Question 1

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) All of the above

Question 2

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 3

A Company contracts to build a house for B,and the contract expressly states that the contractor may from time to time use the services of subcontractors.In the course of performing the contract,one of the subcontractors negligently builds a wall,which falls over,destroying B's car.In this situation

Accepted Answer

A)  the damage to the car is too remote and neither A Company nor the subcontractor can be sued.
B)  only the subcontractor can be sued.
C)  only the contractor,A Company,can be sued.
D)  both the subcontractor and A Company can be sued.
E)  none of the aboveF) C) and D)
G) A) and E) D

Question 4

The effect of the doctrine of privity of contract is that

Accepted Answer

A)  a person who is not a party to a contract cannot obtain benefits or rights under it.
B)  a unilateral contract is unenforceable against parties who have privity.
C)  parties to a contract are protected by the law.
D)  a bilateral contract is unenforceable against a promisee.
E)  a person can obtain rights under a contract to which he or she is not a party.F) A) and B)
G) C) and D)

Question 5

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) B) and E)
G) C) and E)

Question 6

Since contracts can benefit non-parties,should the rules relating to privity of contract be changed in Ontario?

Accepted Answer

Where a contract benefits a non-party,it...

Question 7

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) A) and D)
G) None of the above C

Question 8

An undisclosed principal is a contracting party who unknown to the other party is represented by an agent.

Accepted Answer

A) True 
 B)False

Question 9

The general rule is that a contract does NOT give any benefits to or impose any obligations on which of the following

Accepted Answer

A)  the original promisor.
B)  the original promisee.
C)  a seller of goods.
D)  a third party to the contract.
E)  a manufacturer of goods.F) A) and B)
G) B) and E)

Question 10

Who is an assignor?

Accepted Answer

An assignor is a par...

Question 11

Explain the phrase "an assignee takes subject to equities."

Accepted Answer

One of the fundamental rules is that an ...

Question 12

An unscrupulous creditor might sell the right to collect the same debt to two different persons by assigning it to each of them.Which one of the two innocent assignees is entitled to payment and why?

Accepted Answer

The assignee who first gives notice to t...

Question 13

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) B) and C)
G) A) and E)

Question 14

The effect of the doctrine of privity of contract is that a unilateral contract is unenforceable against the promisee.

Accepted Answer

A) True 
 B)False

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) B) and C)
G) All of the above

Question 16

A debtor/promisor who continues to make payments to his original creditor after receiving notice of an assignment will not be required to pay the amount a second time.

Accepted Answer

A) True 
 B)False  False

Question 17

Explain the difference between negotiability and assignability.

Accepted Answer

Negotiable instruments are capable of be...

Question 18

The legal owner of trust property is the true owner of the property.

Accepted Answer

A) True 
 B)False

Question 19

Mary wants to be able to take care of her sons when she is away.She decides to give an amount of money to a friend,Melanie,with the instructions that she is to use that money to care for the children when she is away.Melanie is called a ________ and the children are called ________.

Accepted Answer

A)  guardian; trustees
B)  caretaker; trustees
C)  money caretaker; beneficiaries
D)  trustee; beneficiaries
E)  constructive trust; beneficiariesF) A) and D)
G) None of the above

Question 20

An exemption clause is a provision in a contract that limits the liability of a party.

Accepted Answer

A) True 
 B)False

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

Which of the following is NOT a trust arrangement?

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

Correct AnswerverifiedD

The effect of the doctrine of privity of contract is that

Correct AnswerverifiedShow Answer

A receiving order is used in

Correct AnswerverifiedShow Answer

Since contracts can benefit non-parties,should the rules relating to privity of contract be changed in Ontario?

Correct AnswerverifiedWhere a contract benefits a non-party,it...View AnswerShow Answer

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

Correct AnswerverifiedC

An undisclosed principal is a contracting party who unknown to the other party is represented by an agent.

Correct AnswerverifiedShow Answer

The general rule is that a contract does NOT give any benefits to or impose any obligations on which of the following

Correct AnswerverifiedShow Answer

Who is an assignor?

Correct AnswerverifiedAn assignor is a par...View AnswerShow Answer

Explain the phrase "an assignee takes subject to equities."

Correct AnswerverifiedOne of the fundamental rules is that an ...View AnswerShow Answer

An unscrupulous creditor might sell the right to collect the same debt to two different persons by assigning it to each of them.Which one of the two innocent assignees is entitled to payment and why?

Correct AnswerverifiedThe assignee who first gives notice to t...View AnswerShow Answer

The right to intangible property is known as

Correct AnswerverifiedShow Answer

The effect of the doctrine of privity of contract is that a unilateral contract is unenforceable against the promisee.

Correct AnswerverifiedShow Answer

A negotiable instrument is

Correct AnswerverifiedShow Answer

A debtor/promisor who continues to make payments to his original creditor after receiving notice of an assignment will not be required to pay the amount a second time.

Correct AnswerverifiedFalse

Explain the difference between negotiability and assignability.

Correct AnswerverifiedNegotiable instruments are capable of be...View AnswerShow Answer

The legal owner of trust property is the true owner of the property.

Correct AnswerverifiedShow Answer

Mary wants to be able to take care of her sons when she is away.She decides to give an amount of money to a friend,Melanie,with the instructions that she is to use that money to care for the children when she is away.Melanie is called a ________ and the children are called ________.

Correct AnswerverifiedShow Answer

An exemption clause is a provision in a contract that limits the liability of a party.

Correct AnswerverifiedShow Answer

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D

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Where a contract benefits a non-party,it...
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C

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An assignor is a par...
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One of the fundamental rules is that an ...
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The assignee who first gives notice to t...
View Answer

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False

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Negotiable instruments are capable of be...
View Answer

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Mary wants to be able to take care of her sons when she is away.She decides to give an amount of money to a friend,Melanie,with the instructions that she is to use that money to care for the children when she is away.Melanie is called a and the children are called .

Correct Answer
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