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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)

Post Author: Stacy Bauer

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