Assignment and Delegation Flashcards
The difference between assignment and delegation is…
Assignment = transfer of RIGHTS under K
Delegation = transfer of DUTIES under K
How to tell b/t a third party contract and assignment?
Two steps in assignment:
1) The formation of a contract; and
2) The transfer of the benefits of the contract from an original counterparty to some third party
True or false: In most situations, contract benefits may not be assigned
False. Almost all contract benefits can be assigned, in whole or in part, unless the contract expressly prohibits/invalidates assignments.
What is the difference between a prohibition vs. invalidated assignment?
prohibition—the assigning party has breached when he makes the assignment, but the third party can still recover from the guarantor. The power to assign persists, even if the right to assign does not.
invalidation—the third party cannot recover because there is no power or right to assign.
What happens if someone assigns the same rights twice?
It depends on whether the assignee has paid consideration for the rights:
No consideration: the assignment is generally revocable and the last assignment controls
Yes consideration: the first assignment for consideration is typically irrevocable and will hold.
What is the exception to assign the same rights twice and consideration?
Limited exception: A later assignment will take priority if the second assignee does not know of the initial assignment and is first to obtain payment or a judgment (i.e., a bona fide purchaser for value without notice).
When is delegation appropriate?
As long as the contract does not prohibit delegation and
As long as the other party does not have some special interest in having a specific individual perform.
Is a delegatee liable for breach?
- A delegatee is generally not liable for breach unless she receives consideration from the delegating party
