Chapter 18 Third Party Rights Quiz

  1. Billy Bob has purchased the right to hunt on Willy Bob's land. Billy Bob makes an oral agreement to assign his rights to hunt on the land this fall to his mother, Millie Bob. Is this assignment valid?

a. yes, because all assignments may be oral
b. yes, because this assignment will take place this year
c. yes, because this assignment does not involve wages or worker's compensation
d. no

2. Amanda is Billy's Landlord, and collects $750 per month rent from him. She feels sorry for Matt, a struggling medical student, and decides to assign her rights to receive Billy's rent to Matt. No one notifies Billy of the assignment. Is this a valid assignment?

a. no, because Matt did not give consideration
b. no, because it lacks a legal purpose
c. no, because Billy was not notified
d. yes

3. Fran goes to buy a used car from "Honest Pete." Pete pulls a gun on her in his office and forces her to sign a contract in which she agrees to buy a 1976 Pinto for $5,000. (The car's fair market value is $200). Later, Pete assigns his rights to receive the $5,000 to his friend Jake. Which term accurately describes Fran?

a. obligor
b. obligee
c. assignor
d. assignee

4. Al, Bill, and Carl live next door to each other. Al decides to leave town for the month of March on vacation. He makes a contract with Bill, in which he will pay $100 and Bill will mow his yard once a week while he is gone. After Al leaves, Bill mows the lawn once, then becomes more interested in the NCAA basketball tournament on TV. The shaggy lawn annoys Carl, and when Al returns he refuses to pay Bill any money. Who has established privity of contract?

a. Al only
b. Bill only
c. Al and Bill
d. Al, Bill, and Carl

5. Al, Bill, and Carl live next door to each other. Al decides to leave town for the month of March on vacation. He makes a contract with Bill, in which he will pay $100 and Bill will mow his yard once a week while he is gone. After Al leaves, Bill mows the lawn once, then becomes more interested in the NCAA basketball tournament on TV. The shaggy lawn annoys Carl, and when Al returns he refuses to pay Bill any money. Under general contract law, who has standing to sue under this contract?

a. Al only
b. Bill only
c. Al and Bill
d. Al, Bill, and Carl

6. Fran goes to buy a used car from "Honest Pete." Pete pulls a gun on her in his office and forces her to sign a contract in which she agrees to buy a 1976 Pinto for $5,000. (The car's fair market value is $200). Later, Pete assigns his rights to receive the $5,000 to his friend Jake. Jake goes to court to try to collect the $5,000 from Fran. She raises the defense of duress. How much money will Jake be able to recover from Fran?

a. $5,000
b. $4,500
c. $500
d. $0

7. Amanda is Billy's landlord. Billy and Amanda's contract says "Amanda shall not assign her rights to Billy's payments." Amanda assigns her rights to the payments to Matt. Is the assignment valid?

a. no, because Matt did not give consideration
b. no, because the contract expressly prohibits assignments
c. no, because Billy was not notified
d. yes

8. Out of the goodness of her heart, Amanda assigns rights to receive monthly rent payments to Matt. If Amanda later changes her mind, and decides to revoke the assignment from Matt, can she do so?

a. yes, because Matt did not give consideration
b. yes, because assignments may always be revoked
c. no, because assignments may never be revoked
d. no, because the assignment was gratuitous

9. Amanda is Billy's landlord. She assigns the right to receive Billy's monthly rent checks to Matt without telling Billy. Assume Billy pays his next rent check to Amanda. If Matt tries to sue Billy for the March rent payment, will he win?

a. yes, because as an obligee he has a right to a payment from Billy
b. yes, because as the assignee he has a right to the payment from Billy
c. no, because an obligor may always continue to pay the original obligee
d. no, because Billy was not notified of the assignment

10. Jack and Jill have a contract whereby Jill will deliver water to Jack. The contract expressly prohibits assignments. Can Jack assign his rights under the contract?

a. yes, because assignments are always valid
b. yes, because the assignment is ordinary labor
c. no, because the contract expressly prohibits assignments
d. no, because Jack is the obligee

11. Gary works at National Real Estate Company. His contract contains a covenant not to compete. National is bought by American Real Estate Company, and Gary has no desire to work for his new bosses. He quits, and starts a competing business. Can American enforce his no-compete agreement?

a. no, because his contract deals with real estate
b. no, because his contract is a negotiable instrument
c. no, because his contract was based on trust and confidence in National
d. yes

12. Which of the following is most likely to be the subject matter of a valid assignment?

a. a contract to fix a car
b. a contract to tutor a child
c. a contract to receive rent payments
d. a contract to receive another's worker's compensation payments

13. If Craig is hired to tutor Jerry, may Jerry assign his right to be tutored to his friend Lenny?

a. yes
b. no, because this materially alters Craig's risk
c. no, because it is a personal services contract
d. no, because such an assignment is prohibited by statute

14. Mary hires Tom to mow her lawn. Tom delegates his duty to cut the grass to his little brother, Scott. Assume Scott does show up to mow the lawn, and Mary wants Tom to come do it himself. Can she object to the delegation?

a. yes, because she was not given notice
b. yes, because an obligee may always object to a delegation
c. no, because all delegations are valid
d. no, because this delegation is for routine and nonpersonal labor

15. Mary hires Tom to mow her lawn. Tom delegates his duty to cut the grass to his little brother, Scott. Scott is too lazy to mow the grass and never shows up. Who can Mary sue?

a. Tom only
b. Scott only
c. both Tom and Scott
d. neither Tom nor Scott

16. Mona Lisa hired Leonardo to paint her portrait and then deliver the painting to her mother in Rome. Leonardo delegated both of these duties to his friend Pablo. Which of the delegations is (are) valid?

a. the obligation to paint the portrait only
b. the obligation to deliver only
c. both A and B
d. none of the above

17. If Jen says to Laurie, "I assign all my rights in my contract with Bob to you," what has occurred?

a. an assignment
b. a delegation
c. both A and B
d. none of the above

18. Tony owes his roommate Mike $10. One night, Mike orders a pizza. When the delivery man arrives, Mike says, "Tony, if you pay for this pizza, we'll call the debt even." Tony agrees. In this arrangement, who is the promisor?

a. Tony
b. Mike
c. the delivery man
d. none of the above

19. Tony owes his roommate Mike $10. One night, Mike orders a pizza. When the delivery man arrives, Mike says, "Tony, if you pay for this pizza, we'll call the debt even." Tony agrees, and pays the delivery man. In this arrangement, how can the delivery man be characterized?

a. a third-party beneficiary
b. a creditor beneficiary
c. a donee beneficiary
d. both A and B

20. Murray has a $100,000 life insurance policy. He names his daughter Paula as the beneficiary. One day, a Russian satellite enters the atmosphere and plunges towards Earth at 2,000 miles per hour. It crashes through Murray's roof and squashes him. Murray's life insurance company refuses to pay Paula the $100,000. Can she sue them to recover the money?

a. yes, because she is a third-party beneficiary
b. yes, because she is an intended beneficiary
c. no, because she is an incidental beneficiary
d. no, because she has no privity of contract with the insurer

21. Agnes wants to give $100,000 in stock to her son, Rufus. She hires Al Attorney to carry out this transaction, but the attorney negligently fails to make the transfer. Before she can hire another attorney, a piece of a Russian satellite crashes through her roof, squashing her. Assume all the parties live in Scotland. Can Rufus sue Al Attorney for failing to properly carry out the original transaction?

a. yes, because he is a third-party beneficiary
b. yes, because he is an intended beneficiary
c. no, because he is an incidental beneficiary
d. no, because he is not in privity of contract with Al

22. Agnes wants to give $100,000 in stock to her son, Rufus. She hires Al Attorney to carry out this transaction, but the attorney negligently fails to make the transfer. Before she can hire another attorney, a piece of a Russian satellite crashes through her roof, squashing her. Can Rufus sue Al Attorney for failing to properly carry out the original transaction?

a. yes, because he is a third-party beneficiary
b. yes, because he is an intended beneficiary
c. no, because he is an incidental beneficiary
d. no, because he is not in privity of contract with Al

23. Rudolph hires Yukon Cornelieus to shovel snow from Santa's driveway. Yukon is too busy hunting Bumbles to do the job and never shows up. What circumstance might prevent Santa from suing to enforce this contract?

a. Yukon and Rudolph's agreement was oral.
b. Yukon was not in the business of shoveling snow.
c. Santa was not aware of the contract until after it was to be completed.
d. Santa had already plowed the driveway himself.

24. Kroger signs a contract to build a store in Everville, then breaches the contract and backs away from the deal. Which of the following third parties may sue to enforce the contract?

a. a local hardware store that hoped to sell building materials to the construction crew
b. a local deli who hoped to sell food to the construction crew
c. a resident who wanted to shop at a new grocery store
d. none of the above

25. Kyle leases office space from Tex. Their contract requires Kyle to buy liability insurance, which he fails to do. Boris later injured himself in Kyle's office, and sues Tex. Will he win?

a. yes, because he is a creditor beneficiary of the insurance clause of Tex's contract with Kyle
b. yes, because he is a donee beneficiary of the clause
c. no, because he is not an intended beneficiary of the clause
d. no, because he has no privity of contract with Tex