What You'll Learn

  • Assignment of rights
  • Limits and notice
  • Delegation of duties
  • Novation
  • Intended and incidental beneficiaries

Educational information only; not legal advice. This article is a general study aid and should be checked against current authority and course materials.

1. Assignment Transfers Rights

Role Meaning

Assignor The original obligee who transfers the contractual right.

Assignee The third person who receives the right.

Obligor The party that must render the assigned performance.

Most contract rights are assignable, and consideration is not required for a valid assignment. A gratuitous assignment can be revocable until effectively delivered, while an assignment supported by consideration creates a contract between assignor and assignee and is ordinarily irrevocable.

● An assignment is restricted when it would materially increase the obligor’s duty, risk, or burden. ● Highly personal rights may be nonassignable because the obligor has a substantial interest in the identity or characteristics of the original obligee. ● Statutes and public policy can prohibit assignments such as selected future-wage rights. ● A contractual anti-assignment clause may create damages for breach without necessarily invalidating the transfer; exact language matters.

Key Takeaway

The assignee acquires no greater right than the assignor possessed. The obligor may ordinarily assert against the assignee the defenses and limitations that would have applied against the assignor.

2. Notice Protects the Assignee

Notice is not always required to make the assignment valid, but it is strategically important. An obligor that pays the assignor without notice may discharge the duty, leaving the assignee to pursue the assignor. Successive-assignment priority varies, though the outlines identify the first-in-time rule as the majority approach.

3. Delegation Transfers Performance of Duties

Role Meaning

Delegator The original obligor who transfers performance.

Delegatee The person asked to perform the duty.

Obligee The party entitled to receive performance.

Most duties may be delegated unless performance is personal, the contract expressly makes delegation ineffective, or statute or public policy forbids it. The obligee’s interest is stronger than in assignment because the obligee may be forced to receive performance from a person it never selected.

Key Takeaway

The delegator ordinarily remains liable if the delegatee fails. The delegatee becomes liable when it assumes the delegated obligation. Only a novation - consent by all required parties to substitute and discharge the original obligor - releases the delegator.

4. Third-Party Beneficiaries

Intended beneficiary

The contracting parties intended performance to satisfy a debt owed to the third person or otherwise intended to confer an enforceable benefit. The intended beneficiary may sue when the doctrine’s requirements are met.

Incidental beneficiary

The third person merely benefits as a side effect, without manifested intent to confer a contractual enforcement right. The incidental beneficiary may not enforce.

The clearest intended-beneficiary examples include life insurance and agreements in which the promisor is to pay a known debt owed by the promisee to the beneficiary. A neighbor whose property value rises because another owner hires a contractor is ordinarily incidental.

5. A Unified Exam Map

1 Identify the original promisor, promisee, obligor, and obligee. 2 Ask whether a right was assigned, a duty delegated, or the third person was part of the original performance plan.

3 Test contractual, personal, statutory, and material-burden limits. 4 Determine who received notice and who paid or performed. 5 State who remains liable: assignor, assignee, delegator, delegatee, promisor, promisee, or beneficiary. 6 Check whether a novation or other release changed the original liability.

Key Takeaway

A singer contracts to perform at a private event, then asks an unknown substitute to appear. The duty is highly personal and likely nondelegable. By contrast, the event host’s right to receive a routine refund may be assignable. If the host, singer, and substitute expressly agree to replace and release the singer, the arrangement may be a novation.

Common Mistake

Saying duties are “assigned”; assuming delegation releases the delegator; forgetting the assignee takes subject to defenses; treating every benefited person as intended; and reading a general anti-assignment clause without analyzing its exact effect.

Primary Authorities

  • ● Restatement (Second) of Contracts §§ 302, 317, and 318.

  • ● Assignment, delegation, novation, and beneficiary principles described in the uploaded Contracts outlines.

Exam-ready conclusion

Assignment moves a right; delegation moves performance of a duty; novation changes who is legally bound; and beneficiary doctrine asks whether the original parties intended a nonparty to hold an enforceable benefit. Draw the relationships before applying the rules.