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Exam 17: Third Party Rights

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Question 21

Multiple Choice

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Illya owes Jenny $1,000. In a separate deal, Kasey owes Illya $1,000. Illya unconditionally assigns his rights in the deal with Kasey to Jenny. Illya's right to the $1,000 is then

A) unchanged.
B) extinguished.
C) incidental.
D) assigned to a court.

E) B) and D)
F) C) and D)

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Question 22

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A transfer of contract duties to a third party is an assignment.

A) True
B) False

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Question 23

True/False

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A life insurance contract involves an intended beneficiary.

In most cases, a contract that prohibits its assignment cannot be assigned.

Bobbie enters into a contract with Claire, who agrees to paint Bobbie's studio apartment for $500. Claire is the

Greensward Landscaping Company enters into a contract with Kent to landscape Hillview Country Club's golf course, using Intown Nursery to supply trees and shrubbery. Jonas owns a lot next to Hillview's course that will benefit from the improved landscaping. The landscaping is a gift from Kent, a wealthy club member, to Hillview. What type of beneficiary is Hillview? What type of beneficiary is Jonas? What type of bene?ficiary is Intown Nursery? If Greensward refuses to do the job, who can en?force the contract against it?

An assignee has a right to demand performance from the obligor.

An incidental third party beneficiary cannot sue to enforce the contract because the benefit is unintentional.

No contract can prohibit delegation of the duties of the contract.

Leon contracts to install automatic watering troughs in Kendall's dairy barn. Leon then becomes seriously ill and contracts with Jake to install the troughs. Jake is unreliable and never shows up to install the troughs. Kendall can sue

Mai is a third party beneficiary under a contract between Novia and Otis. Novia and Otis can modify or rescind their contract without Mai's consent

Banks may not assign their loan contracts to other firms.

Fact Pattern 17-B1 (Questions B15-B18 apply) Able Contractors, Inc., enters into a contract with Beau to repair, rebuild, and remodel Coastal Marina & Boardwalk, using products from Delta Lumber & Marine. Eatwell Café is next to Coastal Marina. -Refer to Fact Pattern 17-B1. Halfway through the project, Able Contractors refuses to finish the job. The contract can be enforced against Able Contractors by

Expressly designating a third party as a beneficiary in a contract does not indicate whether the beneficiary is intended or incidental.

App Developers, Inc. (ADI) , enters into a contract with Carmen, the chief executive officer of SalesCorp, to create an app for the firm. To fulfill the contract, ADI hires Max and ten other student interns. With respect to the contract, Max is

An assignee's rights are subject to the defenses that the obligor has against the assignor.

Animal Feed Corporation and Beneficial Trucking, Inc., enter into a contract for Beneficial to transport a truckload of hay for which Animal Feed agrees to pay. Due to schedule conflicts, Beneficial contacts Crop Transport Company, to which Beneficial "assigns all rights under the contract." This transfer is

Without exception, any duty can be delegated.

Intended beneficiaries can sue to enforce a contract.

It is legally necessary to notify the obligor of any assignment of rights to a third party.