With Regard to the Law Governing Privity of Contract and Assignment

question 157

Multiple Choice

With regard to the law governing privity of contract and assignment, which of the following is false?

• A)Assignments are modifications of the privity of contract rule since they do allow a stranger to contract to receive benefits from the contract.
• B)Novation refers to the ending of the original contract and entering into a new contract with changes in terms, such as substituting one party for another.
• C)A statutory assignment is easier to enforce than an equitable assignment.
• D)A party to a contract for services can assign both his contractual obligations and his contractual rights.
• E)The privity of contract rule states that only the parties to the contract have rights and obligations under the contract.

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Definitions:

Note Payable

A written promise to pay a specified amount of money, typically with interest, at a future date.

Installment

A method of paying for goods or services or repaying a loan through regular, scheduled payments.

Accounting Equation

The basic formula of double-entry accounting: Assets equal Liabilities plus Equity.

Accounting Equation

The fundamental equation of double-entry bookkeeping: Assets = Liabilities + Equity, representing the financial position of a business.