Chap013 - Chapter 013 Operation of Contracts Student 1 When...

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Chapter 013 : Operation of Contracts Student: ___________________________________________________________________________ 1. When rights or duties that arise from a contract are legally transferred to a third party, such contracts are an exception to the general rule that only the parties to a contract have rights and duties under it. BT: Knowledge PO: 1 True False 2. A third-party beneficiary to a contract has no legal right to the benefits resulting from the contract. BT: Knowledge PO: 2 True False 3. A life insurance policy is an example of a third-party contract. BT: Knowledge PO: 2 True False 4. An incidental beneficiary is one who may benefit as a direct consequence of contract. BT: Knowledge PO: 2 True False 5. An incidental beneficiary has a legal right to benefits resulting from a contract. BT: Knowledge PO: 2 True False
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6. The person who transfers his or her rights is known as the assignor; the third party to whom the rights are transferred is known as the assignee. BT: Knowledge PO: 3 True False 7. A person who agrees in a contract to perform a particular task may generally delegate this task to someone else, and cannot be held responsible for getting it done. BT: Knowledge PO: 3 True False 8. An assignment must always be in writing. BT: Knowledge PO: 3 True False 9. A contract may prohibit just one party from assigning or delegating. BT: Knowledge PO: 4 True False 10. Members of the armed services are permitted to assign their pay. BT: Knowledge PO: 4 True False 11. For personal service contracts, parties may transfer their rights but never their duties. BT: Knowledge PO: 4 True False 12. Personal-service contracts may be assigned. BT: Knowledge PO: 4 True False
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13. Even employment contracts may be assigned if there is no relationship of trust or confidence, or any other circumstance that would create a materially greater burden on the party whose services are being assigned. BT: Knowledge PO: 5 True False 14. Personal service contracts are automatically assigned at the time of death. BT: Knowledge PO: 6 True False 15. If the third party enters the contract as a result of a novation, the party whose rights or duties are assumed is completely relieved of obligations. BT: Knowledge PO: 7 True False 16. Third parties to a contract are those who are not a party to the contract but who: A. are witnesses to a contract. B. are affected by it. C. are part of a contract of three persons. D. always have rights under the contract. 17. A person who is not a party to a contact but is intended by the contracting parties to benefit as a consequence of a contract is termed a(n): A. third party beneficiary. B. incidental beneficiary. C. official receiver.
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This note was uploaded on 09/25/2011 for the course GENB 4350 taught by Professor Louis during the Spring '11 term at Houston Baptist.

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Chap013 - Chapter 013 Operation of Contracts Student 1 When...

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