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Which rights can be assigned, and which duties delegated?
All rights can be assigned unless:
- A statute expressly prohibits assignment
- The contract is for personal services
- The assignment will materially alter the obligor’s risk or duties
- The contract prohibits assignment
All duties can be delegated unless:
- Performance depends on the obligor’s personal skills or talents, or special trust has been placed in the obligor
- Performance by a third party will materially vary from that expected by the obligee
- The contract prohibits delegation
What if the contract prohibits assignment or delegation?
No rights can be assigned except:
- Rights to receive funds
- Ownership rights in real estate
- Rights to negotiable instruments
- Rights to damages for breach of a sales contract or payments under a sales contract
No duties can be delegated
What is the effect on the original party’s rights?
- On a valid assignment, effective immediately, the original party (the assignor) no longer has any rights under the contract
- On a valid delegation, if the delegatee fails to perform, the original party (the delegator) is liable to the obligee (who may also hold the delegatee liable)