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Exam 18: Third Party Rights

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Question 1

True/False

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Privity of contract establishes the basic principle that contracting parties have a right to privacy in the information expressed in their contracts.

A) True
B) False

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Question 2

Multiple Choice

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Commercial Rebuild LLC enters into a contract to remodel Dockside Marina, agreeing to use only products from Eagle Supplies. Halfway through the project, Commercial refuses to finish the job. The contract can be enforced against Commercial by

A) Dockside only.
B) Eagle only.
C) Dockside or Eagle.
D) any interested third party, including a contracting party's employee.

E) A) and B)
F) B) and D)

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Question 3

Multiple Choice

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For a price, Rose agrees to unload the catch from fishing boats that dock at Seafood Shipping. Rose delegates this duty to Tina, who then owes performance of the duty to the warehouse. Tina is

A creditor beneficiary cannot sue a promisor directly to enforce a contract.

In a contract for a sale of goods, the right to receive payment on an account may be assigned unless the sales contract prohibits such an assignment.

As a general rule, most any duty can be delegated.

A debt collector to whom is delegated the right to payments on a student loan owes no obligation to the debtor arising under the original terms of the loan.

For a price, Ray agrees to unload trucks that make deliveries to Shoppers Warehouse. Ray delegates this duty to Tim, who then owes performance of the duty to the warehouse. Ray is

The unconditional assignment of rights under a contract extinguishes any defenses that the obligor had against the assignor.

Marlo and Nita enter into a contract for the sale of Marlo's apartment for which Nita agrees to pay $250,000. Nita assigns her right to buy the apartment to Owen. Owen is

Farah makes and sells camping gear. Farah and Gobi enter into a contract for a delivery of the gear to Gobi's Outfitters retail locations for an invoiced price. Farah transfers the right to payment under the contract to Haulers Distribution Inc. This transfer is

A surgeon can delegate his or her contractual duty to operate on a certain patient because the rendering of medical services is not personal performance.

Lew and Mavis enter into a contract for the clearing and plowing of Mavis's 350-acre tract for which she agrees to pay $1,000. Lew transfers his duty under this contract to Nye. With respect to the duties under the original contract, this transfer

Metro County contracts with New Build Inc. to build a courthouse. New Build hires Odell to excavate the site. Odell's work damages adjacent properties. Metro files a suit against the excavator, who argues that the county is not named in his contract with New Build. Most likely, the court will hold Odell is

Generally, the duties under a contract can be delegated

On an assignment to a loan broker by an auto dealer of the payments due on an auto loan, the broker obtains only those rights that the dealer originally had.

Demi, an accountant, and Engineers PA enter into a contract under which Demi agrees to perform audits for Engineers. Demi can delegate the duty to perform the audits to

A bank's sale of its right to receive payment on a loan to a third party is a transfer but not an assignment.

Retail LLC contracts with Paving Inc. to grade and pave a parking lot. The contract provides that it cannot be assigned without Retail's consent. Later, Paving assigns the contract to Roadwork Company without obtaining Retail's consent. Retail could most successfully argue that the contract cannot be assigned because

No special form is required to make a delegation of duties-as long as the delegator expresses an intention to make the delegation, it is effective.