Chapter 15

Question 1

Privity of contract

Answer 1

The relationship between the parties to a contract

Question 2

Third parties

Answer 2

do not acquire any rights under other people’s contract unless the person enforcing the contract is a:
Assignee to whom rights are subsequently transferred
Intended third-party beneficiary

Question 3

obligor

Answer 3

A party who owes a duty of performance under a contract

Question 4

obligee

Answer 4

A party who is owed a right under a contract

Question 5

assignor

Answer 5

An obligee who transfers a right

Question 6

Assignee

Answer 6

The party to whom a right is transferred

Question 7

Rights that cannot be assigned

Answer 7

Personal service contract
Assignment of a future right
Contract where an assignment would materially alter the risk
Assignment of a legal action

Question 8

Notice of Assignment

Answer 8

To protect his or her rights, the assignee should immediately notify the obligor that:
The assignment has been made, and
Performance must be rendered to the assignee

Question 9

Anti-Assignment Clause

Answer 9

Prohibits assignment of rights under the contract

Question 10

Approval clause

Answer 10

Permits the assignment of the contract only upon receipt of an obligor’s approval

Question 11

Delegation of duties

Answer 11

Transfer of contractual duties by the obligor to another party for performance

Question 12

Duties that cannot be delagated

Answer 12

Personal service contracts calling for the exercise of personal skills, discretion, or expertise
Contracts whose performance would materially vary if duties were delegated

Question 13

duties that can be delegated

Answer 13

Duties performed by qualified employees

Question 14

Intended beneficiary

Answer 14

Third party who is not in privity of a contract but who has rights and can enforce the contract against the promisor

Question 15

Donee beneficiary

Answer 15

Third party on whom a benefit is to be conferred

Question 16

Creditor beneficiary

Answer 16

Original creditor who becomes a beneficiary under the debtor’s new contract with another party

Question 17

Covenant

Answer 17

An unconditional promise to perform

Question 18

Condition

Answer 18

A qualified or conditional promise that becomes a covenant if met

Question 19

Condition precedent

Answer 19

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

Question 20

Personal satisfaction test

Answer 20

Subjective test that applies to contracts involving personal taste and comfort

Question 21

Reasonable person test

Answer 21

Objective test that applies to commercial contracts and contracts involving mechanical fitness

Question 22

Conditions subsequent

Answer 22

Condition whose occurrence or nonoccurrence of a specific event automatically excuses the performance of an existing contractual duty to perform

Question 23

Concurrent conditions

Answer 23

Condition that exists when the parties to a contract must render performance simultaneously

Question 24

Discharge by agreement

Answer 24

The parties mutually agree to discharge or end their contractual duties through various methods

Question 25

Accord and satisfaction

Answer 25

Settlement of a contract dispute

Question 26

Objective impossibility

Answer 26

Nonperformance that is excused if a contract becomes impossible to perform

Question 27

Force majeure clause

Answer 27

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

Question 28

Statute of limitations

Answer 28

A statute that establishes the time period during which a lawsuit must be brought