Ch 4: Assignment of Rights and Delegation of Duties

Question 1

What is the definition of assignment in contract law?

Answer 1

The transfer of rights under a contract

Question 2

Can partial assignments of contract rights be made?

Answer 2

Yes, partial assignments are permissible

Question 3

What is delegation in contract law?

Answer 3

The transfer of duties and obligations under a contract

Question 4

What are the two limitations on assignment?

Answer 4

• Materially increases the duty or risk of the obligor
• Materially reduces the obligor’s chance of obtaining performance

Question 5

What effect does a contract provision stating ‘Any assignment of rights under this contract is void’ have?

Answer 5

It renders the assignment void and unenforceable by the assignee against the obligor

Question 6

What is the difference between a prohibition on assignment and a void assignment provision?

Answer 6

A prohibition allows for an action for breach but does not prevent assignment; a void provision renders the assignment unenforceable

Question 7

What is required for an assignment to be valid?

Answer 7

There must be a present intent to transfer the right immediately

Question 8

True or False: Consideration is needed for an assignment to be valid.

Answer 8

False

Question 9

What is a gratuitous assignment?

Answer 9

An assignment that is not supported by consideration

Question 10

Under what conditions is a gratuitous assignment generally revocable?

Answer 10

• The obligor has not performed
• Promissory estoppel does not apply

Question 11

What makes a gratuitous assignment irrevocable?

Answer 11

• Delivery of a document symbolizing the right
• Delivery of a written assignment signed by the assignor

Question 12

What rights does the assignee generally take under an assignment?

Answer 12

• All rights of the assignor as the contract stands
• Subject to any defenses that could be raised against the assignor

Question 13

What happens to the rights of the assignor after an assignment?

Answer 13

The assignor cannot enforce the contract

Question 14

What happens to a subsequent assignment of the same right if the first assignment was revocable?

Answer 14

It revokes any prior revocable assignment

Question 15

What is a novation?

Answer 15

The substitution of a new contract for an old one when the original obligor is released from promises under the original agreement

Question 16

When is delegation not permitted?

Answer 16

• When a party has a substantial interest in having the delegating party perform
• When delegation is prohibited by the contract

Question 17

What is the effect on the delegator after obligations are delegated?

Answer 17

The delegator is not released from liability

Question 18

What constitutes the delegatee’s acceptance of a delegation?

Answer 18

A promise to perform those duties

Question 19

Fill in the blank: A promise by a contracting party to pay moneys received under the contract to a third party is not an assignment but a promise of a _______.

Answer 19

future payment

Question 20

What must the other party to the contract do if the delegation was permitted?

Answer 20

Accept the conforming performance of a delegatee

Question 21

What is the effect of an assignment of a contract that is not limited to contractual rights?

Answer 21

It is typically treated as both an assignment of rights and a delegation of duties

Question 22

What is assignment in the context of a contract?

Answer 22

The transfer of rights under a contract.

Question 23

What rights does the assignee take during an assignment?

Answer 23

All the assignor’s rights as the contract stands at the time of the assignment, subject to any defenses that could be raised against the assignor.

Question 24

When is assignment not allowed?

Answer 24

When it:
* materially increases the obligor’s duty or risk
* materially reduces the obligor’s chance of obtaining performance
* a contract provision limits or prohibits a party’s right to assign the contract.

Question 25

What effect does contractual language stating 'any assignment of rights under this contract is void' have?

Answer 25

It renders an otherwise allowable assignment void.

Question 26

Does consideration need to be present for an assignment to be valid?

Answer 26

No, but the presence of consideration makes an assignment irrevocable.

Question 27

What is delegation in the context of a contract?

Answer 27

The transfer of duties and obligations under a contract.

Question 28

When is delegation not allowed?

Answer 28

When a party to the contract has a substantial interest in having the delegating party perform.

Question 29

What does accepting a delegation imply for the delegatee?

Answer 29

A promise by the delegatee to perform the delegated duties, which is enforceable if the delegatee received consideration or there is a consideration substitute.

Question 30

Is the delegator released from liability upon delegation?

Answer 30

No, unless the other party to the contract agrees to release the delegator and substitute a new party (i.e., a novation).

Question 31

What may a delegation in a sale-of-goods contract create for the other contracting party?

Answer 31

Reasonable grounds for insecurity, allowing the other party to demand assurances.

Question 32

What must the other party do if the contract allows delegation?

Answer 32

Accept the conforming performance of the delegatee.