“Assignment” is the transfer of rights to another party. For example, if a contract entitles you to receive $100 for painting a house, you can transfer the right to receive that money to another person.
When Is Assignment Permissible?
Parties are generally free to assign their rights under a contract, but certain exceptions may apply.
- Assignment cannot increase obligations of the other party. For example, if a manufacturer contracts to deliver sweaters to a store in the same city as the sweater factory, the other party can’t assign the sweater delivery to a different store in another state because it would impose a greater obligation on the manufacturer than was originally bargained for.
- Parties can draft the contract so that assignment is prohibited. You should look over your contract to see if it expressly forbids assignment.
What Is Delegation of Duties of a Contract?
Delegating duties, on the other hand, is transferring obligations of a contract. The contract requires you to perform some duty, and you want someone else to perform instead. In the painting example above, instead of transferring your right to receive $100, you would transfer the obligation to paint the house to someone else.
When Is Delegation Permissible?
In general, the delegation of duties under a contract is allowed. However, like with assignment, there are exceptions:
- Delegation is not allowed when it would change the nature of the agreement. For example, if a party hires a famous chef to cook for a wedding, the chef cannot delegate the duty to cook to someone else, because the party has specifically contracted for the experience and individual skill of this chef.
- It is generally not permissible to delegate the promise to repay a debt.
- Parties can also draft into the contract that delegation will not be allowed. You should look at the contract to see if there is a restriction on delegation of duties.
Is Consent Required?
Consent to assignment or delegation is not required unless the contract so states. Again, you should look at the language of your contract to determine whether or not the other party’s consent is necessary before you can assign rights or delegate duties.
Do I Need a Lawyer for Assignment and Delegation?
Contracts are a complicated area of law, and the applicable rules of assignment and delegation will vary from state to state. An attorney experienced in contract law or business contracts can help you determine whether or not an assignment/delegation is allowed, and under what circumstances.