Business Law, 8e: Chapter 14

Chapter 14
Interpretation of the Contract: The Rights and Obligations of Third Persons:

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1. Generally, if a contract is partially written and partially typed, the typed part will prevail in the event of a conflict.: a. True
b. False

2. A court may interpret the words or terms and may determine if that interpretation will give effect to what the court believes the parties intended.: a. True
b. False

3. Bionghi v. Metropolitan Water district of Southern California involved a third party beneficiary.: a. True
b. False

4. An intended beneficiary must be identified by name in a contract.: a. True
b. False

5. Rogers lived next door to Jones at the end of an unpaved road. Jones arranged with a paving company to pave the road. In this situation, Rogers is a donee third party beneficiary since he will receive paving at no cost.: a. True
b. False

7. When duties under a contract are delegated, the delegator remains responsible for the performance of the contract just as though no delegation had been made.: a. True
b. False

8. A subcontractor is a party to whom a general contractor delegates duties.: a. True
b. False

9. An assignment is valid although no notice thereof is given to the other contracting party.: a. True
b. False

10. When a contract is intended to benefit a third person, such a person is referred to as a delegator.: a. True
b. False

11. A third-party beneficiary (3PB):: a. may be obligated to pay for services rendered.
b. may bring suit on and enforce the contract.
c. must consent to the contract.
d. must be identified by name.

12. In contracts where the promisee intends to make a gift to a third party, that third party is called:: a. an incidental beneficiary.
b. a donee beneficiary.
c. a donor beneficiary.
d. None of the above.

13. Wallco entered into a contract to buy 100 desks from Desks R Us. The agreement was in writing on a printed form. The form contracted provided that payment is due on receipt of the goods. The parties, however, typed the following provision on the printed form, "Payment is due 30 days after receipt of the desks." Which term will be enforced?: a. The printed term since the term was actually printed on the contract.
b. The typed term since it is the best evidence of the parties' true intention.
c. Neither term since the terms conflict.
d. The typed term because the contract is interpreted in favor of the party who didn't prepare the contract.

14. Assignments are not permitted if:: a. it will materially change to duty of the promisor.
b. it will materially impair the likelihood of receiving performance.
c. it will materially increase the risk imposed by the contract.
d. All of the above.

15. If the courts interpret a contract based upon the meaning given language in a specific area, it is using:: a. general usage.
b. limited usage.
c. parol evidence.
d. full integration.

16. Edwardo contracted with the city of St. Joseph to train and supervise disadvantaged youth for various jobs. Edwardo breached the contract and was sued by Abdalla, a disadvantaged youth. Abdalla would most likely:: a. win as he is an intended beneficiary.
b. win as he is a donor beneficiary.
c. lose as he is a creditor beneficiary.
d. lose as he is an incidental beneficiary.

17. In Bionghi v. Metropolitan Water District of Southern California, the court held:: a. a reasonable interpretation of the contract required "good cause" for contract termination.
b. a reasonable interpretation of the contract does not require "good cause" for the contract termination.
c. both contracts were void.
d. both contracts were voidable.