Contracts · Assignment Delegation

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MBE Contracts: Assignment Delegation

A comprehensive overview of assignment and delegation principles in contract law as tested on the MBE.

Overview

Assignment of rights and delegation of duties are fundamental concepts in contract law. An assignment is the transfer of rights under a contract, while delegation involves the transfer of duties. Under the Restatement (Second) of Contracts, unless expressly prohibited by the contract, an assignment of rights can occur without consent, whereas delegation of duties typically requires consent. The distinction between assignable and non-assignable rights, as well as delegable and non-delegable duties, often becomes pivotal in MBE questions, as it impacts the original party's liability and the rights of the third party involved.

Exam questions may test candidates on the validity of assignments and delegations, required forms, and the implication of invalid transfers. Additionally, the legal consequences of a holder of an assigned right or delegated duty failing to perform can form the basis of complex questions that require nuanced understanding. It is crucial to recognize the specific contractual provisions that can affect assignment and delegation, as well as the effect on the original obligor when obligations are delegated and the potential for third-party beneficiaries.

Key Rules
  1. An assignment of a right does not require the consent of the obligor unless the contract prohibits it.
  2. A delegation of duty generally requires the consent of the obligee unless the contract states otherwise.
  3. The assignee takes subject to any defenses that the obligor may assert against the assignor.
  4. An assignment that is for consideration is irreversible; an assignment for no consideration may be revoked.
  5. Certain rights, such as those requiring personal performance or that are governed by public policy, are non-assignable.
Common Question Patterns
  • Determine whether a particular assignment is valid under the terms of the contract.
  • Analyze if a delegation of duties is appropriate and what conditions apply.
  • Evaluate the rights of an assignee when the obligor asserts defenses.
  • Examine the effects of prohibitory clauses on assignment and delegation.
Practice Questions

1. Seller has a contract to sell a car to Buyer. Seller later enters into an agreement with Friend to assign his rights to receive payment from Buyer to Friend without requesting Buyer's consent. Is this assignment valid?

A. A) Yes, the assignment is valid because it does not require consent.(Correct)

B. B) No, the assignment is invalid because it requires Buyer's consent.

C. C) Yes, but Buyer can assert any defenses against Friend.

D. D) No, the contract specifically prohibits assignments.

Explanation: The assignment is valid because, under general rules, an assignment typically does not require the consent of the obligor unless explicitly stated in the contract.

2. Owner has a service contract with Contractor for home renovations. Owner delegates her duty to pay Contractor to her friend. Is this delegation valid?

A. A) Yes, because all duties are delegable.

B. B) No, because payment duties are personal and cannot be delegated.(Correct)

C. C) Yes, unless the contract prohibits delegation.

D. D) No, because Owner did not inform Contractor.

Explanation: The duty to pay is generally personal, and obligations that require personal judgment or skill cannot typically be delegated.

3. If an assignor assigns a right to receive payment for a debt but is subsequently sued for non-payment by the obligor, which statement is true?

A. A) The assignee is liable.

B. B) The assignor is not liable.

C. C) The obligor cannot raise defenses against the assignee.

D. D) The assignor is liable despite the assignment.(Correct)

Explanation: The assignor remains liable for the performance unless the assignor is explicitly released from the duty, so the obligor can still assert defenses against the assignor.

4. A contract states that 'no rights in this contract may be assigned without the consent of both parties.' If Party A assigns its rights to Party B without Party C's consent, what is the status of the assignment?

A. A) Valid, because Party C cannot refuse consent.

B. B) Invalid, because the contract requires consent.(Correct)

C. C) Valid if done for consideration.

D. D) Invalid, but Party C can choose to accept it later.

Explanation: The assignment is invalid because the contract clearly prohibits assignment without the consent of both parties.

5. Alice has a lease with Bob which states she cannot assign the lease without Bob's written consent. Alice is in financial trouble and assigns the lease to Carol without obtaining consent. What is the outcome?

A. A) The assignment is valid because it is for a financial emergency.

B. B) The assignment is valid unless Bob objected.

C. C) The assignment is invalid and Bob can evict Carol.(Correct)

D. D) Bob must accept Carol as a tenant.

Explanation: The assignment is invalid because it violates the contract clause requiring Bob's written consent, allowing him to evict Carol.

Test-Taking Tips
  • Carefully read the question to identify if the assignment or delegation requires consent.
  • Understand the differences between rights and duties, and when each is assignable or delegable.
  • Look for contractual language that can modify typical rules regarding assignment and delegation.
  • Be prepared to apply rules regarding defenses that can affect an assignee's rights.
  • Note whether the facts indicate consideration is involved as this can affect the validity of an assignment.

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