Chapter 16 Blaw

Carl, a contractor, and Lyle, a landowner, have a contract whereby Carl is to perform routine construction services according to the blueprints that Lyle has provided. Carl assigns the contract including, Carl's rights and duties under the contract, to David, a developer. As a result of this assignment: Assume that Carl's services are NOT personal to Carl. A. Carl no longer has any rights under the contract, but he remains responsible for the duties he agreed to perform. B. Carl has no more rights or duties with regard to the contract. C. Carl has all of his rights under the contract, but he has no responsibility for the performance of the duties. D.Carl has all of his rights under the contract and he is still responsible for the performance of the duties.

A

Harold hired Blake Painters to paint his house. Blake decides he has too many jobs and delegates the duties to the Andrews Company. If Andrews does a poor job, and drips paint on Harold's flowers and windows, Harold: A. can sue both Blake and Andrews. B. cannot sue, because he has accepted the benefits of the assignment. C. can sue Blake, but he cannot sue Andrews. D. can sue Andrews, but he cannot sue Blake.

A

Match the description of a third party with the property type of third party beneficiary. The doctor, when an automobile accident policy states that the insurance company will reimburse the insured for medical expenses incurred as a result of an automobile accident. A. incidental beneficiary B. Donnee Beneficiary C. Creditor Beneficiary

A

Olson, as buyer, entered into a real estate purchase contract with Sam, as seller. The real estate purchase contract contained the following clause, "No party to this contract may assign this contract and/or their rights arising hereunder, without the prior written consent of the other party." Olson assigns the contract to Nancy. What is the most likely outcome? A. Sam will have to sell the property to Nancy, but Sam may sue Olson for breach of contract. B. Sam will not have to sell the property to Nancy or Olson. C. Sam will have to sell the property to Nancy and cannot file a breach of contract claim against Olson. D. Sam will have to sell the property to only Olson, since assignment was prohibited.

A

Which of the following statements is FALSE? A. After an effective assignment of rights, both the assignor and the assignee have a right to the obligor's performance. B. Contract rights are generally assignable. C. After an effective assignment of rights, only the assignee may enforce those rights against the obligor. D. An assignment that is without consideration is revocable by the assignor.

A

Which one of the following assignments would probably be prohibited by a court? A. Mary has been a loyal customer of Best Buy for 20 years. In exchange for her loyalty, Best Buy gives Mary free shipping and a 20% discount for life. Mary assigns these loyalty rights to John for $50. B. John is a house painter. He is scheduled to paint Molly's home on Monday. John wakes up Monday morning with a stiff neck. He calls Ed, who is also a painter, to begin the job at Molly's. C. Ron has a contract with Bonett Bank to service their coffee machines. He assigns the remainder of his contract with Bonett to Michelle, who also owns a coffee service. D. All of these

A

Which one of the following assignments would probably be prohibited by a court? A. Stanley and Bob have entered into an agreement whereby Bob agrees to provide Stanley will all of Stanley's requirements for cleaning materials. Stanley's business has one location and is only 3,000 square feet. Stanley assigns this contract to Susan, who has five locations, each over 10,000 square feet. B. A owes B $50. B assigns to C the right to collect the money. C. Paul assigns a real estate purchase agreement to Connie. D. Jeremy assigns the leases from his apartment complex to the bank.

A

Darrell owns a parcel of land that he purchased by obtaining a loan from the First National Bank, and the loan has not been paid off yet. Darrell agrees to sell the land to Paul for $50,000. Darrell and Paul together go to the First National Bank to discuss the sale and purchase with the banker. Darrell, Paul, and the banker sign an agreement stating that Paul will assume the mortgage and that Darrell will be discharged from all further liability on the mortgage. In this case: A. the bank can collect from Darrell if Paul defaults. B. the agreement among the three is a novation. C. the bank is a third party donee beneficiary. D. Darrell is a third party beneficiary of the agreement between Paul and the bank.

B

Match the description of a third party with the property type of third party beneficiary. Veronica entered into a contract with a local car dealer to have a new convertible sports car delivered to her daughter, Jasmine, as a college graduation present. In this contract, Jasmine is a A. incidental beneficiary B. Donnee Beneficiary C. Creditor Beneficiary

B

Will wants to buy a new car. He goes to the bank to get a loan for the purchase, and signs an agreement to pay $10 per month in premiums on a term life insurance policy which names the bank as the recipient of the policy proceeds in the event of his death before the loan is repaid. The bank is a(n): A. incidental beneficiary. B. creditor beneficiary. C. donee beneficiary. D. assignee

B

Match the description of a third party with the property type of third party beneficiary. Buster owns a company and obtains a loan from Bank. Buster sells his company to David and David agrees to assume the debt the company owes to the Bank. The Bank is a A. incidental beneficiary B. Donnee Beneficiary C. Creditor Beneficiary

C

Presume Elon Musk entered into a contract to speak at Harvard's graduation ceremony for a fee of $100,000. Elon's intent is to donate the fee to a non-profit for the beneift of young children. Which statements is/are FALSE? A. If the contract did not specifically prohibit assignment, then Mr. Mush could assign the right to receive payment and delegate the duty to speak without being in breach of the contract. B. The non-profit would be a donee beneficiary and could sue Mr. Musk for breach of contract if he did not speak as agreed. C. All of these statements are FALSE. D. Mr. Musk could assign the entire contract to another speaker if he had a scheduling conflict and NOT be in breach of his contract with Harvard.

C

In which of the following situations would the assignment by the Assignor to an Assignee be effective? A. Little Bear Corp. enters into a contract to buy all of their requirements for water from Bluebonnet Water Supply for a 1 year period. Bear is a manufacturer and uses around 10,000 gallons a month in their manufacturing process. Two months after entering into the contract with Bluebonnet, Bear goes out of business and assigns Bear's rights under the Bluebonnet contract to Big Bear Corp. who uses around 50,000 gallons a month. B. Marigold Corp. receives a loyalty discount on Marigold's purchases of flowers from Bruiser Inc. under a contract that expires in 6 months. Marigold buys in bulk and has been a loyal and paying customer of Bruiser for 10 years. Marigold no longer needs to buy flowers, but wants to take advantage of the pricing under the Bruiser contract. Marigold assigns the contract with Bruiser to Daisy Inc. who has never done business with Bruiser. C. John assigns a contract to Natalie. The contract contains the following provision: "This contract and the rights that arise hereunder shall not be assigned without the prior written consent of the other party and any attempted assignment shall be void." D. John assigns a contract to Natalie. The contract contains the following provision: "This contract shall not be assigned without the prior written consent of the other party."

D

Mindy goes to her broker, purchases 300 shares of Apple stock, and instructs the broker to register the stock in her husband Jim's name. The stock is intended as a Christmas gift from Mindy to Jim. Related to the contract between Mindy and her broker, Jim becomes: A. an incidental third party beneficiary B. an assignee C. an intended creditor third party beneficiary D. an intended donee third party beneficiary

D

Owen was the owner of a shopping mall encumbered by a mortgage securing Owen's promissory note to BigBank. Paul purchased the building that was subject to BigBank's mortgage. As a result of the sale to Paul: A. Owen was automatically released from any liability on the note. B. BigBank is a third party creditor beneficiary. C. Paul is liable to BigBank for any deficiency resulting from a default note. D. BigBank is not a third party creditor beneficiary.

D

Which of the following duties would be most likely to not be delegable? A. John has a contractual duty to pay Isaac $50. B. Karl has a contractual duty to deliver 50 bushels of corn to Michael by October 1. C. Jeffrey has a duty to mow Georgia's lawn at least once a week. D. Arthur has a duty to teach an accounting class at a community college during the fall semester.

D