Book Opener

The Transfer ofContractual Rightsand Dutiesl How to explainthe nature of anassignmentl How to identifycontractual rights thatcan be assignedl How to explain thenature of a delegationl How to explain thenature of a novationl How to identify asituation involvingprivity of contractUnderstanding whencontractual rights andduties can be assignedwill prepare you to dealwith such situations whenthey arise.l assignmentl delegationl novationl privity of contractl third-party beneficiaryTransfer of RightsAt the beginning of our study of contracts, we learned that whenindividuals enter contracts, they receive rights (benefits) and incur duties(detriments). In the vast majority of cases, people retain their rights andperform their duties on their own. At times, however, these rights andduties are transferred from the original parties to someone new. Thereare a variety of reasons why people choose to transfer their contractualrights and duties. Some people transfer their right to receive paymentsto other parties to pay off debts. Other people take on more work thanthey can handle and need to transfer some of their duties to other qualifiedparties. The law permits this sort of transfer, with a few exceptions.When transferring contractual rights and duties, there are manydetails that you should know.You may legally transfer your rights under any contract to whichyou have agreed, as long as the contract does not specifically say youcan’t. The transfer of a right under a contract is called an assignment .The party who transfers the right is called the assignor, and the party towhom the right is transferred is called the assignee. The assignee is athird person who is not a party to the original contract.Example 1. Anthony Cuomo entered into a contract with CathyMichaud to rebuild the front steps of her house for $1,800. Thecarpenter was pleased to get the contract because he owed $1,800to his landlord, David Brown. Before beginning work, Anthonyassigned the right to receive the payment for the work to his landlord.When payment was due, Cathy paid the $1,800 to DavidBrown directly.How Rights May Be AssignedNo consideration is necessary for an assignment to be valid. In mostcases, the law does not specify how one party may assign a right toanother. It’s best to put an assignment in writing, however, because anoral assignment can be difficult to prove. Let’s consider why it wouldbe important for an assignment to be in writing. Suppose that the partyto whom money is owed decides to assign the rights to the money. Theparty who owes the money is entitled to notice of the assignment. If the242 Unit 2: Entering Into Contracts