LU 3 Business Law Introduction to Contracts

Who has the legal right to sue to enforce the contract and receive benefits under a contract as a third party beneficiary?

• An Incidental Beneficiary

• The Assignor

• A Third Party Beneficiary

• The Assignee

What is the status of an Incidental Beneficiary in terms of enforcing the contract?

• They have the right to sue to enforce the contract.

• They do not have any right to sue to receive the benefits of the contract.

• They are the primary beneficiaries of the contract.

• They are responsible for the performance of the contract.

What must be in writing if the original contract was required to be in writing under the Statute of Frauds?

• The notice of assignment

• The form of assignment

• The third party beneficiary designation

• The incidental beneficiary designation

Who remains ultimately responsible for the performance of the contract after an assignment?

• The Assignee

• The Guarantor

• The Assignor

• The Third Party Beneficiary

What is the obligation of the Assignee in the context of an assignment of rights?

• To perform the contract

• To notify the other party to the contract of the assignment

• To sue the Assignor if the contract is not performed

• To become the Guarantor of the original contract

Who becomes the guarantor of the contract when the assignor assigns a contract?

• The assignee of the contract

• The original contracting party

• The guarantor of the original contract

• The assignor of the contract

Which of the following contracts CANNOT be assigned?

• Contracts that include a restriction against assignment

• Personal Service Contracts

• Contracts prohibited by law or public policy

• All of the above

What is required for a novation to take place?

• Agreement of all parties

• A change in the contractual obligations

• Replacement of one of the original parties to the contract

• All of the above

What happens to contract rights when a contracting party dies?

• They are voided

• They are transferred to a third party

• They are assigned to the Administrator or Executor of the estate

• They are automatically terminated

What is the main difference between an assignment and a novation?

• An assignment transfers only the benefits of a contract

• A novation requires the agreement of all parties

• An assignment requires a new contract to be created

• A novation replaces one of the original parties to the contract