A Rock Group Assigns Its Payment Under a Performance Contract

question 23

Multiple Choice

A rock group assigns its payment under a performance contract to the Costume Shop,a business that has supplied the group with outrageous stage outfits,and to which the group owes a great sum of money.This is

• A)a valid assignment because of the rule of freedom to contract.
• B)a valid assignment because this is a simple transfer of the right to receive money.
• C)an invalid assignment because it increases the burden of the payor.
• D)an invalid assignment because this is a personal service contract.

---

Definitions:

Capital

The money and property that a business needs to operate.

Corporation by Estoppel

A legal doctrine that prevents a person from denying the corporate existence of an entity when they have treated it as a corporation.

Properly Incorporated

Refers to a company or entity that has been legally established and registered under the laws of its jurisdiction.

Valid Corporation

A legal entity that is properly incorporated under the laws of its jurisdiction, providing its owners with limited liability.