28 Week Contracts Slides

--- title: 28 Week Contracts Slides slideOptions: transition: slide theme: solarized image: https://i.imgur.com/PWOPZbH.png tags: Slides, PCL, Law School ---  # PCL 1L Contracts    [@peoplescollolaw](https://twitter.com/peoplescollolaw) --- ## Assignment and Delegation In contrast to third party rights, which are defined in the contract, assignments and delegations occur after a contract is formed. --- ## A party… Assigns rights — *performance owed to the assigning party* Delegates duties — *performance due by the delegating party* --- ## Assignment An assignment is a present transfer of rights under a contract. --- ## Concepts Promisor and Promisee ---- Promisor and Promisee ↕️ Obligor and Assignor Assignor ➡️ Assignee ---- ![assignment](https://i.imgur.com/AJ6Taa8.png) ---- Obligor and Assignee are now Promisor and Promisee ---- ### Novation? This is different than a novation in that novation requires agreement by all parties (*see* full rule *barbi* VI.E.8). Here, the obligor is not part of the agreement to transfer rights from assignor to assignee. --- #### **General Rule:** all contracts are assignable. Exceptions: - substantially change obligor's duty, increase their risk, or reduce contract value - doesn't disproportionally alter quantities in output or requirements contracts - personal services requiring judgment, skill, or special trust - contract expressly prohibits assignment --- ## Requirements - an existing valid contract - a promisee (assignor) making present words of assignment (assign, transfer, sell, convey, etc.) - no writing required except interest in land, wages, security interests - no consideration required --- ## Revocation Gratuitous assignments are always revocable: - assignor dies or goes bankrupt - assignor makes a subsequent assignment (to another assignee) - assignor notifies obligor or assignee of revocation - assignor takes direct performance from obligor --- ## Irrevocable The following are irrevocable assignments: - assignments for value - for consideration - as security for or as payment for preexisting debt ---- ## Irrevocable The following are also irrevocable assignments: - detrimental reliance on a gratuitous assignment - foreseeable reliance; **and** actual reliance (change of position) - performance or payment tendered by obligor - special evidence of the assignment (token chose or writing of same) --- ## Party Rights and Liabilities *Assignee v. Obligor* - recover from the obligor directly - obligor has same defenses as against assignor (assignee steps into shoes) - payment by obligor to assignor prior to notice exempted ---- ## Party Rights and Liabilities *Assignor v. Obligor* - assignor has no rights in the contract after an effective assignment ---- ## Party Rights and Liabilities *Assignee v. Assignor* - gratuitous assignment, no recovery - assignment for value subject to **implied warranties of assignment**, if breached allow recover for damages - right assigned exists - right assigned not subject to defenses - assignor will not impair of defeat value of the right --- ## Multiple Successive Assignments **gratuitous:** last assignment prevails, unless a previous assignment was made [irrevocable](#/8/1) **value:** first assignee for consideration prevails, unless a later, good faith assignee obtains payment or judgement first, obtains a novation with obligor, or obtains evidence of ownership (e.g. a deed or other document) --- ## Delegation A delegation is a present transfer of duties under a contract. --- ## Concepts Promisor and Promisee ---- Promisor and Promisee ↕️ Delegator (Obligor) and Obligee Delegator ➡️ Delegatee ---- ![delegation](https://i.imgur.com/vW3tdfi.png) ---- Delegatee and Obligee are now Promisor and Promisee --- #### **General Rule:** all contracts are delegable. Exceptions: - duties involving personal judgment, skill, or special trust - materially changes obligee's expectancy of performance - contract expressly prohibits delegation or assignment --- ## Requirements - an existing valid contract - a promisor (delegator) making present words of intent to delegate - no writing required --- ## Party Rights and Liabilities *Obligee* - must accept duties from delagatee, unless those duties were nondelegable ---- ## Party Rights and Liabilities *Delagator* - remains liable for duties under contract, but is secondarily liable ---- ## Party Rights and Liabilities *Delagatee* Was there a delegation, or a delegation plus an assumption of the duty? - delegation creates power for another to perform for delegator - assumption occurs when delagatee's promise is supported by consideration (third party) ---- ## Novation? See previous discussion on [novation](#/4/4) under assignment. However, if an obligee expressly consents to the transfer of duties, it may be construed as a novation. --- ## No Assignment Clauses - clause prohibiting assignment of "the contract" generally construed to bar delegation  - clause prohibiting assignment of rights provide obligor ground for suit, but assignment is still valid (power v. right)  - clause stating attempts to assign with be **VOID** render void (power v. right)  --- ## Prior FYLSX #### Assignment and Delegation [October 2017 Q3](http://www.calbar.ca.gov/Portals/0/documents/admissions/fyx/FYLSX_OCT2017_SelectedAnswers.pdf) [June 2017 Q1](http://www.calbar.ca.gov/Portals/0/documents/admissions/fyx/FYLSX_June2017_SelectedAnswers_R.pdf) #### Third Party [June 2018 Q1](http://www.calbar.ca.gov/Portals/0/documents/admissions/fyx/FYLSX_Jun2018_SelectedAnswers.pdf) [October 2014 Q4](http://www.calbar.ca.gov/Portals/0/documents/admissions/fyx/October2014FYLSX_SelectedAnswers_R.pdf) --- :scales: :mortar_board: [@peoplescollolaw](https://twitter.com/peoplescollolaw) :mortar_board: :scales: ---