Part E--Rights, Duties, etc.

Question 1

Assignment

Answer 1

Transfer of a right to receive performance

Also can be used as catch-all–“assignment” of contract includes duties too

Question 2

Parties involved in Assignment vs. Delegation

Answer 2

Assignment: obligor, assignor, assignee

Delegation: Obligee, obligor/delegator, delegatee

Question 3

Assignor

Answer 3

Party that assigned right to get performance to someone else

Question 3

Obligor

Answer 3

Party with obligation to perform

Question 4

Assignee

Answer 4

Party right was assigned to–now has right to get performance

Question 5

Requirements for Assignment

Answer 5

1) Original right holder manifests intention to presently transfer right currently has without any further action required
AND
2) Assignee manifests assent

Question 6

Exception to Assent Req. for Assignment

Answer 6

1) Consideration given for assignment/right
OR
2) Assignment irrevocable by virtue of delivery of writing

Question 7

Non-Assignable

Answer 7

1) Materially alter risks or obligations of person w/ duty to perform (obligor)
2) Obligor has personal interest in rendering performance to obligee specifically (ex. perform personal services,(ex. photography) for someone other than obligee)
3) Law or Public Policy
4) Prohibited by contract (must be explicit/clear–strict construction)

Question 8

Remedies for assignment against contract

Answer 8

Breach damages–but not removal of duty to perform

Question 9

Clause barring “assignment of the contract” (verbatim) =

Answer 9

1) Bar delegation of duties
2 DOES NOT bar assignment of rights
3) N/A re: rights assignor (person w/ original right) gets only if obligor (person w/ duty) breaches contract
4) N/A re: rights assignor (person w/ original right) gets upon complete performance of assignor’s duty (ie if I do x performance, I get z right)
5) Clause can be used as defense by person w/ performance responsibility but not by assignor when assignee sues

Question 10

Assignment v. Delegation

Answer 10

Assignment = rights
Delegation = duties

Question 11

Assignment for Value

Answer 11

Person getting rights (assignee) provides consideration

Valid vs obligor (person w/ duty)

Question 12

Revocation of assignment for value

Answer 12

Assignor (person assigning) can’t revoke
Can modify (+ presumably revoke) w/ consent of all parties

Question 13

Gratuitous Assignment

Answer 13

Assignor gives contract rights without consideration

Binding against obligor (person w/ duty)–no consideration req.

Question 14

Revocation of gratuitous assignment

Answer 14

CANNOT REVOKE IF:

1) law of gifts–donative intent AND delivery

2) Payment of obligation made to assignee (becomes binding)

3) Estoppel–reliance of assignee (person getting rights) to his/her detriment

Question 15

Right of setoff

Answer 15

Fill in once figure out what right of setoff is

Question 16

Can obligor preemptively waive ability to invoke defenses v. potential assignee?

Answer 16

Yes, EXCEPT
1) “Real defenses” (ex. i) infancy’ ii) incapacity; iii) fraud; iv) duress if prevents capacity to consent; v) bankruptcy; vi) discharge of duties assignee has reason to know of

2) Obligor is buyer or lessee of commercial goods

Question 17

Assignor (person bestowing right) warrants that

Answer 17

1) No knowledge of fact reducing value of assignment + won’t act to do so

2) Right actually exists + no hidden non-apparent limitations or defenses

3) If got assignee to sign b/cause gave writing talking about the rights, writing genuine (ex. I have right to collect, see, here’s the contract)

Question 18

Rights of Assignee v. Obligor (person w/ duty)

Answer 18

“Steps into shoes” of person w/ orig. right–same rights and same vulnerability to defenses

Question 19

Rights of Assignee v. Assignor (person giving right)

Answer 19

-Implicit warranties true
-Won’t give same right to multiple assignees (prior or subsequent)

Question 20

Successive Assignees–Majority

Answer 20

Assignor liable to both assignees–but
if assignor bankrupt or fled, first person to get assigned right gets it if both demand from obligor (person w/ duty)

Question 21

Successive Assignees–Minority

Answer 21

Generally 1st in time, but 2d in time gets if
1) Got payment from person w/ duty OR
2) Got judgement on debt OR
3) Makes own new contract with obligor (person who owes duty) OR
4) Contract requires assignor deliver x token/writing + got

Question 22

Non-Delegable

Answer 22

1) Performance is personal AND recipient relies on the exercise of the other person personal qualities, like judgement, skill, character, reputation, taste (even if duty delegated to someone else who is also talented)

2) Contract bars delegation

Question 23

“Contract” “assigned” to another

Answer 23

Generally–assume person has both assigned all rights and delegated all duties (unless non-assignable/non-delegable)

Question 24

Assignment in violation of contract

Answer 24

= breach of contract and can sue for damages–but doesn’t relieve the obligor/person w/duty’s performance obligation to assignee

Question 25

Article 2 UCC “real defenses”

Answer 25

1) Infancy,
2) Other incapacity that voids contract
3) Fraud
4) Duress/no capacity to contract
5) Bankruptcy
6) Other discharge assignee has reason to know of

Question 26

Delegation

Answer 26

Agreement to transfer performance obligation owed–third party agrees to satisfy

Question 27

Rights of Obligee (person to whom duty owed) v. Delegator

Answer 27

Original delegator still has duty to perform + liability, despite delegation of duty

Exception: novation

Question 28

Novation

Answer 28

Cancels duty of delegator/original person w/ duty in favor of delegatee

MUST HAVE: clear promise by obligee/person to whom duty owed that releasing delegator in return for the liability of delegatee

Question 29

Duty of Delegatee to Delegator

Answer 29

Liable to delegator if fail to perform delegated duty

Question 30

Duty of Delegatee to Obligee (right holder)

Answer 30

Liable to obligee as well as delegator because obligee third-party beneficiary

Question 31

Delegation in violation of contract

Answer 31

Enforceable breach–and can enforce requirements of contract

Question 32

Delegation of non-delegable duty

Answer 32

Common law = attempt –> Immediate breach, immediate right to sue

Question 33

Delegation of duty (UCC)

Answer 33

Any delegation of performance can be reasonable grounds for insecurity–other party has right to demand adequate assurances from assignee, without affecting his rights against the original party