Cengage Advantage Books Introduction To Business Law 3rd Edition By Beatty – Test Bank

CHAPTER 11 – CONCLUSION TO CONTRACTS

TRUE/FALSE

1. Incidental beneficiaries generally have the right to sue for breach of contract.

ANS: F PTS: 1

2. Most, but not all, contract rights are assignable.

ANS: T PTS: 1

3. If Casey assigns her rights to receive income from rental property to Errol, then Errol will legally acquire any rights held by Casey to the income.

ANS: T PTS: 1

4. Char-Glo Industries contracted with Evergreen Lawn Service to mow and trim the company’s lawn. In the contract, Char-Glo included a clause prohibiting Evergreen from delegating its duties. Courts will ordinarily enforce such a clause.

ANS: T PTS: 1

5. If Valley Bridge contracts with Rainbow Painters to paint a bridge and the contract requires that only Sherwin Williams paint be used, then Sherwin Williams will be able to enforce the contract against either Valley Bridge or Rainbow Painters.

ANS: F PTS: 1

6. Amanda buys a vacuum to use in her home from retailer Andy. Amanda promises to pay for it in six monthly installment of $50 each. Andy assigns the contract to Big Finance Co. who paid value and took without notice of any defense. Big Finance Co. sues Amanda for nonpayment. Amanda has stopped making payments because the vacuum stopped working and Andy refuses to honor the express warranty he made to her at the time of the sale. Generally, any defense that Amanda may have against Andy is good against Big Finance Co.

ANS: T PTS: 1

7. Assume that Jessie and Lester have formed a contract whereby Jessie agrees to deliver 10,000 dozen “Grade A Large Eggs” to be shipped in recycled paper cartons. A shortage of paper makes paper cartons much more expensive, so Jessie uses styrofoam cartons and ships the eggs. Lester is entitled to cancel the contract based on this deviation of terms in the contract.

ANS: F PTS: 1

8. Abdulla hired Granite Construction to build an addition onto his home. Granite Construction dug the foundation but then abandoned the project. Granite Construction is entitled to receive the full contract price minus the value of the defects.

ANS: F PTS: 1

9. Expectation interest can best be described as money spent in reliance upon the agreement.

ANS: F PTS: 1

10. Dr. Gonzalez ordered specialized surgical equipment from Physician’s Supply Co., but his order was not delivered by the agreed date. Gonzalez is under no obligation to minimize damages since the contract was breached by Physician’s Supply, not Gonzalez.

ANS: F PTS: 1