Contract delegation occurs when a party to a contract transfers their duties of performance to an outside third party. They are said to delegate their duties to the other party. This is similar to an assignment, except that in an assignment, it is the party receiving the performance that transfers their benefits to another party.
For instance, suppose Bob is to pay John for painting his fence. If it’s allowed, John might choose to delegate his duty of painting the fence to Jill. Here, John and Jill might work out the details regarding payment, but ultimately, Jill will be responsible for the performing the painting duties.
Generally speaking, delegation is allowed in most contractual arrangements. However, duties cannot be assigned in situations such as:
- The delegation would change the entire nature of the agreement. For instance, if a painter was hired due to their particular unique skill, they usually can’t delegate their duties to another painter, because they wouldn’t have the same unique skill that is being requested in the contract
- The delegation involves a promise to pay a financial debt
- The parties have agreed in their original contract that delegation is not allowed
- The delegation would involve or result in a violation of any type of law
Thus, it’s always best for parties in any contract to address assignment of rights and delegation of duties.
An invalid delegation of contract duties can often result in a lawsuit based on a breach of contract theory. Here, the remedy may depend on the exact type of breach as well as the nature of the contract. In some cases, a monetary damage may be prescribed, whereas in other cases, specific performance of the contract duties may be required. This all depends on the totality of the facts and circumstances in each case.
Delegating contract duties needs to happen in the correct way according to state and federal contract laws. You may need to hire a contract lawyer if you have any questions or concerns at all regarding contract matters. Your attorney can help you with your contract duties to determine your responsibilities in your particular situation. Also, in the event of a lawsuit, your lawyer can assist you during court meetings.