In Which of the Following Situations Is There a Third

question 55

Multiple Choice

In which of the following situations is there a third party incidental beneficiary who would be unable to enforce the agreement?

• A) Wholesalers, when the buyer of a business promises the seller that he will pay outstanding debts to wholesalers who have supplied inventory for the business.
• B) A doctor, when an automobile accident policy states that the insurance company will reimburse the insured for medical expenses incurred as a result of an automobile accident.
• C) Workers, where a contractor agrees to post a performance bond to assure payment of workers and material suppliers.
• D) A debtor, where a new partner enters an accounting firm and agrees to pay a share of debts incurred prior to his admission to the firm.

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Definitions:

Good Faith

Conducting oneself with sincerity, honesty, and integrity in dealings with others, especially in the execution of contracts or negotiations.

UCC Section 1-203

A principle under the Uniform Commercial Code emphasizing good faith and fair dealings in the performance and enforcement of commercial contracts.

Cash on Delivery (COD)

A transaction method where payment for goods is made at the time they are delivered rather than in advance.

Inspection Allowed

A provision in agreements that grants one party the right to examine goods, documents, or facilities before finalizing a transaction.