answer 9

A clause that prohibits the delegation of duties under the contract.

Question 10

What is the intended third-party beneficiary?

Answer 10

A third party who is not in privity of contract but who has rights under the contract and can enforce the contract against the promisor.

Question 11

What is a donee beneficiary contract?

Answer 11

A contract entered into with the intent to confer a benefit or gift on an intended third party.

Question 12

Who is a donee beneficiary?

Answer 12

A third party on whom a benefit is to be conferred.

Question 13

What is a creditor beneficiary contract?

Answer 13

A contract that arises in the following situation: 1) a debtor borrows money, 2) the debtor signs an agreement to pay back the money plus interest, 3) the debtor sells the item to a third party before the loan is paid off, and 4) the third party promises the debtor that he or she will pay the remainder of the loan to the creditor.

Question 14

What is a creditor beneficiary?

Answer 14

An original creditor who becomes a beneficiary under the debtor’s new contract with another party.

Question 15

What is an incidental beneficiary?

Answer 15

A party who is unintentionally benefitted by other people’s contracts.

Question 16

What is a covenant?

Answer 16

An unconditional promise to perform.

Question 17

What is a condition?

Answer 17

A qualification of a promise that becomes a covenant if it is met. There are three types of conditions: conditions precedent, conditions subsequent, and concurrent conditions.

Question 18

What is a condition precedent?

Answer 18

A condition that requires the occurrence of an event before a party is obligated to perform a duty under a contract.

Question 19

What is a personal satisfaction test?

Answer 19

A subjective test that applies to contracts involving personal taste and comfort.

Question 20

What is the reasonable person test?

Answer 20

An objective that applies to commercial contracts and contracts involving mechanical fitness.

Question 21

What is a condition subsequent?

Answer 21

A condition whose occurrence or nonoccurence of a specific event automatically excuses the performance of an existing contractual duty to perform.

Question 22

What is a concurrent condition?

Answer 22

A condition that exists when the parties to a contract must render performance simultaneously; each party’s absolute duty to perform is conditioned on the other party’s absolute duty to perform.

Question 23

What is implied-in-fact condition?

Answer 23

A condition that can be implied from the circumstances surrounding a contract and the parties’ conduct.

Question 24

What is novation agreement? (novation)

Answer 24

An agreement that substitutes a new party for one of the original contracting parties and relieves the exiting party of liability on the contract.

Question 25

What is the accord and satisfaction?

Answer 25

The settlement of a contract dispute.

Question 26

What is the impossibility of performance?

Answer 26

Nonperformance that is excused if a contract becomes impossible to perform. It must be objective impossibility, not subjective.

Question 27

What is force majeure clause?

Answer 27

A clause in a contract in which the parties specify certain events that will excuse nonperformance.

Question 28

What is a statute of limitations?

Answer 28

A statute that establishes the time period during which a lawsuit must be brought if the lawsuit is not brought within this period, the injured party loses the right to sue.