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Terms in this set (88)
The voluntary transfer of a contractual right to a third party is known as a(n)
A(n) _________ is a method of discharging contract in which a third party becomes band upon a promise to the obligee
A(n) ______ is a third party who obtains possible benefits but no rights under a contract
A(n) _______ is an intended beneficiary of a contract who receives the benefits of the contract as a gift
Anita owes Brad $75,000. Brad signs a written statement granting Glen a gratuitous assignment of his right from Anita. Brad delivers the signed statement to Glen before Brad dies
The delivery of the statement makes the assignment irrevocable
which of the following duties would not be delegable?
A. John has a contractual duty to pay Isaac $50
B. Karl has a contractual duty to deliver 50 bushels of corn to Michael by October 1
C. Jeffery has a duty to mow Georgia's lawn at least once a week
D. Arthur has a duty to teach an accounting class at a community college during the fall semester
Arthur has a duty to teach an accounting class at a community college during the fall semester
Theresa has a contract to teach eighth grade as Washington Middle School. She decided she could make more money writing a book, so she assigns her teaching contract to her friend, Stephanie, who is also a licensed teacher
A. the duties under the teaching contract are nondelegable
B. duties which Theresa has attempted to delegate are personal in nature
C. if the school district agrees to accept Stephanie's services, a novation would occur, which would relieve Theresa of her obligation to the school district
D. all of the above are correct
all of the above are correct
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 donee beneficiary
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):
Bill wants to buy a new car. He goes to the bank to get a loan for the purchase, and signs an agreement to pay $10.00 per month in premiums on a term life insurance policy which names the bank as a participant of the policy proceeds in the event of his death before the loan is repaid. The bank is a(n)
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
both a and b are correct
courts will enforce contracts for the benefit of all but which of the following?
Bill has a right against Heather and assigns it for $100 to Dan. Later, Bill grants Heather a release. Bill:
is liable to Dan for damages because he breached an implied warranty
Stark enters into a contract with a contractor to build a large shopping mall in River City. Donner will benefit from this contract since his restaurant is adjacent to the planned mall. Donner in this instance is a(n):
the party to whom a contractual duty of performance is owed is known as the:
Mr. Homaver hired Blake Painters to paint his house. Blake decides it has too many jobs and delegates the duties to the Andrews Company. Andrew does a poor job, and drips paint on the Homaver's flowers and windows
Mr Homaver can sue both Blake and Andrews
Mary goes to a stockbroker, purchases 50 shares of a certain stock, and instructs the broker to register the stock in her husband Warren's name. If this stock is intended as a Valentine's Day gift, Warren becomes a(n):
when contract terms prohibit the assignments of rights exist, most courts will
strictly contrue them
which of the following is NOT true concerning the requirements for an effective assignment?
consideration is required
which of the following involves a creditor beneficiary relationship?
a contract where the insured names a bank with which he has a loan as the beneficiary of a life insurance policy
Lynne is the intended beneficiary of a third-party contract. Her rights have vested. In an action by Lynne to enforce the promise, the promisor may assert the defense of
which of the following involves an invalid assignment that a court would not enforce?
an assignment of an automobile liability insurance policy accompanies by the delivery of the policy
which of the following is correct with regard to successive assignments of the same right?
In England, the first assignee to notify the obligor prevails
Noel and Lyle have a contract whereby Noel is to perform routine construction services according to the blueprints that Lyle has provided. Noel assigns the contract to David. As a result of this assignment:
Noel no longer has any rights under the contract, but he remains responsible for the duties he agreed to perform
Brice owns a parcel of land that is encumbered by a mortgage held by the First National Bank. Brice agrees to sell the land to Paul for $50,000. Brice and Paul together go to the First National Bank to discuss the sale and purchase with the banker. Brice, Paul and the banker sign an agreement stating that Paul will assume the mortgage and that Brice will be discharged from all further liability on the mortgage.
the agreement among the three is novation
Anita owes Brad $75,000. Brad signs a written statement granting Carla a gratuitous assignment of his rights from Anita. Brad dies prior to delivering the statement to Carla
the assignment is terminated upon Brad's death
Odessa owes Kevin $2,000. On July 1, Kevin assigns the right to the $2000 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.
the rule differs in different states. Depending on which rule a state follows, the answer will vary
Barbara owes Arturo $2,000. On July 1, Arturo assigns the debt to Charles. Thereafter on July 15, Arturo assigns the same right to Dennis, who in good faith gives value for it and knows nothing about the first assignee. Dennis immediately notifies Barbara of the assignment
Under the English Rule, Dennis has priority
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
C. renders any subsequent assignment ineffective
both a and c:
prohibits both an assignment of rights and a delegation of duties under the contract
renders any subsequent assignment ineffective
notice of an assignment:
cuts off any defenses based on subsequent agreements between the obligor and assignor
precludes subsequent setoffs and counterclaims of the obliger that arise out of entirely separate matters
the law governing assignments is found in Articles _______ and ________ of the Uniform Commercial Code (UCC), as well as the common law.
2 and 9
A gratuitous assignment is rendered irrevocable if, prior to the attempted revocation, the assignee:
receives payment of the claim from the obligor
obtains judgement against the obligor
A contract contains the provision, "Walter Hamilton promises to pay Faye Weeks $1,200 for a 2003 V-6 motor provided that Phelps' Garage approves the quality of the motor." This provision:
Creates an express contract which must be met before Walter's duty to pay arises
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:
an express condition
which of the following is a contract with a condition subsequent
Roger bought a VCR, but he may return the VCR within ten days and get all of his money back
1. An ______ is a substituted contract that involves an agreement among three parties to substitute a new promise in place of an existing promise or to replace an existing promisor with a new one
A(n) ________ is a contract between a promise and a promisor by which the promise agrees to accept and the promisor agrees to render a substituted performance in satisfaction of an existing contractual duty
Which of the following is/are correct with regard to conditions subsequent?
A "sale or return" contract is an example of a subsequent condition
Bill recently borrowed $50 from Ricardo for a couple of weeks. Bill, still short of cash, tells Ricardo, "I will wash and wax you car in exchange for the $50 I owe you." Ricardo tells Bill, "OK that's great!" Ricardo's performance of his new duty will be a(n):
On November 1, Paula and Roberta enter into a contract were both parties are obligated to perform on December 31. On December 1, Paula tells Roberta, "I can in no way, perform my duties in our contract." This statement is a(n):
A and B enter into a contract on January 1 of this year. A's friend C tells A, "The law generally restricts the time within which an action can be brought by either party to a contract." C's statement is:
True, because of statute of limitation
The Code greatly alters the common law doctrine of material breach by adopting what is known as the:
perfect tender rule
Unless one of the parties contractually assumes the risk, the _____ discharges a contract if supervening circumstances make fulfillment of the purpose which both parties had in mind impossible
frustration of purpose doctrine
Meg has contracted to paint a portrait of Julio, but dies before completing the portrait. Which of the following is correct?
Meg's contractual duty is discharged due to objective impossibility
Refusal of a tender of performance by one party to a bilateral contract will:
Be treated as a repudiation, excusing the tendering party from further duty of performance
Conditions may be classified:
By how they are imposed
By when they affect a duty of performance
Which of the following would be considered a material breach of a contract
A. Partial performance that omits some essential part of the contract
B. Delivery of 50 chairs that calls for 100 chairs
C. An intentional breach of contract
D. All of the above would be material breaches
All of the above would be material breaches
Russell promises to pay Marty $1,500 if he will completely landscape Russell's yard. Which of the following would discharge Russell's obligations to pay under this contract?
Marty doesn't want to plant any flowers, shrubs, or grasses
Fred contracts to sell a certain tract of land to Maria for $20,000, but the contract is silent to the time of delivery of the deed and payment of the price
The payment of the $20,000 and the delivery of the deed are mutually dependent and, in the absence of the agreement to the contrary, are concurrent conditions
Phil, the tax accountant, promises to do Marge's individual federal, state, local and gift taxes for the year. He completes all but the gift taxes. Under the substantial performance doctrine:
Marge will have to pay Phil for all but the gift taxes
Henry hires Ace Roofing to put a new roof on his house. When Ace comes, Henry refuses to let them on the roof, saying that we has. A headache doesn't want to listen to pounding. The next day, Henry still has a headache and he refuses to allow them on the roof. The day after, the baby is sleeping and Henry refuses to allow them to work. After four weeks of this, Ace:
May be discharged, but Henry is not
Anita, who is a tailor, agrees to sew a suit for Bryan, who promises in return to pay Anita $500 for the suit if he is satisfied with it. Anita completes the suit, which fits Bryan perfectly. Nevertheless, he says that he is not satisfied and refuses to pay for it. Bryan is honest in his dissatisfaction, but he is unreasonable
Anita has no recourse against Bryan, because she agreed to the subjective standard
Lynn, who is a tailor, agrees to sew a pair of drapes for Zach's living room. Zach promises to pay Lynn $300. Lynn completes the drapes using material selected by Zach, but Zach is not satisfied and refuses to pay for them
Whether Zach will have to pay for the drapes depends on whether as a reasonable man he ought to be satisfied
Jim contracted with Kevin to serve as a guide for Kevin on his three-week fishing trip to Canada. The contract was made on April 1 with the trip tp begin on June1. On May 1, Kevin notified Jim that he had changed his mind and would be unable to make the trip. He also refused to pay Jim any compensation
Kevin has anticipatorily repudiated the contract and is liable to Jim for damages.
Jim is discharged from his duty as a service guide, and he may bring suit immediately against Kevin
Miller has a contract to sell $1,000 bushels of wheat to a bakery. The wheat is stored in a grain elevatory and has become infested with insects. What is the consequence?
Miller is not discharged from performance, but must substitute wheat or pay damages to the bakery for breach of contract
Arnold and Doug make a contract for Arnold to manufacture five leather chairs of a specified design. Prior to their manufacture, the factory is destroyed in an accidental fire that is no one's fault. The chairs are available from other sources.
Arnold's duty to deliver the chairs is discharged by the destruction of the factory
1. Louis agreed to provide all the apples that Cindy's Cider Mill will need at $3 per bushel unless weather conditions require additional labor to be hired. The rate would then need to be $3.50 per bushel. A freeze warning required Louis to hire 100 additional overtime workers, raising the cost per bushel to be $4.75. Louis wants to get out of his contract. Can he?
No, the parties expected the hardship and provided for in it in their contract
Janice contracts to sell for a certain tract of land for Anthony for $5,000, but the contract does not state a time for delivery of the deed and payment of the price. In this situation:
Courts will treat the promises to deliver the deed and to pay the $5,000 as mutually dependent. Anthony's duty to pay is conditioned upon Janice's delivery of the deed and Janice's duty to deliver the deed is conditioned upon Anthony's payment or tender of $5,000 to Janice
Which of the following generally is not grounds for discharge of a contract by operation of law?
Running of the statute of limitations
the usual remedy for breach of contract is
If Jana, a minor, transfers property to Scott and Scott sells the property to a good faith purchaser for value before Jana avoids the transfer
Jana loses the right to recover property if the transfer involved goods
Miller made a contract to sell his condominium to Jefferson for $80,000. Two days later Miller changed his mind after discovering that he could have sold the property to another buyer for an additional $20,000. Jefferson sues and asks the court to have the property conveyed to him at the price of $80,000. Jefferson is seeking
a contractor and Buckingham, INC have a contract, which calls for the contractor to build a building with the completion of it by June 15. If the building is not completed by that date, the contract calls for the contractor to pay $100 per day in damages. The $100 per day is:
Garrett ordered 100 pieces of 2'6 lumber from his supplier and paid upon delivery. Later, when he unpacked the lumber, he discovered that the supplier had delivered 2'4 lumber. After being notified, the supplier picked up the lumber, apologized, and gave Garrett his money back. The response the supplier made to rectify the breach is:
none of the above
when an injured party is required to elect remedies, which of the following would be mutually exclusive?
specific performance and restitution
the return to the aggrieved party of the consideration, or its value, which he gave to the other party is:
the process whereby a court "rewrites" or "corrects" a written contract to make it conform to the true intentions of the parties is:
the majority of states follow the ______ rule in awarding damages for fraud
benefit of the bargain
equitable remedies will not be granted where
the contract is tainted with fraud, duress, undue influence, mistake, or unfair practices
David enters into a contract to give Edward the right of first refusal to purchase a tract of land owned by David. David subsequently offers the land to Fred without first offering it to Edward. An appropriate remedy for Edward to seek would be:
A power of avoidance held by a party may be lost if:
A. the contract is affirmed
B. there are reasonable delays in exercising the power
C. the rights of third parties intervene
D. all of the above
all of the above
In which of the following situations is restitution available as a remedy?
A. as an alternative remedy for a party injured by breach
B. for a party in default
C. for a party who may not enforce the contract because of the statute of frauds
D. all of the above are situations where restitution is available
all of the above are situations where restitution is available
damages for reliance include expenses for
preparing to perform
In the case of Hadley v. Baxendale, the plaintiff was seeking damages for
which of the following is correct with respect to election of remedies?
A. the code rejects any doctrine made of election of remedies; its remedies are cumulative
B. the remedy of specific performance is inconsistent with that of restitution
C. a person who seeks an injunction may also seek incidental damages for the breach
D. all of the above are correct
all of the above are correct
in which of the following situations will a court grant specific performance
in a case involving breach of contract for the sale of real property
where goods are unique or rare
Restitution is available when:
restitution is available in all of these cases
contract damages that put the injured party in as good a position as if the other party has performed are:
Barbara, an antique dealer, intentionally represents the value of an antique chest of drawers, as $6,000 when she has reason to know the value is considerably less. Margaret agrees to buy it for $5,500. It is worth $2,500. In a state that uses the "benefit-of-the-bargain" rule, Margaret's damage award would be:
a small damage amount fixed without regard to the amount of loss is known as:
Carolyn agrees to sell Marianne an antique handmade lace tablecloth for $1,500. When Carolyn discovers that her cousin wants it too, she breaks the contract with Marianne. Marianne can ask the court to order:
Bartow signed a contract to coach baseball for Washington high for a period of three years. After two years he is offered and accepts an assistant coach position at State University. Contract law will NOT allow Washington High to ask for:
Vladimir entered into a contract to buy Daniel's collection of rare stamps. Vladimir mailed payment of $10,000 for the stamps to Daniel, but now Daniel tells Vladimir, "I'll never part with these stamps". Are the following remedies available to Vladimir?
Specific Performance: Yes
Lynn agrees to buy Harriette's farm for $100,000 and puts $20,000 down. Then Lynne learns she is allergic to hay and repudiates the contract. If Harriette can sell the farm one month later for $90,000, she may:
keep $10,000 of Lynne's down payment
Howard needs a truck to pull a 2,000 pound trailer. Gordon tells Howard, "My truck will pull a 2,000 pound trailer with ease. Relying on Gordon's statement Howard buys the truck, but it will not pull a 2,000 pound trailer. If Gordon did not intend to deceive and Howard sues for nonfraudulent misrepresentation, he can recover:
out-of-pocket and consequential damages, but not punitive damages
Harry said to Marge, "I have a ring once worn by Marilyn Monroe. Would you like to buy it for $500?" Marge pays for the ring but the next day a friend tells her that Harry had recently purchased the ring at a local department store. Marge enjoys wearing the ring and wears it constantly for twelve months. Finally, she goes to Harry and says, "Here is the ring you lied about. Give me my $500." Most likely:
Marge will not get her money back since she has affirmed the contract by taking an unduly long time to disaffirm
Busby contracts to build a house for Cornell. Busby finishes approximately half of the house and quits. Cornell files suit against Busby. Which remedy will not be available to her?
What Article under the UCC governs the sale of goods?
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