Assignment Of Rights And Delegation Of Duties

Def

"Assignment" is the transfer of rights under a contract, and "delegation" is the transfer of duties and obligations under a contract.

novation may be express or implied after delegation if

(i) the original obligor repudiates liability to the original promisee and (ii) the obligee subsequently accepts performance of the original agreement from the delagatee without reserving rights against the obligor

Limitations on Assignment

Almost all contract rights can be assigned. Partial assignments are permissible, as is the assignment of future or unearned rights An assignment is not allowed, however, if it materially increases the duty or risk of the obligor or materially reduces the obligor's chance of obtaining performance

Effect of Assignment of Contract

An assignment of a contract that is not limited to contractual rights (e.g., "this contract is assigned to") is typically treated as both an assignment of rights and a delegation of duties

Effect on Other Party to the Contract

Any delegation of performance under a contract for the sale of goods may be treated by the other party as creating reasonable grounds for insecurity. UCC§2-210(5). The other party may, without prejudice to his rights against the delegator, demand assurances from the delegatee

Requirements

No formalities are needed for an assignment, but there must be a present intent to transfer the right immediately. No consideration is needed, but the lack of consideration would affect revocability of the assignment.

Novation

Substituting a new obligation for an old one or substituting new parties to an existing obligation

Acceptance by the delegatee of a delegation

constitutes a promise to perform those duties. That promise is enforceable against the delegatee if the delegatee has received consideration or there is a consideration substitute that makes the promise enforceable.

Effect on Delegator

delegator is not released from liability, and recovery can be had against the delegator if the delegatee does not perform, unless the other party to the contract agrees to release that party and substitute a new one (a novation). Merely consenting to a delegation does not create a novation

Assignment for Consideration

irrevocable

Gratuitous Assignment

no consideration supports the assignment (a gratuitous assignment), then it will generally be revocable, unless the obligor has already performed or promissory estoppel applies

Delegation of Duties

not permitted when a party to the contract has a substantial interest in having the delegating party perform (for example, in a personal services contract involving taste or a special skill), or the delegation is prohibited by the contract

Rights of Assignee

takes all of the rights of the assignor as the contract stands at the time of the assignment, but she takes subject to any defenses that could be raised against the assignor