Chapter 16 - Chapter 16Third Parties to Contracts...

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Chapter 16—Third Parties to Contracts TRUE/FALSE 1. After an assignment, only the assignee has a right to the obligor's performance. ANS: T PTS: 1 2. The person who makes an assignment is the assignor. ANS: T PTS: 1 3. A gratuitous assignment is always revocable. ANS: F PTS: 1 4. Consideration is required in order to have a valid assignment. ANS: F PTS: 1 5. The general rule is that an assignee stands in the shoes of the assignor. He acquires the rights of the as- signor but no new or additional rights. ANS: T PTS: 1 6. Arthur enters into a contract with Bob as a result of Bob's fraud in the inducement. Under the contract, Bob has the right to the payment of $100. Bob assigns the right to the $100 to Carl. Arthur may not as- sert the defense of fraud in the inducement to avoid paying Carl the $100. ANS: F PTS: 1 7. A gratuitous assignment is generally valid and enforceable. ANS: T PTS: 1 8. The delegation of a duty still leaves the delegator responsible for the performance of the duty. ANS: T PTS: 1 9. An incidental beneficiary has no right to enforce a contract. ANS: T PTS: 1 10. An intended donee beneficiary may enforce the contract only against the promisor. ANS: T PTS: 1 11. In some states, the vesting of a third party's rights occurs only when the third party learns of the con- tract and assents to it. ANS: T PTS: 1
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12. Some states have statutes which prohibit an employee from assigning his future wages. ANS: T PTS: 1 13. A valid assignment requires that notice be given to the obligor. ANS: F PTS: 1 14. An assignor normally guarantees that the obligor will pay the assigned debt. ANS: F PTS: 1 15. Though contractual duties generally are delegable; a delegation will not be permitted if the nature of the duties is personal in that the obligee has a substantial interest in having the delegator perform the contract. ANS: T PTS: 1 16. When the assignee gives consideration in exchange for an assignment, there is a contract between the assignor and the assignee that prevents the assignor from revoking the assignment without the assent of the assignee. ANS: T PTS: 1 17. The right to property other than money, such as goods or land, is not assignable. ANS: F PTS: 1 18. A promisor and a promisee may provide that the benefits under a contract will never vest in a third person. ANS: T PTS: 1 19. In a novation, the delegator is discharged and the third party becomes directly bound upon his promise to the obligee. ANS: T PTS: 1 20. A contract in which a party (the promisor) promises to render a certain performance not to the other party (the promisee) but to a third person (the beneficiary) is called a third party beneficiary contract. ANS: T PTS: 1 21. A creditor beneficiary is a type of incidental beneficiary.
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This note was uploaded on 10/11/2011 for the course BUSINESS A 474 taught by Professor Thompson during the Spring '11 term at Ill. Chicago.

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Chapter 16 - Chapter 16Third Parties to Contracts...

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