Four-Square Construction Company enters into a contract with Ben to remodel Caro
ID: 444708 • Letter: F
Question
Four-Square Construction Company enters into a contract with Ben to remodel Carol's Home Store, using products from Delta Building Supplies. Eatery Café is next to Carol's Home Store. The remodeling is a gift from Ben to Carol.
Refer to Fact Pattern 13-1. Delta will realize a profit from the sale of products to Four-Square to remodel Carol's store. Delta is
a delegatee.
an assignee.
an incidental beneficiary.
an intended beneficiary.
Rocko owes Sybil $1,000 for yard work Sybil performed for Rocko. The money is due on May 1. On April 30, Rocko goes to the bank to get the money and discovers that the bank will be closed until May 2. Rocko
will be in breach of contract when he fails to pay Sybil on May 1.
will not be in breach of contract when he fails to pay Sybil on May 1 due to objective impossibility.
is discharged from any contractual liability to Sybil.
will not be in breach of contract when he fails to pay Sybil on May 1 as long as he pays the $1,000 plus ten percent interest on May 2.
Eli owes Martin $10,000. Martin assigns the claim to Jack. Jack does not notify Eli of the assignment. A week later, Martin assigns the same claim to Allen. Allen immediately notifies Eli of the assignment. Jack
has priority to payment in all states.
has priority to payment in states that follow the English rule.
does not have priority to payment in any state.
has priorty to payment in most states.
Explanation / Answer
1. The answer is - an incidental beneficiary. In the case, Delta Building Supplies is a third party. The contract was entered between Four Square and Ben. The contract is not intended to benefit the third party i.e Delta. As Delta does not have any legal rights in the contrcat between Four Square and Ben, it is an incidental beneficiary.
2. The answer is - will be in breach of contract when he fails to pay Sybil on May 1. Rocko cannot use the excuse of objective impossibility. Objective impossibility means that the situation is such that Rocko cannot possibly pay $1,000. If its not possible to draw cash from bank, cash can be drawn from an ATM machine. The payment can even be made by cheque, as there is no specific mention of cash payment. So there is a breach of contract.
3. An assignment of claim is an authorization to make the payment to a third party. As per law, debtor has to pay the assignee only if it has received a written notice either from the asignor (Martin, in this case) or the asignee (Jack, Allen). Allen, as the assignee, had notified that debtor - Eli. Jack did not do so. So the answer is - does not have priority to payment in any state.
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