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BSL - 16 - Transfer of Contract

This document summarizes key aspects of contract assignment and delegation. It discusses how all contract rights can be assigned unless prohibited, with the assignee gaining implied warranty of an enforceable contract from the assignor. For delegation of duties, duties can be delegated unless the obligee has substantial interest in the original party performing. The delegator remains liable until the delegatee performs, unless the obligee agrees to a novation. Third party beneficiaries may have rights under a contract if they are intended beneficiaries, and these rights are subject to defenses between the actual contract parties.

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28 views4 pages

BSL - 16 - Transfer of Contract

This document summarizes key aspects of contract assignment and delegation. It discusses how all contract rights can be assigned unless prohibited, with the assignee gaining implied warranty of an enforceable contract from the assignor. For delegation of duties, duties can be delegated unless the obligee has substantial interest in the original party performing. The delegator remains liable until the delegatee performs, unless the obligee agrees to a novation. Third party beneficiaries may have rights under a contract if they are intended beneficiaries, and these rights are subject to defenses between the actual contract parties.

Uploaded by

kdonelan
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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BSL_16

11/3/2008 12:21:00 PM

Transfer of Contract rights and/or duties y Assignment o Terms o All rights can be assigned unless     o Rights of Assignee o Assignors Liability  Implied Warranty If assignment is supported by consideration, then it comes with an automatic guarantee from the assignor that the contract is enforceable but no guarantee that the obligor will pay  Express Warranty If the obligor doesnt pay for any reason the assignor will pay o Importance of notifying obligor of assignment  If obligor performs contract before receiving notice, they have no liability to an assignee  If after receiving notification the obligor performs the original contract, they are still liable to perform to the assignee o Successive assignments (when an assignor assigns the same right to more than one assignee in succession)  Majority (American) Rule: 1st in time, 1st in right  Minority (English) Rue: 1st to give notice to the obligor is entitled to the performance y Delegation- transfer of Contract Duty o Terms  Delegator is the party who transfers their duty  Delegatee is the party to who the duty is transferred o All duties can be delegated unless  obligee has a substantial interest in having the original obligor perform  OR prohibited by contract General prohibition against transfer or specific anti-delegation clause o Effect of delegation  Delegatees liability depends on their assumption of the duties  Delegators liability Remains liable until Delegatee performs (Delegation of a duty does not automatically extinguish the delegators liability)

UNLESS obligee gives a novation (obligee explicitly agrees to release the delegator and substitute the Delegatee in their place) Third Party Beneficiaries (3rd PB) o Incidental 3rd party beneficiaries = no rights under the Contract o Intended 3rd party beneficiaries= rights under the Contract (you can sue under the contract)  Subject to defenses (that actually deal with contract parties)  Rights against promisee (do you (3rd party) have any rights against party who entered contract on 3rd partys behalf) Creditor 3rd party beneficiary (there was consideration)= yes you have a cause of action Donee 3rd party beneficiary (no consideration)=no  Example: parents who are buying the car for child

Could have a question regarding transfer of complete contract/rights- assignment, delegation

11/3/2008 12:21:00 PM

11/3/2008 12:21:00 PM

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