Fin 280 EXAM 2 - Ch 16-19

  1. Morgan entered into a contract to purchase certain real estate from Shine. Which of the following statements is FALSE? 

    B) The contract is nonassignable as a matter of law.
  2. Sisk is a tenant of Met Company and has 2 years remaining on a 6-yr lease executed by Sisk and Met. The lease prohibits subletting but is silent as to Sisk's right to assign the lease. Sisk assigned the lease to Kern Corp, which assumed all of Sisk's obligations under the lease. Met objects to the assignment. Which one of the statements is true?

    D) Sisk will remain liable to Met for the rent provided for in the lease
  3. One of the criteria for a valid assignment of a sales contract to a third party is that the assignment must:

    C) not materially increase the other party's risk or duty
  4. Ferco, Inc. claims to be a creditor beneficiary of a contract between Bell Co. and Allied Industries. Allied is indebted to Ferco. The contract between Bell and Allied provides that Bell is to purchase certain goods from Allied and pay the purchase price directly to Ferco until Allied's obligation is satisfied. Without justification, Bell failed to pay Ferco and Ferco sued Bell. Ferco will:

    B) prevail, because Ferco was an intended beneficiary of the contract
  5. Union Bank lent $200,000 to Wagner. Union required Wagner to obtain a life insurance policy naming Union as beneficiary. While the loan was outstanding, Wagner stopped paying the premiums on the policy. Union paid the premiums, adding the amounts paid to Wagner's loan. Wagner died, and the insurance company refused to pay the policy proceeds to Union. Union may:

    C) recover the policy proceeds because it is a creditor beneficiary
  6. Rice contracted with Locke to build an oil refinery for Locke. The contract provided that Rice was to use United pipe fittings. Rice did not do so. United learned of the contract and, anticipating the order, manufactured additional fittings. United sue Locke and Rice. United is:

    C) not entitled to recover because it is an incidental beneficiary
  7. The party to a contract who assigns his rights to a third party is called the: 
    a) assignor
    b) assignee
    a) assignor
  8. If a statute prohibits the assignment of a worker's compensation claim, an assignment that attempts to transfer an interest in that claim will be unenforceable: T/F
  9. An assignment is not valid unless notice is to the assignee: T/F
  10. Normally, a delegation of duties does not relieve the delegator of his obligation to perform in the event the delegatee fails to do so. T/F
Card Set
Fin 280 EXAM 2 - Ch 16-19
Fin 280 EXAM 2 - Ch 16-19