Explain the rules governing assignment and delegation, and the obligations of the obligor after delegation?

Explain the rules governing assignment and delegation, and the obligations of the obligor after delegation?

• A. Rights may be assigned unless restricted; duties may be delegated; the obligor remains liable to performance; a non-assignment may exist
• B. Assignment is prohibited; delegation releases the obligor
• C. Delegation requires the consent of the obligee
• D. The obligor is discharged from liability upon delegation

Answer: (A)

Assignment and delegation separate transferring a right from transferring a duty. A contract right to receive performance or payment can usually be assigned to another party unless the agreement or law blocks assignment or the assignment would materially change the duty or risk for the other party. The person who owes the performance—the obligor—generally does not need the obligee’s consent for the assignment to take effect. Delegation moves the responsibility to perform to another party, and this is typically allowed unless the contract forbids delegation or the duty involves personal service, specialized skills, or trust. Importantly, delegating a duty does not automatically release the original obligor from liability. If the delegatee fails to perform, the obligee may sue the original obligor for breach unless there is a novation or some release of liability. A novation—where the obligee agrees to substitute the new promisor and releases the original obligor—discharges the former party. There can be cases where assignment is not permitted at all, reflecting restrictions that may exist in the contract or by law. Summarizing, rights may be assigned unless restricted; duties may be delegated; the obligor remains liable to perform after delegation, with discharge only arising from novation or explicit release.

Assignment and delegation separate transferring a right from transferring a duty. A contract right to receive performance or payment can usually be assigned to another party unless the agreement or law blocks assignment or the assignment would materially change the duty or risk for the other party. The person who owes the performance—the obligor—generally does not need the obligee’s consent for the assignment to take effect.

Delegation moves the responsibility to perform to another party, and this is typically allowed unless the contract forbids delegation or the duty involves personal service, specialized skills, or trust. Importantly, delegating a duty does not automatically release the original obligor from liability. If the delegatee fails to perform, the obligee may sue the original obligor for breach unless there is a novation or some release of liability. A novation—where the obligee agrees to substitute the new promisor and releases the original obligor—discharges the former party.

There can be cases where assignment is not permitted at all, reflecting restrictions that may exist in the contract or by law. Summarizing, rights may be assigned unless restricted; duties may be delegated; the obligor remains liable to perform after delegation, with discharge only arising from novation or explicit release.