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Exam 17: Third Parties

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Question 21

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If Ray agrees to rake leaves for Michelle in exchange for Michelle's promise to pay off the debt Ray owes to Dean, then Dean is a donee beneficiary of the agreement between Ray and Michelle.

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Question 22

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Harris, who owes Nathan $4,000, sells Bethany a used car for $5,000, payable in 30 days. Harris immediately tells Nathan that she doesn't have the money she owes him, but she is willing to give him her claim to Bethany's $5,000. Nathan agrees and gives up his claim against Harris for $4,000, and Harris notifies Bethany of the assignment. In this case, Bethany is best described as the

A) assignee.
B) assignor.
C) obligor.
D) obligee.

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Question 23

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An assignment for consideration is irrevocable.

Most types of duties may be delegated.

A rock group assigns its payment under a performance contract to the Costume Shop, a business that has supplied the group with outrageous stage outfits, and to which the group owes a great sum of money. This is a(n)

Susan took out a life insurance policy on herself, paying all of the premium payments. She named her daughter, Jessica, as the beneficiary under the policy. Jessica has not given anything in consideration for the policy. Jessica is a(n)

Johann, a well-known musician, agrees to give ten guitar lessons to Elton for $2,000. Nothing in the contract itself prohibits a delegation. If Johann delegates his obligation to Eugene, a second-year musical student and enthusiastic guitar player, then the delegation will probably be

Once a duty is delegated, it relieves the delegator of his or her own liability to perform the contract.

Cheryl enters into a contract with Gabe. In this contract, Cheryl asks Gabe to pay the money he owes her from the contract to her friend Leah because Leah is having financial troubles. Leah is

Andrew Durham was injured in a job-related accident that resulted in a workers' compensation settlement agreement with the employer's insurance carrier, Traveler's Indemnity Company. The settlement agreement required Traveler's to pay Durham $2,500 per month for the rest of his life. To finance its obligation, Traveler's purchased an annuity in its name. The settlement agreement required Traveler's approval or written consent prior to an assignment of the annuity payments. Durham later decided to open a business and went to a credit union for a $214,000 loan. The credit union loaned the money, taking a security interest in Durham's monthly annuity payments. Traveler's consent was never secured. Discuss the conditions in which a right may not be assigned and assess if this was a valid assignment.

The status of a third party is determined by

Linda assigns to Ben a right to receive rent payments. In terms of Linda's warranty as the assignor, the law implies which of the following?

Lawrence took out a life insurance policy in which his daughter, Madeline, is named as a beneficiary. Madeline is

Briefly discuss the enforceability of contracts by third parties.

An assignment is valid from the moment it is made, regardless of whether the assignor notifies the obligor.

Brandon orally assigned his right to $100 from a lawn mowing contract to Will as a gift. This assignment is

Shirley is an actress under contract with Twentieth Century. Shirley agreed to perform the lead role in a musical to be filmed in Hollywood by Twentieth Century. At the last minute, Twentieth Century decided to scrap the musical and assigned its rights in Shirley to MGM. MGM was planning to film a western in Australia requiring Shirley to spend six months filming in Australia. Can Shirley successfully prevent this assignment?

Contract prohibitions against assignments are invalid as a matter of public policy.

Which statement regarding assignment is accurate?

If Valley Bridge contracts with Rainbow Painters to paint a bridge and the contract requires that only Sherwin Williams paint be used, then Sherwin Williams, as third party beneficiary, will be able to enforce the contract against either Valley Bridge or Rainbow Painters.