Question 1

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

	a.	an incidental beneficiary.
	b.	an intentional beneficiary.
	c.	an obligor.
	d.	a promisor.

1 points

Question 2

A third party beneficiary's status occurs

	a.	after an assignment and delegation.
	b.	when the third party is informed of the contract.
	c.	when the contract is created.
	d.	when the third party beneficiary agrees to the contract terms.

1 points

Question 3

Robert hired James, a CPA, to prepare his tax returns. James was too busy and delegated the work to Sara, also a CPA. This delegation is

	a.	not enforceable, as this violates public policy.
	b.	enforceable, as there was no expectation James would do the work.
	c.	not enforceable, as Robert hired James to perform personal services.
	d.	enforceable, as Sara is also a CPA.

1 points

Question 4

Lincoln has a $100,000 life insurance policy and names his daughter Venus as the beneficiary. When Lincoln dies, the insurance company refuses to pay Venus the $100,000. Can she sue them to recover the money?

	a.	No, because she is the promisor.
	b.	Yes, because she is an intended beneficiary.
	c.	Yes, because she is the assignee.
	d.	No, because incidental beneficiaries cannot enforce contracts.

1 points

Question 5

Molly and Craig are the original parties to a contract. Craig is obligated to design a Website for Molly. They subsequently make an agreement with Eric that Eric should take the place of Craig and assume all of Craig's rights and duties under the contract. The agreement releases Craig from his obligations under the contract. This agreement is

	a.	an accord and satisfaction.
	b.	an assignment.
	c.	a nullification.
	d.	a novation.

1 points

Question 6

Which statement most accurately describes third party beneficiary rights?

	a.	A beneficiary may enforce a contract if the parties intended to benefit him and if enforcing the promise will satisfy a duty of the promisee to the beneficiary.
	b.	If a promisee intended to make a gift to the beneficiary, the beneficiary may not enforce the contract.
	c.	Incidental beneficiaries have enforceable rights against both contracting parties.
	d.	An intended third party beneficiary has no enforceable rights in a contract.

1 points

Question 7

Meyer's Grocery signed a contract to build a store in Richmond, Kentucky. Soon afterward, Meyer's breached the contract. Which of the following can sue Meyer's to enforce the contract?

	a.	a local home improvement store that hoped to sell building materials to the construction crew
	b.	neighborhood residents who were looking forward to shopping at Meyer's
	c.	the operator of a food truck, who intended to sell lunch to the construction crew
	d.	None of these are correct.

1 points

Question 8

Ted and Alice own their recreational vehicle subject to a security agreement to Third U.S. Bank to secure the repayment of the purchase money loan. Ted and Alice sell their RV to Bob and Carol, who agree to take over the loan payments to the bank. There is no novation with the bank. Under these facts, if Bob and Carol do not make the loan payments, Third U.S. Bank

	a.	can sue Ted and Alice only.
	b.	can sue Bob, Carol, Ted, and Alice.
	c.	can sue Bob and Carol only.
	d.	cannot sue anyone but can repossess the RV.

1 points

Question 9

M & E contracted to sell 500 music stands to Coda, Inc. M & E shipped the stands in accordance with the agreement. Coda paid for the stands as promised. The contract between M & E and Coda is discharged by

	a.	full performance.
	b.	rescission.
	c.	accord and satisfaction.
	d.	agreement.

1 points

Question 10

Al contracted to sell his house to Bev. Subsequently, they both changed their minds and decided to cancel the contract. The contract between Al and Bev is discharged by

	a.	accord and satisfaction.
	b.	novation.
	c.	agreement.
	d.	full performance.