When Contract Terms Prohibiting the Assignment of Rights Exist, Most

question 53

Multiple Choice

When contract terms prohibiting the assignment of rights exist, most courts will:

• A) award the obligor a right to damages for the breach of the terms forbidding the assignment.
• B) interpret a general term prohibiting assignments as a mere promise not to assign.
• C) strictly construe them.
• D) All of these.

Discern the impact of bankruptcy on guarantors and sureties.

Identify legal principles around creditor's rights and debtor's defenses.

Understand the concept and implications of subrogation rights for sureties and guarantors.

Grasp the conditions under which a court would prioritize claims between secured parties and mechanic's lien claimants.

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Definitions:

Short-Term Creditors

Short-term creditors are lenders or suppliers to whom a company owes money that is due to be paid back within a short period, typically within one year.

Liquidity

A measure of how easily assets can be converted into cash without significant loss of value.

Supplier

A party that provides goods or services to another entity, typically in a B2B (business-to-business) relationship.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations, calculated by dividing current assets by current liabilities.