CHAPTER 12—THIRD PARTIES AND CONTRACTS Key
1. A person not party to contract but whom parties intended to benefit is known as a(n) _____.
2. An incidental beneficiary is best described as a person:
3. Blake agreed to renovate Jane’s house, and they drafted a written contract. However, Blake was unable to
complete the renovation due to an accident. Blake’s friend, Tom, agreed to complete the job, and Jane agreed to
release Blake from the contract. The terms of the old contract remained the same. This process of substitution of
a contract is known as a(n) _____.
4. Which of the following statements best describes the term “assignment”?
5. Allen was hired by Jake to paint his house. However, Allen could not complete the task and hired Jim to step
in for him. The original contract between Allen and Jake still remained the same. In this scenario, Allen is
engaged in _____.
6. Which of the following warranties does an assignor make when he assigns rights under a contract to an
assignee for value?
7. A joint contract is one in which:
8. Which of the following statements best describes a several contract?
9. At common law, individuals other than the parties to a contract can sue upon or seek to enforce the contract.
10. A creditor beneficiary is one to whom the promisee owes no duty but for whom performance is a gift.
11. A novation does not need to be in writing and can be implied from the parties’ actions.
12. As a general rule, one’s rights under a contract cannot be transferred freely.
13. The term delegation describes a transfer of rights.
14. Only when performance is standardized, may one delegate its performance to another.
15. In the event of bankruptcy, the law assigns the rights and duties of the debtor to the trustee in bankruptcy.
16. In a joint contract, if a promise is not carried out, the aggrieved party may not sue just one party but both
parties.
17. Express words must be used to show that a several contract is intended.
18. A contract can never be described as being both joint and several.
19. Explain novation.