Assignment: The Transfer Of Contractual Right To A Third Party

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Chapter 16 outline

ASSIGNMENT AND DELEGATIONS
Assignment
Assignments----The transfer of contractual “right” to a third party.
Delegations----The transfer of contractual “duties” to a third party. * Both assignments and Delegations occur after the original contract was made.
Terminology and the effect of an assignment
Assignor--------The party “assigning the rights” to a third party.
Assignee--------The third party “receiving the right”. * The assignee (third party has the right to demand performance from the original party). 213. _F___ In a contract of suretyship, the surety/ assignee is secondarily liable on an obligation and becomes primarily liable only when the debtor cannot pay the debt.

Obligee---------The person to whom a duty or obligation is owed.
Obligor---------The person who is obligated to perform the duty.

Right assigned are subject to the same defense * Right assigned are subject to the same defense for obligor against the assignor. The assignor does not have the right to misrepresent an item for money to get revenge from assignee. If he does so, assignee can raise a defense for the assignor of fraudulent misrepresentation to avoid payment.
Form of the assignment * The form of the assignment can be either oral or written; but a written one is preferred. 216. _T___ A contract of suretyship must be in writing to be enforceable Rights that cannot be assigned * When a statute prohibits assignment * A state statute prohibits the assignment of future workers’ compensation benefits, and thus such rights cannot be assigned. * When a contract is personal in nature * A personal service contract cannot be assigned unless all that remain is a monetary payment. * When an assignment will significantly change the risk or duties of the obligor. * An insurance policy cannot be assigned to a third party which is the assignee. The assignment will not operate to give the third party any right against the insurance. * When the contract prohibits assignments. * A contract cannot prevent an assignment of the right to receive fund. * The assignment of rights in real estate often cannot be prohibited. A prohibition of this type is called restraints against alienation.
Alienation------The transfer of land. * The assignment of negotiable instruments cannot be prohibited. * Contract for the sale of goods may be assigned even though the sale contract prohibits such an assignment
Notice of assignment * When the assignee give notice to the obligator. If the assignee already paid and notified the obligator, the assignee is keeping the obligator from losing his money if he wasn’t aware of it.

Delegations * Duties are not assigned, they are delegated.
Delegator---- The party making the delegation of the obligation to perform.
Delegatee----The party to whom the duty has been delegated.
Duties that cannot be delegated * When the duties are personal in nature * The delegate cannot delegate a third party to perform a personal performance contract. The delegation is not effective without the delegator approval. Ex: the surgeon delegates another surgeon to while she take a vacation. * None-personal duties may be delegated. * When performance by a third party will vary materially from that expected by the obligee. * When the contract prohibits delegation. * One cannot delegate another to perform the duty
Effect of a delegation * If the delegatee fail to perform, the delegator is still liable to the obligee, as well as the delegatee. The obligee can sue both delegatee and delegator.
Question 225. __T___ A guarantor is secondarily liable on an obligation.

Assignment of all rights * This word creates both an assignment of rights and delegation of duties.

THIRD PARTY BENEFICIARIES
Intended third party beneficiary -----
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