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MBA511 Chapter 16-22 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. The voluntary transfer of...

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MBA511 Chapter 16-22 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. The voluntary transfer of a contractual right to a third party is known as a(n): a. implied warranty. b. assignment. c. delegation. d. novation. ____ 2. Annette entered into a contract with a local truck dealer to have a new truck delivered to her daughter, Sue, as a graduation present. In this contract, Sue is: a. an incidental beneficiary. b. a donee beneficiary. c. a creditor beneficiary. d. an assignor. ____ 3. Professor Dought has a life insurance policy on his own life that provides that in the event of his death, his mother will receive the proceeds. Professor Dought's mother is a(n): a. incidental beneficiary. b. creditor beneficiary. c. donee beneficiary. d. assignee. ____ 4. Betty owes Agatha $1,000. On March 1 Agatha, for value, assigned the debt to Clara. Thereafter, on March 30 Agatha assigned the same right to Diane. a. Under the American rule, Clara will prevail over Diane. b. Under the English rule, the first assignee to notify Betty will prevail. c. Under the Restatement rule, the first assignee to notify Betty will prevail. d. Both (a) and (b) are correct. ____ 5. Which of the following involves a creditor beneficiary relationship? a. A contract where the insured names a bank with which he has a loan as the beneficiary of a life insurance policy b. A contract between an employer and a union representing the employees, which contract is made for the benefit of the employees c. A contract between the owner of a building and the contractor stating that the contractor will pay his employees at a stated rate d. A contract between a governmental unit and business for services to be rendered to area citizens ____ 6. Odessa owes Kevin $2,000. On July 1, Kevin assigns the right to the $2,000 to Troy. Thereafter, on July 15, Kevin assigns the same right to Donna, who in good faith gives value for it and knows nothing about the first assignee. a. Troy has the right to the payment of $2,000. b. Donna has the right to the $2,000. c. Neither Troy nor Donna can claim the $2,000. d. The rule differs in different states. Depending on which rule a state follows, the answer will vary.
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____ 7. Under Section 2-210 of the Code, unless circumstances indicate to the contrary, a contract that prohibits an assignment: a. prohibits both an assignment of rights and a delegation of duties under the contract. b. prohibits only a delegation of the delegator's duty of performance and not the assignment of rights. c. renders any subsequent assignment ineffective. d. Both (a) and (c). ____ 8. The law governing assignments is found in Articles ____ and ____ of the Uniform Commercial Code (UCC), as well as the common law. a. 1 and 2 b. 2 and 4 c. 2 and 9 d. 3 and 4 ____ 9. A contract contains the provision, “Walter Hamilton promises to pay Faye Weeks $1,200 for a 2003 V-6 mo- tor provided that Phelps’ Garage approves the quality of the motor.” This provision: a. makes the contract unenforceable since Walter’s promise is illusory. b. creates an express condition which must be met before Walter’s duty to pay arises. c. cannot create an express condition because it lacks the necessary words “on condition that.” d. cannot be valid since it makes Walter’s duty to pay dependent upon the opinion of a third party. ____ 10. William has a contract to build a new office building for Angela. The contract contains a provision requiring William to furnish a certificate of occupancy from the building inspector before Angela is required to pay. This provision is: a. an express condition. b. an implied-in-fact condition. c. an implied-in-law condition. d. a condition subsequent. ____ 11. A(n) ____ is a substituted contract that involves an agreement among three parties to substitute a new prom- isee in place of an existing promisee, or to replace an existing promisor with a new one. a. accord b. satisfaction c. novation d. mutual rescission ____ 12. Unless one of the parties contractually assumes the risk, the ____ discharges a contract if supervening circum- stances make fulfillment of the purpose which both parties had in mind impossible. a. bankruptcy law b. frustration of purpose doctrine c. perfect tender rule d. subjective impossibility doctrine ____ 13. Meg has contracted to paint a portrait of Julio, but dies before completing the portrait. Which of the following is correct? a. Meg’s executor must find a capable artist to complete the work to Julio’s satisfaction. b. Meg’s contractual duty is discharged due to objective impossibility. c. A novation must be entered between Julio and a third person in order to discharge Meg’s duty under the contract.
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