Contracts Outline
This outline covers the fundamental principles of assignment and delegation in contract law, including rules, tests, and key case law.
Assignment refers to the transfer of a party's rights under a contract to a third party. Generally, a party may assign their contractual rights unless the assignment would materially change the duty of the obligor or is prohibited by the contract itself. The assignor retains the obligations until they are fully performed, and the assignee gains the benefits that the assignor had under the contract. Valid assignments require clear intent, and assignments can be either absolute or conditional.
In determining the legality of an assignment, courts will look for the intent of the parties and whether the assignment contravenes any specific provisions of the original contract. If a contract includes an anti-assignment clause, the assignment may be invalidated unless the party receiving the assignment agrees to the assignment regardless. Common law generally favors the assignability of contracts, as long as the original terms are respected.
Delegation, on the other hand, involves the transfer of duties under a contract from one party to another. Unlike assignment, delegation does not relieve the delegator of their obligations; both the delegator and the delegate remain liable unless released from liability by the obligee. Delegation is typically permissible unless: 1) it is expressly forbidden by the contract, or 2) the duties are non-delegable because they are of a personal nature or require specific skills that only the original party possesses.
In assessing the validity of a delegation, courts will evaluate whether the delegate is capable of fulfilling the obligations under the contract. As a general rule, contracts that require trust or confidence cannot be delegated, emphasizing the importance of personal qualities in the arrangement. Regardless of legality, the delegator remains ultimately responsible for performance unless the obligee agrees to release them.
Understanding the distinctions between assignment and delegation is crucial in contract law. The key difference lies in what is being transferred: assignment deals with rights, while delegation concerns duties. Additionally, assignment typically releases the assignor from obligations to the contract while delegation does not release the delegator from their duties. In contractual situations, parties should clearly define their rights and responsibilities concerning assignments and delegations to avoid breaches and disputes.
Additionally, the lack of mutual consent from the original parties can lead to disputes following an assignment or delegation. Therefore, parties should consider establishing thorough communication before proceeding with either action to preserve contractual relationships.