An enforceable agreement occurs when there is an offer, acceptance of that offer, and consideration. Common law universe governs ___ real estate or services UCC governs _____ Goods Ucc governs all parties not just___ Merchants 4 big elements to see if enforceable contract formed Agreement, Consideration, Defenses, Statute of Frauds An offer is: a manifestation of a willingness to enter into an agreement (offeror) that creates a Power of acceptance(in the offeree) Offeror must display an _____ to be bound Objectively serious, present intent a statement is an offer only if the person to whom it is communicated could reasonably interpret it as an offer. An offer must usually be directed to a ____offerree. (Can't accept unless directed at you) Specific Except: contest offers or reward offers that promise something to anyone who accomplishes a certain task Common law offeer- elements Parties Subject Price Quantity Ucc offer- elements: Parties Subject Quantity [Note: no price, UCC more willing to plug the gaps] " I don't know how many I need over the next Xyears, but I promise to buy all of them from you "Requirements contract example: I don't know how many I will make over the next XXX years, but I promise to sell all of them to you "You'd better decide fast if you want to buy my house, as I expect to have a ton of offers next week." Is this an offer? Why/why not? No. This is an invitation to deal that reserves additional approval with the speaker. Other side cannot say "I accept"and know for a fact that deal is concluded The offeror can revoke the offer by ( 6 types): 1. express communication to the offeree 2. Offeree learns that the offeror has take an action absolutely inconsistent with a continuing ability to contract (Constructive revocation) 3. Offeree rejects 4. Offeree makes counteroffer 5. Offeror dies 6. Reasonable about of time passes Four irrevocable offers: 1. option 2. firm offer 3. offeree has started performance 4. detrimental reliance irrevocable offer- option hypo: I offer to sell you my house for $1 mil. You also pay me $100 in exchange for a promise that I will not revoke this offer for one week. Five minutes later I say "Never mind..I revoke the offer!" Can you still accept? Yes irrevocable offer- firm offer elements (MWES90) 1. A merchant (someone who makes a business out of buying or selling goods at issue) 2. makes offer in writing 3. with explicit promise not to revoke 4. signed by the merchant 5. duration of reasonable time not to exceed 90 days firm offer: a merchant's signature could be a handwritten memo on merchant's letterhead. Key is authentication, not necessarily "signature." UCC offer: if no price, UCC will make the price under the K a reasonable price at the time for delivery. UCC offer: only term that cannot be supplied by the court is ____, which must be certain or capable of being made certain. quantity irrevocable offer- firm offer- hypo:Your law school bookstore offers to sell yo ua contracts textbook for $100 and it promises via a signed writing not to revoke this offer for one week. 10 dyas later, you stop by the bookstore to accept the offer. Can you still accept? Why/not? Yes. As long as a reasonable amount of time has not squashed the deal irrevocable offer: offeree has started performance. RULE: a unilateral offer to contract cannot be revoked by the offeror if the offeree has started performance unilateral contract: definition: arises from a promise that requests acceptance by an action of the promisee (vs. return promise) unilateral contract: promisee has the right to finish and right to stop at any time irrevocable offer: detrimental reliance: RULE: an offer cannot be revoked if the offeree reasonably and detrimentally relies on the offer in a foreseeable manner [NOTE: look for GC/subcontractor context] acceptance is a manifestation of a wllingness to enter into the agreement by the offeree and is governed by the objective test UCC offer/acceptance: If seller tries to accept by shipping the wrong goods, UCC treats this as acceptance PLUS breach UCC offer/acceptance: if seller "seasonably notifies the buyer that the nonconforming goods are tendered as an accommodation, then no acceptance has occurred and no K has formed. UCC offer/acceptance: accommodation is deemed a counteroffer. Buyer may then either accept (thereby forming a K) or reject (no K formed) UCC offer/acceptance: if buyer requests that goods be shipped, the buyer's request will be construed as inviting acceptance by the seller either by a promise to ship or by prompt shipment of conforming or nonconforming goods. mailbox rule: an acceptance sent by mail is valid when the letter is sent mailbox rule does not apply: when the offeree sends something else first to other types of communication (e.g. revocations, rejections) to options contracts NOTE: unclear if applies to other media (fax, email) mailbox rule hypo:I send you an offer. You mail back a rejection. You change your mind and mail back an acceptance a few hours letter. Both letters arrive at my house on the same day. Is there a contract? Depends on what's opened first (this is an example of mailbox rule not applying because "something else," a rejection, was sent first. There may be acceptance without communication if there is a past history of silence service as acceptance (e.g. offeree should reasonably notify the offeror if she does not accept) May be implied-in-fact contract that communicates acceptance through gestures or actions (e.g. at a salon) common law: mirror image rule: Terms in the acceptance must match the terms of the offer exactly. Otherwise, it is not an acceptance but a counteroffer Conditional acceptance is a counteroffer Conditional acceptance hypo: I offer to mow your law on Saturday for $50. You say, "OK if you come over Sunday." A contract? NO UCC counteroffer: §2-207 (1) rule - definite expression of acceptance [or written confirmation]; - sent within a reasonable time - is acceptance even if additional or different terms from offer UNLESS - acceptance expressly made conditional upon assent to additional/different terms UCC counteroffer: §2-207 (2): new term b/w 2 merchants in the purported acceptance may not control if [4 elements]: [MEO] 1. new term materially alters the deal OR 3. initial offer expressly limits acceptance to its terms OR 4. offeror objects within a reasonable time to the new term. terms that materially alter an agreement: warranty disclaimer, a clause that flies in the face of trade usage with regard to quality, a requirement that complaints be made in an unreasonably short time period; arbitration clause, and terms that surprise or create hardship without express awareness by the other party terms that usually do not materially alter the contract: fixing reasonable times for bringing a complaint, setting reasonable interest for overdue invoices, reasonably limiting remedies. different terms: most jurisdictions apply knock out rule: different terms in the offer and acceptance nullify each other and are knocked out of the contract. When there are gaps, the court uses Article 2's gap-filling provisions to patch the holes Very difficult for new terms in the acceptance to govern the contract If there is not a real contract but the parties act as if there is an agreement (e.g. by exchanging goods for money) only the terms that both writings agree on become part of the contract, with other terms supplied by the UCC acting as default rules If verbal agreement and one party sends confirming memo with additional terms that go further than the earlier agreement, the new terms rarely come in most courts require valuable consideration for an agreement to be enforceable. valuable consideration: a bargained for change in the legal position between the parties most courts conclude consideration exists if there is a detriment to the promisee irrespective of the benefit to the promissor consideration can take the form of (4 types): 1. a return promise to do something 2. a return promise to refrain from doing something legally permitted 3. the actual performance of some act OR 4 refraining from doing some act the promise of a charitable donation is enforceable only if (Second Restatement): - promise in writing - charity relied on the promise (detrimental reliance/promissory estoppel) Steps to determine if bargained for consideration exists 1. Who is making the promise that needs to be supported by law 2. Is there a benefit to the promisor OR a detriment to the promisee? 3. Was this bargained for (i.e. parties think they were making a deal?) Consideration hypo: You are trying to win a race to Alcatraz, when the sharks start to circle. I swing my boat over to pick you up. Grateful, you promise to pay me $500 for the rescue. Is there bargained for consideration? Why/not? No. Past consideration is not consideration Preexisting duty rule (common law): a promise to do something that you are already legally obligated to do is not consideration preexisting duty rule (common law): exceptions. There is consideration when a contract is modified if: - there is a change in performance (e.g. promisor gives something in addition to what is already owed or varies the preexisting duty in some way) - a third party promises to pay - unforeseen difficulties would excuse performance To determine if partial payment for release of a debt obligation is binding, ask: 1. Is debt currently due and 2. undisputed? If yes, modification is NOT binding Under UCC, if modification made in good faith, it is binding even without new consideration UCC and consideration: good faith requires honesty in fact and, in the case of a merchant, fair dealing with reasonable commercial standards even if no consideration, contract could be enforced if promissory estoppel, quasi-contract, or moral obligation with a subsequent promise promissory estoppel: 3 elements: 1. a promise is made that would be reasonably expected to induce reliance 2. the promise does indeed take detrimental action in reliance on the promise; and 3. injustice can be avoided only by enforcement of the promise quasi contract elements 1. plaintiff confers a measurable benefit on the defendant 2. P reasonably expected to get paid AND 3. it would be unfair to let D keep the benefit without paying defense to contract formation: misunderstanding: basic definition/elements 1. the parties use a material term that is open to two or more reasonable interpretations (So the objective test cannot apply) 2. each side attaches a different meaning to the term 3. neither party knows, or should know, of the confusion defense to contract formation: incapacity: who lacks it? 1. minors (under 18) 2. the mentally ill: i. person cannot understand the nature and consequences of his actions or ii. the person cannot act in a reasonable manner in a relation to the transaction 3. very intoxicated persons, IF the other side knows this where a guardianship over an individual’s property has been recognized by a court, the seller’s lack of actual knowledge of the guardianship or the individual’s inability to contract is irrelevant if make a contract with person who lacks capacity, the contract is voidable (incapacitated party can disaffirm) For necessities, the party without capacity must still pay fair value for the necessity (e.g. food, clothing, shelter) a party without capacity can ratify the deal by keeping the benefits of the contract after capacity is obtained defense to contract formation: mistake: basic definition/elements A belief that is not in accord with a present fact defense to contract formation: mutual mistake: basic definition/elements there is a mistake of fact, existing at the time the deal is made; the mistake relates to a basic assumption of the contract and has a material impact on the deal; and the impacted party did not assume the risk of mistake defense to contract formation: unilateral mistake: basic definition/elements one party is mistaken and 1) can prove all the elements of mutual mistake 2) mistake would make the contract unconscionable, or 3) the other side knew of, had reason to know of, or caused the mistake defense to contract formation: misrepresentation: basic definition a statement at the time of contracting that is not true. -It can be intentional (Fraudulent) or accidental defense to contract formation: misrepresentation: elements- to assert party must show: - a misrepresentation of a present fact (not opinion); - that is material OR fraudulent (intentional); AND - that is made under circumstances in which it is justifiable to rely on the representation defense to contract formation: fraud in the execution: basic definition to trick someone into signing something that she doesn't know is a contract defense to contract formation: nondisclosure: basic definition The other party doesn't learn the truth about something, but you just remain quiet. -Normally, ok but may be defense if there is a special fiduciary relationship or active concealment defense to contract formation: duress: basic definition and types an improper threat that deprives a party from making a meaningful choice to contract - economic duress: one party makes threats to induce another party to contract or modify a contract. - undue influence: a party puts very intense sales pressure on another party- who often seems weak minded or susceptible to high-pressure sales tactics. duress makes contract voidable, but not automatically void defenses to contract formation: if person withdraws from the illegal conduct, may recoup whatever loss from the transaction defense to contract formation: illegality: illegal contract are unenforceable, but a contract entered in furtherance of an illegal act (that is not itself illegal) will still be enforced (e.g. cab drive to complete a hit) defense to contract formation: against public policy: basic definition not formerly illegal but present some other policy concern defense to contract formation: unconscionability: 2 types: 1. procedural- a defect in the bargaining process itself, such as a hidden term or an absence of meaningful choice 2. substantive- a rip-off in some term of the contract defenses to formation: The purchaser of an annuity contract assumes the risk that the person on whose life the annuity is based will die before the price paid for the annuity is recouped, and the issuer of the L assumes that the person will live beyond the recoupment date. Statute of Frauds: goal is to prevent false assertions about a contract that never really created SOF applies to only these types of contracts: [MSOUR] Marriage: a contract made in consideration of marriage (e.g. prenup) Suretyship: contract promising to guarantee the debt of another One year: contract that by its terms cannot be performed within one year from its making UCC: goods contracts for a price of $500 or more real property: contract for the sale of an interest in real property SOF: main purpose exception if the main purpose in agreeing to pay the debt of another is for the surety's own economic advantage, not SOF! SOF: one year rule: the question is whether there is ___ no possible way that the contract could be performed within one year SOF: one year rule: hypo: I contract on April 1 to hir a 1L student as my RA for three months during her 2L summer. SOF world? Yes. Only three months, but will start after one year SOF: one year rule: hypo: William Shatner hires me to teach him contract law for the rest of his life. SOF? No. It's possible Shatner dies within one year SOF: two ways to satisfy: 1. performance 2. a writing SOF: satisfy by services: hypo: Shatner verbally agrees to hire Spock to build a house on Enterprise Acre estate. In exchange, Shatner will provide "charm lessons" to Spock for the next 3 years. SOF world? Yes. Charm lessons will not be complete in one year SOF: satisfy by services: hypo: Same facts as before. Spock builds the house, Shatner refuses to provide the lessons, asserting Statute of Frauds defense. Shatner right? Why/not? No. Full performance of a services contract by either side satisfies SOF. Spock fully performs his end of services contract, so SOF satisfied SOF: satisfy by writing: Requirements: - Indicate a contract has been made - Identify the parties - Contain the essential elements of the deal NOTE: Both signatures not necessary. Writing does not have to be a formal contract SOF: part performance of a real estate contract CAN satisfy the SOF if any two of three elements met: 1. Possession 2. Payment 3. Improvements on the land SOF: $500 goods: contract is only enforceable under SOF for the quantity mentioned SOF: goods: must be signed by the party against whom enforcement is sought SOF: goods: part performance on a goods contract satisfies SOF, but only for the quantity _____ and _____. delivered and accepted SOF: goods: Custom-made goods (or specially manufactured goods) are exempted from the SOF as soon as maker takes a substantial beginning toward the manufacturing of the goods. SOF: goods: the failure to object to a confirming memo within 10 days will satisfy SOF IF both parties are merchants SOF: modification: If initial deal in SOF world but modification isn't, modification doesn't have to satisfy SOF requirements. If modification SOF world, must satisfy SOF requirements PER: evidence of oral or written statements PRIOR TO CONTRACT FORMATION barred by the court PER: if an extrinsic term of the agreement would "naturally be omitted" from the writing, may not violate PER and can be introduced as evidence if it does not contradict the writing PER: UCC: presumes writing is at most only partially integrated unless the parties would have certainly included a disputed term in the writing PER: evidence of these three things can be admitted in court even if final agreement -evidence relevant to a defense against contract formation (duress, mistake, fraud, etc.) - evidence of a second separate deal - evidence of a prior communication that is designed to interpret an ambiguous term in the final agreement SOF v. PER if just contemplates a signed writing --> SOF if contemplates signed writing AND earlier discussion of the deal --> PER warranty: basic definition a promise about a term of the contract that explicitly shifts risk to the party making the promise express warranty and example - unless it's the seller's opinion, a promise that affirms or describes the goods and that itself is part of the basis of the bargain - floor sample or model good --> express warranty that the goods sold will be like the sample implied warranty of merchantability- triggered only when: a merchant makes an implied warranty that the goods are fit for their ordinary commercial purposes UNLESS disclaimed. implied warranty of merchantability: if disclaimed must be VERY clear (e.g. "sold as is") implied warranty of fitness for a particular purpose: triggered when: a buyer relies on a seller's expertise to select a special type of good that will be used for a special purpose nonmerchants can give someone an implied warranty of fitness for a particular purpose and either merchant or nonmerchant can disclaim condition: one party's contractual obligation will kick in only if some future event will take place express condition met generally based on objective standard of satisfaction. But contracts involving aesthetic taste based on subjective standard, but party can still breach subjective standard if he claims dissatisfaction in bad faith condition may be waived if: - a party receiving the protection of the condition waives by words or by conduct - other party wrongfully interferes or hinders occurrence of the condition. This is based on the good faith standard constructive condition of exchange: one party's performance is conditioned on the other side's performace COMMON LAW and performance in common law, doctrine of substantial performance states that a party will satisfy the CCE [and thus there is an agreement] if: - there is not a material breach - failure is not willful Nonbreaching party can recover damages for a deficiency in CCE (but not terminate contract) if not material. Typically damages = cost to complete the performance Breaching party who fails to satisfy the CCE- due to a material breach or failure to substantially perform cannot get paid under the contract (but maybe quasi contract i.e. if benefit conferred and unfair to keep benefit without paying) breaching party who fails to satisfy an express condition usually cannot get paid in quasi-contract if a contract is clearly divisible, it will be chunked up for the purposes of determining substantial performance UCC and Performance UCC requires perfect tender perfect tender has two main obligations 1. perfect goods 2. perfect delivery UCC perfect tender hypo: Mickey contracts for 500 pints of Fireball whiskey for $5000. Fireball sends Mickey only 495 pints. Is this perfect tender? No. Mickey can reject all of the whiskey in order to property reject the goods, a buyer must: notify the seller of the rejection within a reasonable time notify the seller of the particular defect; AND hold the goods for a reasonable time so the seller can get them back if the goods are rightfully rejected and the buyers has paid some or all of the price, then she will have a security interest in the rejected goods if seller fails to give reasonable instructions as to what the buyer should be doing once the bad goods have been delivered, buyer has 3 options: 1. continue to store the goods on the seller's account; 2. ship back; OR 3. resell the goods for the seller Rejection of the goods is not the same as rejection of the offer Buyer may revoke an acceptance of the goods e.g. goods seem OK at delivery but a defect is discovered within a reasonable time --what's a reasonable time? If the seller fails to tender perfect goods and time is left on the contract OR had reasonable grounds to believe buyer would accept, then the buyer must give the seller a chance to cure a buyer must notify the seller of any breach within a reasonable time or be barred from recovering any remedy. Default method of deliver is one delivery of the goods, but UCC allows installment contracts Installment contracts: buyer can reject a specific delivery that isn't perfect only when there is a substantial impairment in the installment that cannot be cured. [maple syrup question] if goods tendered at seller's place of business, seller just needs to give the goods to the buyer if shipment contract, seller must take three actions: 1. get goods to a common carrier 2. make arrangements for delivery 3. notify the buyer if destination contract (i.e. Free On Board "F.O.B" buyer's place of business), seller must get the goods to the buyer's business and notify the buyer If a goods contract followed by damage or destruction of the goods before buyer receives them, probably a ____ question risk of loss Risk of loss: if parties already dealt with the risk in K, K will control risk of loss: if parties haven't dealt with risk of loss in K, ask whether either party has breached (could be another part of the contract) --> breaching party bears risk of loss even if breach totally unrelated to delivery damages risk of loss: if no breach + goods shipped --> ask what delivery type. If shipment__. If delivery___ shipment: risk of loss during delivery rests with the buyer If no breach and niether shipment or WHATEVER THAT IS contract + seller is a merchant --> risk of loss stays with the seller until buyer receives goods If no breach and neither shipment or WHATEVER THAT IS contract + seller is NOT a merchant --> risk of loss moves to buyer when seller tenders the goods. buyer's performance obligations: payment to seller is due at the time and place at which the buyer is to receive the goods buyer's performance obligations:tender of payment is a condition to the seller's duty to complete its obligation a seller may ship under reservation: it is entitled to hold the goods until the buyer pays buyer's performance obligations: tender of payment may be made in any reasonable manner but a seller can demand cash payment (legal tender) if she gives any extension of time necessary to procure the cash for installment sales, payment may be made or demanded with each installment the buyer enjoys a right to inspect prior to payment if K that requires payment on delivery (COD) buyer does not have the right to inspect buyer's performance obligations:buyer pays for any expenses associate with buyer inspection, unless the goods do not conform and are rejected. 6 types of excuses: 1. impossibility/impracticability 2. death (ONLY if something special about dead person) 3. frustration of purpose 4. modified/cancelled 5. accord and satisfaction 6. novation excuse: impossibility =____. impracticability =_____ impossibility= can't be done at all impracticability= great difficulty common impossible/impracticable ("imp") fact patterns: performance becomes illegal after K formed subject matter of K destroyed services K and "special person," and that person dies or is incapacitated Just because more expensive not normally imp imp: unforeseeable event in which the non-occurrence of the event was a basic assumption of the K, and party seeking discharge was not at fault estate normally on hook for K if a party in K dies. BUT if something special about person performing the K, may be excuse frustration of purpose: something happened to undermine entire reason for creation of contract. MUST BE EXTREME and not allocated to one of the parties (think of apt rental near Wrigley field) excuse: cancellation/modification: basic rule - both parties can walk away if still performance on each side - otherwise a modification without consideration excuse: accord and satisfaction: basic rule parties to an earlier K agree that performance will be satisfied instead by the completion of a different performance excuse: new performance= accord excuse: excusing the initial performance obligation = satisfaction excuse: if accord not performed then___ the other side can sue on either the original obligation or the new promise until satisfaction occurs, creditor can still recover under the original contract substitute agreement vs. accord excuse: novation: basic rule BOTH parties agree that a substitute person will take over the contractual obligations (NOTE: if one side decides to ask someone else to do the work, this is a delegation) anticipatory repudiation: If other party says she's not going to perform, I can stop performance if her repudiation is clear and unequivocal anticipatory repudiation: nonbreaching party has two options: 1. treat as a breach and sue immediately for damages. (BUT if party A completed entire performance and only waiting for payment from party B, party B cannot sue early!) 2. ignore the repudiation, demand performance, and see what happens Where a party to a contract breaches the K and the only remaining duty is payment of money in installments, breach does not give other party a claim to damages for total breach. Other party only entitled to damages based on the payments that are currently due and owing. a party can retract repudiation as long as the other side has not commenced a lawsuit for breach or acted in reliance on the repudiation by materially altering his position anticipatory repudiation: UCC: demand adequate assurance of performance if reasonable grounds of insecurity about the other side's performance adequate assurance of performance: if questionable party fails to respond within a reasonable time, then you can treat this as repudiation money damages are the typical remedy in contract law money damages: expectation damages: basic put a party in the same economic position that it would be in if the contract had been performed as promised measure expectation damages by comparing the value of the performance without the breach to the value of the performance with the breach Expectation damages must be proven with reasonable certainty [look for Qs with new or unproven business ventures] unforeseeable consequential damages are not recoverable unless the breaching party had some reason to know about the possibility of these unforeseeable consequential damages consequential damages are: losses that are unique or special to this plaintiff general damages are: the type of losses that almost anyone would suffer from a breach. These include incidental damages, such as the cost of storing rejected goods, or finding a new buyer, or finding a replacement vendor limits to expectation damages: doctrine of mitigation states that a breached-against party must take reasonable steps to reduce damages from breach if you refuse to mitigate, the law will calculate damages as if you did mitigate. D bears burden of proving a mitigation failure mitigation efforts must be reasonably similar to the original contract lost volume profits: if seller is a retailer who sells this type of product all the time, the seller can try to argue for LVP [speedboat and Dump] incomplete performance: if the paying party breaches in a partially completed building contract, can the builder continue to work on the job? why? no. runs counter to mitigation. formula for incomplete performace expectation damages= contract price=amount already paid- amount that would be needed to finish job (this takes into account fact that builder did not finish job) use diminution in market value when cost to complete damages will dramatically overcompensate P (e.g. rebuilding towers just to fix lobby walls). DMV= how much lower is the market value of what you got versus what you wanted. breaching party must normally have acted in an innocent and unintentional manner for DMV damages (instead of coughing up cost-to-complete damages) reliance damages: put a party in the same economic position that it would be in if the contract had never been created. reliance damages: ask what loss a P incurred that would have never taken place but for the breached contract. a party cannot recover both expectation and reliance damages, typically, P must elect one or the other restitution damages: give P an amount equal to the economic benefit that P conferred D [ Owen Wilson nose hypo] Although expectancy damages normally awarded in breach-of-contract action, restitution damages permitted in cases where the nonbreaching party has partially performed a below-market-price K. punitive liquidate damages awarded only if: 1) amount of liquidate damages was reasonable at the time of contracting and 2) actual damages from breach would be uncertain in amount and difficult to prove specific performance (a type of equitable relief) awarded only when monetary damages are considered inadequate for some reason specific performance is presumptively available for real estate transactions specific performance is presumptively not available for contracts of personal service. rarely a court might grant an injunction prohibiting a breaching party from: performing services for a competitor for a reasonable period of time/place specific performance is available only for unique goods like art or custom-made items right of reclamation: an equitable right of an unpaid seller to reclaim goods when the buyer is insolvent. to assert: - buyer must be insolvent at the time of purchase - seller must demand the return of goods within 10 days of receipt (or wi/in a reasonable time if buyer misrepresented his insolvency to the seller) and - buyer still has the goods third-party beneficiaries: intended beneficiaries have the right to sue, ___________ beneficiaries do not incidental to determine whether a given third party is an intended beneficiary or an incidental beneficiary, ask whether: the initial counterparties (promisor and promisee) intended to convey enforcement rights to the third party in the event of breach creditor beneficiary hypo: Cam loaned Abe $500 last month. In satisfaction of this debt, Abe agrees to pay Beth $500 if Beth mows Cam's lawn 10 times. Beth never shows up, and Cam files a lawsuit against Beth. Cam can sue Beth because he is a creditor beneficiary. the promisor can assert any contract defense against the third party that he would be entitled to assert against the promisee assignment: transfer of rights under a K delegation: transfer of duties under a K If K just prohibits assignments, then the assigning party has breached the deal when he makes the assignment, but the 3rd party can still recover from the guarantor If the K invalidates assignments, then the 3rd party cannot recover (b/c there is no power or right to assign). Delegation of duties generally acceptable as long as K does not prohibit delegation or other party does not have some special interest in having a specific individual perform a delegatee is generally not liable for breach unless she receives consideration from the delegating party NOTE: on exam "assignment" could be either an assignment or a delegation. Read for the context to determine which one.