Chapter 17 Book set Flashcards
Retail LLC contracts with Paving Inc. to grade and pave a parking lot. The contract provides that it cannot be assigned without Retail’s consent. Later, Paving assigns the contract to Roadwork Company without obtaining Retail’s consent. Retail could most successfully argue that the contract cannot be assigned because
the contract prohibits assignment.
Ira owes Jess $1,000. Kerr owes Ira $1,000. Ira unconditionally assigns to Jess the right to Kerr’s payment. Jess’s right to the $1,000 is subject to the defenses that
Kerr had against Ira
As a general rule, any duty can be delegated.
True
A creditor beneficiary cannot sue a promisor directly to enforce a contract.
False
In most states, the assignment of ownership rights in real estate cannot be prohibited because that would be contrary to public policy.
True
A bank’s sale of its right to receive payment on a loan to a third party is a transfer but not an assignment.
False
In a contract for a sale of goods, the right to receive payment on an account may be assigned unless the sales contract prohibits such an assignment.
False
Following a transfer by a lender of a right to receive payments on a mortgage, the homebuyer must continue to make those payments to the original lender.
False
A contracting party’s transfer of the contract rights or duties to another person is an exception to the rule of privity of contract.
True
Once the obligor receives proper notice, only performance to the assignee can discharge the obligor’s obligation.
True
Under an assignment of “all rights” on a contract, the assignor is absolved from any liability for performance under the contract.
False
An insurance policy cannot be assigned if the assignment will significantly alter the risks to, or the duties of, the insurer.
True
Personal services are unique to the person rendering them, but the right to receive those services is not and can therefore be assigned.
False
On an assignment to a loan broker by an auto dealer of the payments due on an auto loan, the broker obtains only those rights that the dealer originally had.
True
A surgeon can delegate his or her contractual duty to operate on a certain patient because the rendering of medical services is not personal performance.
False
On a delegation of contract duties, the delegator is absolved from any liability for performance under the contract.
False
An obligee can legally refuse performance from a delegatee only if the duty delegated is one that cannot be delegated.
True
Beau borrows $15,000 from Credit Center to buy a car. The lender assigns the right to receive the loan payments to Debt Collections Inc. If Beau does not pay the debt, the assignee can
enforce the payment in court.
The rights under a contract for personal services can normally be assigned
if all that remains on the deal is a payment of money.
When the original parties to a contract agree that its performance should directly benefit a third party, that party can sue the promisor directly for breach.
True
Until the obligor has notice of assignment, the obligor can discharge his or her obligation by performance to any party.
False
If a statute expressly prohibits assignment, the particular right in question cannot be assigned.
True
An investor cannot effectively object to the delegation of the selection of his or her investments under a contract with one financial advisor to another.
False
In a state in which a statute prohibits an employee from assigning the right to receive workers’ compensation benefits, the employee can assign the right
under no circumstances
Music Masters Inc. enters into a contract to pay Nag for a dozen original songs. Nag transfers the right to payment under the contract to Omni Artists. After the transfer, Nag’s contract right to the payment is
extinguished
An accountant can delegate his or her contractual duty to another accountant, even if the contract expressly prohibits it, because accounting is a delegable skill.
False
After a transfer to a creditor by an investor of a right to receive payments on a business loan, the creditor can demand those payments from the borrower.
True
Rendering contract performance directly to a third party does not indicate whether that party is an incidental or an intended beneficiary.
False
No special form is required to make a delegation of duties—as long as the delegator expresses an intention to make the delegation, it is effective.
True
Fez makes and sells camping gear. Fez and Gobi enter into a contract for a delivery of the gear to Gobi’s Outfitters retail locations for an invoiced price. Fez transfers the right to payment under the contract to Haulers Distribution Inc. This transfer is
an assignment
If a contract stipulates that it cannot be assigned, then it cannot be assigned unless the assignment
involves ownership rights in real estate.
The rights under an insurance policy can normally be assigned
if the assignment involves only a payment of benefits
Privity of contract establishes the basic principle that contracting parties have a right to privacy in the information expressed in their contracts.
False
A transfer of contract rights to a third party is an incidental benefit.
False
If it were not possible to assign contract rights, many businesses could not continue to operate.
True
Jan is obligated under a contract to pay Katie $500. Katie assigns the right to receive the funds to Loren. If Jan does not pay the debt, the obligee can
enforce the payment in court.
An incidental third party beneficiary cannot sue to enforce the contract because the benefit is unintentional.
True
Lau enters into a contract to mow Macy’s yard every week for the summer. Macy sells her house and yard to Nona, and assigns the right to receive Lau’s services to Nora. Macy is
the assignor.
The unconditional assignment of rights under a contract extinguishes any defenses that the obligor had against the assignor.
False
The unconditional assignment of rights under a contract extinguishes the rights of the assignee.
False
Steel Mill Inc. and Transport Delivery LLC enter into a contract. UniOil Corporation will indirectly benefit from the deal. Under the principle of privity, UniOil has the right to
none of the choices
* sue Steel Mill for breach
* require Transport to perform
* demand performance from both original parties
Laminate LLC agrees to buy factory equipment from Metalwork Company on the seller’s misrepresentation that it meets certain specifications. Metalwork assigns the right to payment on the deal to Nations Credit Corporation. When the buyer discovers the fraud, the firm returns the equipment and cancels their contract. Laminate
need not pay any of the contract price to Nations Credit.
Expressly designating a third party as a beneficiary in a contract indicates that the beneficiary is intended.
True
A debt collector who is delegated the right to payments on a student loan owes no obligation to the debtor arising under the original terms of the loan.
False
Beck and Call enter into a contract under which Beck agrees to cater Call’s wedding. The contract expressly prohibits any transfer of rights without the assignee’s consent. Call may transfer the right to receive Beck’s services to Dion
if Beck consents
The assignment of the same contract right to two different persons creates parallel and equal rights and obligations.
False
Any beneficiary to a contract who is not deemed an intended beneficiary is an incidental beneficiary.
True
A third party’s right to control the details of performance of a contract indicates that the third party is an intended beneficiary.
True
Marlo and Nita enter into a contract for the sale of Marlo’s apartment for which Nita agrees to pay $250,000. Nita assigns her right to buy the apartment to Owen. Owen is
the assignee
When the performance of a contract depends on the personal skill of the obligor, a delegation of the duty is prohibited.
True
