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ANSWER KEY
Chapter 12 Third Parties, Discharge, and Remedies
Opening Case Questions
2. The party who assigns rights or delegates duties is the assignor. The outside third party to whom
3. As a measure of protection against subsequent assignments, the assignee should give notice of the
5. Assignments, in special situations, may be restricted by law or declared void because they are
A QUESTION OF ETHICS
Special Directions to the Instructor: It would be remarkably demanding for an instructor to forecast
with assurance the wide variety of answers that students will provide for the ethical question asked in
the Question of Ethics feature in this chapter. On the other hand, the ethical issue in this case involves
Questions for Review and Discussion
1. A beneficiary in whose favor a contract is made is an intended beneficiary. Intended beneficiaries
can enforce the contract made by those in privity of contract. Those who are most frequently
2. An incidental beneficiary is an outside party for whose benefit a contract was not made but who
3. An assignment is a transfer of a contract right, so that the assignee has the same rights that the
4. A novation occurs when two contracting parties agree to replace one of the parties with a new
party. The new party (the assignee) agrees to enter the contract with the remaining original party (the
6. Complete performance occurs when all parties fully accomplish all required tasks. Substantial
Cases for Analysis
2. Although the giving of notice is the obligation of the assignee, either party may give notice. Once
3. Yes. Once the obligor has notice of the assignment, the obligor cannot lawfully pay the amount to
4. Yes. The court held that Copeland’s abilities and skills were not of a routine nature but were
5. No. The Murphys knew of no problems with the house when the sale took place. Consequently,
they had no claim against Timbercrest either at the time of the sale or at the time of the assignment.
6. No. It was not necessary for Sam Fox to obtain Nolan’s permission before assigning the
publishing contract to Williamson. The court held that the agreement between Nolan and Sam Fox did
7. The contractor should prevail. The only performance problem was that the plumbing was not
END CHAPTER TWELVE
