Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A)   extinguish the contract rights of the assignor.
B)   demand performance of the deal from any of the original parties.
C)   enforce the payment in court.
D)   none of the choices.E) A) and D)
F) B) and D)

Question 3

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 National Credit Corporation. When the buyer discovers the fraud, the firm returns the equipment and cancels their contract. Laminate

Accepted Answer

A)   must pay the entire contract price to National Credit.
B)   need not pay any of the contract price to National Credit.
C)   must reimburse National Credit for costs with respect to the assignment.
D)   must pay a prorated amount of the contract price to National Credit.E) None of the above
F) C) and D)

Question 4

Music Masters Inc. enters into a contract to pay Nagi for a dozen original songs. Nagi transfers the right to payment under the contract to Omni Artists. After the transfer, Nagi's contract right to the payment is

Accepted Answer

A)   unaffected.
B)   extinguished.
C)   conditional.
D)   secondary.E) A) and D)
F) A) and C)

Question 5

In most states, the assignment of ownership rights in real estate cannot be prohibited because that would be contrary to public policy.

Accepted Answer

A) True 
 B)False

Question 6

To create a valid delegation of duties requires

Accepted Answer

A)   a special form.
B)   the delegator's expressed intent to make the delegation.
C)   the delegator's use of the word delegate.
D)   none of the choices.E) None of the above
F) A) and B)

Question 7

Once the obligor receives proper notice, only performance to the assignee can discharge the obligor's obligation.

Accepted Answer

A) True 
 B)False

Question 8

Elin owes Floyd $10,000. Floyd assigns the claim to Gary. Gary does not notify Elin of the assignment. Later, Floyd assigns the same claim to Holly. Holly immediately notifies Elin of the assignment. Holly has priority to payment in

Accepted Answer

A)   all states.
B)   states that follow the English rule.
C)   no state.
D)   most states.E) A) and D)
F) B) and D)

Question 9

Under a contract, an assignment of negotiable instruments

Accepted Answer

A)   cannot be prohibited.
B)   can be prohibited only by an anti-assignment clause.
C)   can be prohibited only by the obligor.
D)   is prohibited under any circumstances.E) A) and B)
F) B) and C)

Question 10

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.

Accepted Answer

A) True 
 B)False

Question 11

Beck and Cary enter into a contract under which Beck agrees to cater Cary's wedding. The contract expressly prohibits any transfer of rights without the assignee's consent. Cary may transfer the right to receive Beck's services to her sister Dian

Accepted Answer

A)   if Beck consents.
B)   if Cary decides to use a different caterer.
C)   if Dian is also getting married.
D)   under no circumstances.E) A) and D)
F) A) and C)

Question 12

Under an assignment of "all rights" on a contract, the assignor is absolved from any liability for performance under the contract.

Accepted Answer

A) True 
 B)False

Exam 18: Third Party Rights

Correct Answer
verified

Once the obligor receives proper notice, only performance to the assignee can discharge the obligor's obligation.

Correct Answer
verified

Music Masters Inc. enters into a contract to pay Nagi for a dozen original songs. Nagi transfers the right to payment under the contract to Omni Artists. After the transfer, Nagi's contract right to the payment is

Correct Answer
verified

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

Correct Answer
verified

Under an assignment of "all rights" on a contract, the assignor is absolved from any liability for performance under the contract.

Correct Answer
verified

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

Correct Answer
verified

In most states, the assignment of ownership rights in real estate cannot be prohibited because that would be contrary to public policy.

Correct Answer
verified

Under a contract, an assignment of negotiable instruments

Correct Answer
verified

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.

Correct Answer
verified

To create a valid delegation of duties requires

Correct Answer
verified

Beck and Cary enter into a contract under which Beck agrees to cater Cary's wedding. The contract expressly prohibits any transfer of rights without the assignee's consent. Cary may transfer the right to receive Beck's services to her sister Dian

Correct Answer
verified

Elin owes Floyd $10,000. Floyd assigns the claim to Gary. Gary does not notify Elin of the assignment. Later, Floyd assigns the same claim to Holly. Holly immediately notifies Elin of the assignment. Holly has priority to payment in

Correct Answer
verified

Exam 18: Third Party Rights

Correct AnswerverifiedShow Answer

Once the obligor receives proper notice, only performance to the assignee can discharge the obligor's obligation.

Correct AnswerverifiedShow Answer

Music Masters Inc. enters into a contract to pay Nagi for a dozen original songs. Nagi transfers the right to payment under the contract to Omni Artists. After the transfer, Nagi's contract right to the payment is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Under an assignment of "all rights" on a contract, the assignor is absolved from any liability for performance under the contract.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In most states, the assignment of ownership rights in real estate cannot be prohibited because that would be contrary to public policy.

Correct AnswerverifiedShow Answer

Under a contract, an assignment of negotiable instruments

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

To create a valid delegation of duties requires

Correct AnswerverifiedShow Answer

Beck and Cary enter into a contract under which Beck agrees to cater Cary's wedding. The contract expressly prohibits any transfer of rights without the assignee's consent. Cary may transfer the right to receive Beck's services to her sister Dian

Correct AnswerverifiedShow Answer

Elin owes Floyd $10,000. Floyd assigns the claim to Gary. Gary does not notify Elin of the assignment. Later, Floyd assigns the same claim to Holly. Holly immediately notifies Elin of the assignment. Holly has priority to payment in

Correct AnswerverifiedShow Answer

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