Assignment, Delegation & Breach of Contract Business & Personal Law Gary Nelson

Assignment Transfer of rights under a contract Assignor – person who transfers the rights Assignee – person to whom the rights are transferred Should be in writing No consideration required

What rights are assignable? When the assignment does not change the nature of the obligation, it is assignable. Assignee only take the rights the assignor had, subject to all defenses.

Delegation Transfer of duties under a contract Delegation does not alter the responsibility of the original party to perform the duty, or see that it is done. No delegation where: Personal service Personal skill or judgment involved Contract prohibits delegation

Novation Original party to a contract is replaced by a new party Requires the consent of the other parties

Third Party Beneficiaries Ordinarily one must be in “privity of contract” to sue. If the contract was made to benefit a 3rd party, however, the 3rd party may sue for breach.

Breach of Contract Failure to do what you have undertaken to do in a contract.

Anticipatory Breach When one party notifies the other party of her intent to breach the contract. Goal is to prevent damages from being as high as they otherwise might be.

Remedies for Breach Acceptance Sue for damages When no damages Lawsuit would result in only “nominal” damages ($1) Sue for damages Sue for specific performance

Types of Damages Actual Incidental Money lost due to breach Consequential Monetary lose as a consequence of the breach, but not directly resulting from it. Incidental Reasonable expenses incidental to the breach

Liquidated Damages Parties agree in advance as to what the damages will be and write this into the contract.

Specific Performance Court orders the party in breach to perform as agreed. This is only done when damages will not compensate for the harm done. Unique items – such as pieces of real estate

Mitigation of Damages Party committing breach must do everything possible to minimize the amount of the damages.