Darrell Owns a Parcel of Land That Is Encumbered by a Mortgage

question 24

Multiple Choice

Darrell owns a parcel of land that is encumbered by a mortgage held by the First National Bank. Darrell agrees to sell the land to Paul for $50,000. Darrell and Paul together go to the First National Bank to discuss the sale and purchase with the banker. Darrell, Paul, and the banker sign an agreement stating that Paul will assume the mortgage and that Darrell will be discharged from all further liability on the mortgage. In this case:

• A) the bank is a third party donee beneficiary.
• B) the bank can collect from Darrell if Paul defaults.
• C) Darrell is a third party beneficiary of the agreement between Paul and the bank.
• D) the agreement among the three is a novation.

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Definitions:

Common Ground

A basis of mutual interest or agreement found among different parties or individuals.

Common Experiences

Events, situations, or feelings that are widely shared or felt among a group of people.

Interns

Individuals, often students, who work in a temporary position with an emphasis on on-the-job training rather than merely employment.

Clear, Firm Boundaries

Well-defined limits within which one operates, ensuring respect and understanding in professional and personal relations.