Assignment of Rights
What is an assignment in contract law?
A transfer of contractual rights from the assignor to the assignee.
What is a delegation?
A transfer of contractual duties to a third party (the delegatee).
Who is a third-party beneficiary?
Someone who, though not a party to the contract, is intended to benefit from it.
What is a creditor beneficiary?
A beneficiary to whom the promisee owes a debt.
Can an obligor be forced to perform after an assignment without notice?
No — they are not bound until they receive notice of the assignment.
Is consideration required for an assignment?
No — assignments can be gratuitous, but those are typically revocable unless relied upon.
Are delegations generally permitted?
Yes — unless the contract prohibits it, or the duty is personal in nature.
What is an intended beneficiary?
A third party intended by the original parties to benefit from the contract, with the right to enforce it.
What is a donee beneficiary?
A third party receiving a gift benefit from the contract.
What happens if a contract prohibits assignments?
Assignment is generally still valid but may give rise to a breach between assignor and obligor.
What happens if the obligor isn’t notified of the assignment?
They can discharge their obligation by paying the assignor.
Is the delegating party discharged after delegation?
No — they remain liable unless there is a novation.
What is an incidental beneficiary?
A third party who incidentally benefits from the contract but has no enforcement rights.
Who can a creditor beneficiary sue?
Both the promisor and the promisee.
Can duties involving artistic or professional judgment be delegated?
No — they are considered personal services and nondelegable.
What limits the assignability of a right?
The right cannot be assigned if it would materially change the obligor’s duty, is barred by the contract, or is personal in nature.
When is the delegatee liable to the obligee?
When the delegatee assumes the duty, the obligee may sue them for nonperformance
When do third-party beneficiary rights vest?
When the beneficiary assents, relies, or files suit to enforce the contract.
Who can a donee beneficiary sue?
Typically only the promisor.
What happens if a delegate fails to perform?
The delegator remains liable unless a novation releases them.
When is a gratuitous assignment irrevocable?
If it is put in writing, delivered physically, or relied upon by the assignee.
What is a novation?
A new agreement that releases the original obligor and substitutes a new party.
Can the original parties modify the contract after a beneficiary's rights vest?
No — once rights vest, modification requires the beneficiary’s consent.
What distinguishes creditor from donee beneficiaries?
A creditor is owed a legal duty; a donee is not.
What’s the main risk in assigning without a writing?
The assignment may be revoked if it’s gratuitous and there’s no reliance or writing.