Contracts - Assignment of Rights & Delegation of Duties

Question 1

What is an assignment?

Answer 1

It is a transfer of a right to receive a performance under a contract

Question 3

How do you make an effective assignment?

Answer 3

The assignor (owner of the right) must:

1. first manifest an intention to
2. make a present transfer of an existing right not a future right

Question 4

What rights can be assigned?

Answer 4

Generally all rights are assignable subject to 4 exceptions:

1. If the assignment would materially alter the risk or obligationsof the other party.
2. When the obligor has a personal interest in rendering the performance in question to the obligee & not a 3rd pty
3. When it would violate applicable law or public policy
4. When the assignment is prohibited by the contract
   
   • NOTE - most courts will treat this as a breach of contract by the assignor but not a basis for nullifying obligee’s rights

Question 5

How is an assignment of value different from a gratuitous assignment?

Answer 5

An assignment of value is:

• valid against the obligor AND
• cannot be revoked by the assignor

Gratuitous Assignment

• Between assignee & obligor
  
  • it is valid against the obligor who cannot claim lack of consideration as a defense
• Between assignor & assignee
  
  • Under the law of gifts, an executory gift is revocable but an executed gift is not a gift is executed when there is intention coupled with actual or symbolic delivery

Question 6

What rights does the assignee have against the obligor after assignment?

Question 7

What rights does the assignee have against the assignor after assignment?

Question 8

When does a delegation of duty occur?

Answer 8

When a 3rd party agrees to satisfy a performance obligation owed by one of the parties to a contract

Question 9

What rights does the obligee have against the delegator?

Answer 9

Different from an assignment in which an assignor transfers rights under the original K to the assignee.

In a delegation it does not operate as a transfer of duties from the delegator to the delegatee UNLESS:

• Absent a novation, a delegation does not releave the delegator from his obligations under the contract
  
  • obligee can still sue the delegator
  • Novation - all agree to substitute

Question 10

What liabilities does the delegatee have?

Answer 10

To the delegator

• if the delegation was for consideration the delegator has a breach of contract action against the delegatee if he does not perform

To the obligee

• If the delegation was for consideration, the oblige can bring an action against the delegatee as an intended 3rd pty ben. of the delegation

Question 11

What dutues are delegable?

Answer 11

Generally all contractual duties are delegable.

EXCEPT:

• When the performance in question is personable
• When the contract prohibits delegation