Contracts Rules 4

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Contracts Rules 4
2010-07-16 22:04:20
Assignment Delegation

Assignment and Delegation
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  1. Assignment of rights allowed when:
    Present intent to transfer immediately, no consideration required, but that supported by considereation is irrevocable.

    Must not materially increase duty or risk of obligor or reduce his chance of obtaining performance.

    Even if contract prohibits against assignement, assignment still permissible.

    NY rule: irrevocable transfer of assignor's rights by assignment need not be supported by consideration if it is in writing and signed by assignor.
  2. Rights of assignee
    Assumes all rights of assignor, but is subject to any defense against assignor.

    Subsequent assignments of same rights revokes any prior revocable assignments.

    Susquent assingments of same rights that were assigned irrevocably still valid if second assignee is purchaser for value without notice. First to receive payment from obligor has priority.
  3. Delegation of duties available where
    other party does not have have substantial interest in having delegating individual perform, and when delegation not prohibited in the contract.

    Delegator NOT released from duty.
  4. Novation after delegation implied where:
    • Original obligor repudiates liability to the original promisee; and
    • Obligee subsequently accepts performance of the original agreement from the delagatee, without reserving rights against the obligor
  5. Delegation under the UCC
    Delegation of duties creates reasonable grounds for insecurity.