1. Business & Personal Law “Assignment, Delegation, and Breach of Contract”

2. Transfer of Rights--Assignment n How Rights May Be Assigned –No new consideration is necessary –Usually should be in writing –No specific legal format required n What Rights May Be Assigned? –Most rights are assignable except if obligations of other party are significantly changed. –Rights to receive personal services usually not assignable.

3. Transfer of Rights--Assignment –Assignor can only assign rights he/she has and nothing more. Assignee takes those rights subject to other people’s defenses. –Most common rights assigned = the right to payment of money and the right to delivery of goods. –See model assignment document on p. 184. –Some states forbid state employees from assigning wages to creditors.

4. Transfer of Duties--Delegation n Party to a contract delegates another person to perform the obligation in his/her place n Performance--not responsibility--may be delegated n Subcontracting is a form of delegation n Personal services are not delegatable. n Delegating is not possible if forbidden in original contract.

5. Novation n Novation = An agreement whereby an orginal party to a contract is replaced by a new party –Consent of all parties is required.

6. Status of Third Parties n “Privity of Contract” = relationship between the parties to a given contract. n Third-Party Beneficiary = a person who is not a party to a contract, but who benefits from it.

7. Breach of Contract n Breach = when one party to a contract fails to do what he/she had agreed to do n Anticipatory Breach = when one party notifies the other of intention not to go through with the contract –Most states allow suit for breach at this time, but some required waiting for passage of performance date –Does not apply to promises to pay money at some future date.

8. Remedies for the Injured Party n Remedy = legal means of enforcing a right or correcting a wrong n Options: –Acceptance of the Breach Accept breach and consider contract discharged –Often the best choice –Nominal Damages = (1 cent to $1) Only if suit; no real damages; Purpose to dignify injured party

9. Remedies for the Injured Party –Suit for Monetary Damages = payment recovered in court by a person who has suffered injury Goal is to put injured party in the position he/she was in if contract had been carried out –Suit for Actual & Incidental Damages Actual = Difference between contract price and market value Incidental = Reasonable costs related to the breach and suit

10. Remedies for the Injured Party –Liquidated Damages = Allowable damages which are agreed upon in the original contract Kind of like “prenuptuals” –Specific Performance = Where injured party in a breach of contract asks court to order the other party to perform Only done if monetary damages not sufficient All real estate contracts fall into this category Not a right, but a discretion of the court –Not used if extreme hardship for defendant

11. Mitigation of Damages n Mitigation = Minimizing of damages –Court will expect all parties to have taken all available precautions and steps to minimize (“mitigate”) losses (damages) –Failure to mitigate is borne by that party