Question 1

A policy of life insurance provided that the insurers would pay to the insured or his assignees the sum of $1000.00 if he died before July 31,1926.The insured assigned the benefit of the policy to his wife and gave written notice of the assignment to the insurers.The policy was later extended,on the payment of an additional premium,for a further three months,but the benefit of the extension was not assigned to the wife.The insured died within the three-month extension period and the matter went to court on the issue of whether or not the wife benefited from the extension of the policy so as to be entitled to the insurance money.In this case,

Accepted Answer

A)  the rule regarding notice of an assignment was not followed.
B)  the extension of the policy was for the benefit of the wife and a trust had been created in her favour so as to entitle her to the insurance money.
C)  the intention of the insured was not to benefit his wife,so she gets nothing.
D)  the normal rule of privity applies and the wife gets nothing.
E)  none of the aboveF) A) and B)
G) B) and E)

Question 2

Explain the concept of a chose in action.

Accepted Answer

A chose in action is a right t...

Question 3

Dunlop sold a number of their tires to Dew & Co.on the terms that Dew & Co.would not resell them below certain listed prices and that,in the event of a sale to trade customers,Dew & Co.would get a similar undertaking not to sell below the listed prices.Dew & Co.sold the tires to Selfridge,who agreed to observe the restrictions and to pay Dunlop the sum of $5.00 for each tire sold in breach of this agreement.Selfridge in fact supplied tires to two of their own customers below the listed price.Dunlop now sues Selfridge to recover the two sums of $5.00 as liquidated damages and asks for an injunction to restrain further breaches of the agreement.In this situation,

Accepted Answer

A)  there is a no contract between Dew & Co.and Dunlop.
B)  Dunlop has no contractual connection to the contract between Selfridge and Dew & Co.
C)  Selfridge is not in breach of the contract between Dew & Co.and Dunlop.
D)  Selfridge has a contract with Dunlop.
E)  there is a contract between Dunlop and Selfridge.F) All of the above
G) C) and D)

Question 4

A contracting party who,unknown to the other party,is represented by an agent is called

Accepted Answer

A)  a secondary agent.
B)  a principal.
C)  an undisclosed principal.
D)  a collateral agent.
E)  a collateral principal.F) B) and D)
G) C) and E)

Question 5

Liabilities may be assigned to a third party.

Accepted Answer

A) True 
 B)False

Question 6

The right to intangible property is known as

Accepted Answer

A)  intangible property right.
B)  equitable assignment of property.
C)  a chose in action.
D)  a chose of property.
E)  a chose in possession.F) A) and E)
G) C) and E)

Question 7

Which of the following is true?

Accepted Answer

A)  A trustee is not the legal owner of the property that she or he is administering.
B)  A constructive trust is a relationship that exists between a trustee and beneficiary.
C)  The legal owner of trust property is the true owner of the property.
D)  A trustee is the legal owner of the property that she or he is administering.
E)  The beneficiary of a trust cannot enforce the trust in his or her favour.F) C) and E)
G) B) and C) D

Question 8

Which of the following is NOT a trust arrangement?

Accepted Answer

A)  a mother transferring assets to provide for her infant should she pass away
B)  your broker requiring sufficient funds in your account to cover a deficit
C)  property of a bankrupt being transferred to a trustee
D)  a corporation transferring the title to fixed assets to a trustee for bondholders as security for the payment of the bonds
E)  parents setting up a fund for the education of their childrenF) C) and D)
G) D) and E)

Question 9

Where an assignment of a debt is equitable only,

Accepted Answer

A)  the assignee alone can sue the debtor to enforce payment.
B)  both the assignor and assignee must sue together to enforce the payment.
C)  the assignor alone can sue the debtor to enforce payment.
D)  none of the above
E)  all of the aboveF) B) and C)
G) B) and E) B

Question 10

Ordinarily,a debtor/promisor must consent to an assignment.

Accepted Answer

A) True 
 B)False

Question 11

A Company builds homes and enters into a contract with B wherein the contract expressly provides that A Company may employ subcontractors to do some or all of the work.In this case,

Accepted Answer

A)  B cannot object to the subcontractors doing the work.
B)  A Company can do the work.
C)  both A Company and the subcontractors can do the work.
D)  B cannot object to A Company doing the work.
E)  all of the aboveF) D) and E)
G) A) and B)

Question 12

Landlord and Tenant entered into a five-year lease.One year later,Landlord sold the premises to Purchaser.Purchaser is bound by the lease.

Accepted Answer

A) True 
 B)False

Question 13

An assignee of a contract takes the contract subject to equities.Explain the meaning of this phrase with the use of examples.

Accepted Answer

One of the fundamental rules is that an assignee cannot acquire a title that is better than that of the assignor.The assignee thus takes title subject to equities,that is,subject to any rights or claims against title.Thus if a contract that was induced by a fraudulent misrepresentation of Jack,the assignor,is assigned,the assignee,Philip,has no better chance of enforcing the contract than Jack,the original perpetrator of the fraudulent misrepresentation,has.

Question 14

H owes C $700.00.By agreement between H and R,R promises to pay this debt in return for H's undertaking to convey a house to him.C now sues R on his promise.In this situation,

Accepted Answer

A)  there is no contract between H and C.
B)  there is a contract between H and R.
C)  privity of contract prevents C from succeeding.
D)  there is no contract between R and C.
E)  all of the aboveF) A) and D)
G) A) and C)

Question 15

A negotiable instrument is

Accepted Answer

A)  valuable documents that can be pledged as security to another.
B)  an instrument that can be given in exchange for a promise of another.
C)  an instrument that is used in negotiations.
D)  a written promise by a party given in exchange for a promise of another.
E)  a written contract containing a promise,express or implied,to pay a specific sum of money to the order of a designated person or to bearer.F) A) and B)
G) C) and E)

Question 16

The rule regarding privity can be overcome by a finding of a collateral contract entered into by the same parties.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is NOT an example of an exception to the privity of contract rule?

Accepted Answer

A)  a life insurance policy
B)  collateral contracts
C)  the trust
D)  bilateral contracts
E)  the undisclosed principal in an agencyF) A) and E)
G) A) and D)

Question 18

Where a promisee has obtained a promise for the benefit of a third party,a constructive trust exists.

Accepted Answer

A) True 
 B)False

Question 19

A receiving order is used in

Accepted Answer

A)  negotiations.
B)  tort proceedings.
C)  legal proceedings for breach of a sales agreement where the promisee is to receive products from another.
D)  bankruptcy proceedings.
E)  proceedings involving negotiable instruments as a defence to an action on the negotiable instrument.F) C) and D)
G) A) and E)

Question 20

The right to tangible property that can be possessed is known as

Accepted Answer

A)  assignment of rights.
B)  a chose in action.
C)  chattel property rights.
D)  a chose in possession.
E)  equitable assignment.F) C) and E)
G) A) and D)

Exam 11: Privity of Contract and the Assignment of Contractual Rights

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Explain the concept of a chose in action.

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A chose in action is a right t...
View Answer

Correct Answer
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A contracting party who,unknown to the other party,is represented by an agent is called

Correct Answer
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Liabilities may be assigned to a third party.

Correct Answer
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The right to intangible property is known as

Correct Answer
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Which of the following is true?

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D

Which of the following is NOT a trust arrangement?

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Where an assignment of a debt is equitable only,

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B

Ordinarily,a debtor/promisor must consent to an assignment.

Correct Answer
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A Company builds homes and enters into a contract with B wherein the contract expressly provides that A Company may employ subcontractors to do some or all of the work.In this case,

Correct Answer
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Landlord and Tenant entered into a five-year lease.One year later,Landlord sold the premises to Purchaser.Purchaser is bound by the lease.

Correct Answer
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An assignee of a contract takes the contract subject to equities.Explain the meaning of this phrase with the use of examples.

H owes C $700.00.By agreement between H and R,R promises to pay this debt in return for H's undertaking to convey a house to him.C now sues R on his promise.In this situation,

Correct Answer
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A negotiable instrument is

Correct Answer
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The rule regarding privity can be overcome by a finding of a collateral contract entered into by the same parties.

Correct Answer
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Which of the following is NOT an example of an exception to the privity of contract rule?

Correct Answer
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Where a promisee has obtained a promise for the benefit of a third party,a constructive trust exists.

Correct Answer
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A receiving order is used in

Correct Answer
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The right to tangible property that can be possessed is known as

Correct Answer
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Exam 11: Privity of Contract and the Assignment of Contractual Rights

Correct AnswerverifiedShow Answer

Explain the concept of a chose in action.

Correct AnswerverifiedA chose in action is a right t...View AnswerShow Answer

Correct AnswerverifiedShow Answer

A contracting party who,unknown to the other party,is represented by an agent is called

Correct AnswerverifiedShow Answer

Liabilities may be assigned to a third party.

Correct AnswerverifiedShow Answer

The right to intangible property is known as

Correct AnswerverifiedShow Answer

Which of the following is true?

Correct AnswerverifiedD

Which of the following is NOT a trust arrangement?

Correct AnswerverifiedShow Answer

Where an assignment of a debt is equitable only,

Correct AnswerverifiedB

Ordinarily,a debtor/promisor must consent to an assignment.

Correct AnswerverifiedShow Answer

A Company builds homes and enters into a contract with B wherein the contract expressly provides that A Company may employ subcontractors to do some or all of the work.In this case,

Correct AnswerverifiedShow Answer

Landlord and Tenant entered into a five-year lease.One year later,Landlord sold the premises to Purchaser.Purchaser is bound by the lease.

Correct AnswerverifiedShow Answer

An assignee of a contract takes the contract subject to equities.Explain the meaning of this phrase with the use of examples.

H owes C $700.00.By agreement between H and R,R promises to pay this debt in return for H's undertaking to convey a house to him.C now sues R on his promise.In this situation,

Correct AnswerverifiedShow Answer

A negotiable instrument is

Correct AnswerverifiedShow Answer

The rule regarding privity can be overcome by a finding of a collateral contract entered into by the same parties.

Correct AnswerverifiedShow Answer

Which of the following is NOT an example of an exception to the privity of contract rule?

Correct AnswerverifiedShow Answer

Where a promisee has obtained a promise for the benefit of a third party,a constructive trust exists.

Correct AnswerverifiedShow Answer

A receiving order is used in

Correct AnswerverifiedShow Answer

The right to tangible property that can be possessed is known as

Correct AnswerverifiedShow Answer

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A chose in action is a right t...
View Answer

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D

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B

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