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Contracts • Third Parties
K#196
Legal Definition
A contract creates both rights and duties. An assignment is the transfer of rights or benefits under the contract to a third party who was not party to the contract. In contrast, a delegation is the transfer of duties or burdens under the contract to a third party who was not a party to the contract.
Often, the contracting party makes both an assignment and a delegation of their rights and duties under the contract to a third party.
Often, the contracting party makes both an assignment and a delegation of their rights and duties under the contract to a third party.
Plain English Explanation
In contracts, there are both rights and duties involved, and understanding the difference between an assignment and a delegation helps clarify how these can be transferred to other people.
An assignment happens when one party (the assignor) transfers their rights or benefits under the contract to a third party (the assignee). Essentially, this means that the assignee now gets to enjoy the benefits or receive the payments that the assignor was originally entitled to under the contract. For example, if Bob is owed money by Sam, Bob can assign the right to receive that money to Amy, and Amy will then be the one to collect from Sam.
A delegation, on the other hand, is when a party to the contract (the delegator) transfers their duties or obligations to someone else (the delegatee). This means that the delegatee will now be responsible for fulfilling the tasks or services that the original party was supposed to perform. For instance, if Bob is supposed to paint Sam's house, Bob could delegate that duty to Amy, who will now be responsible for doing the painting.
Sometimes, a contracting party will both assign their rights and delegate their duties at the same time. This means they are transferring both the benefits they were supposed to receive and the responsibilities they were supposed to carry out under the contract to a third party.
Ultimately, assignments deal with transferring rights or benefits, while delegations are about transferring duties or responsibilities.
An assignment happens when one party (the assignor) transfers their rights or benefits under the contract to a third party (the assignee). Essentially, this means that the assignee now gets to enjoy the benefits or receive the payments that the assignor was originally entitled to under the contract. For example, if Bob is owed money by Sam, Bob can assign the right to receive that money to Amy, and Amy will then be the one to collect from Sam.
A delegation, on the other hand, is when a party to the contract (the delegator) transfers their duties or obligations to someone else (the delegatee). This means that the delegatee will now be responsible for fulfilling the tasks or services that the original party was supposed to perform. For instance, if Bob is supposed to paint Sam's house, Bob could delegate that duty to Amy, who will now be responsible for doing the painting.
Sometimes, a contracting party will both assign their rights and delegate their duties at the same time. This means they are transferring both the benefits they were supposed to receive and the responsibilities they were supposed to carry out under the contract to a third party.
Ultimately, assignments deal with transferring rights or benefits, while delegations are about transferring duties or responsibilities.
Visual Aids
Related Concepts
In a third-party beneficiary situation, who is the third-party beneificiary, who is the promisor, and who is the promisee?
What are the implied warranties of an assignor in an assignment for consideration?
What defenses may a promisor assert against a third-party beneficiary?
What duties are not delegable?
What is a delegatee?
What is a delegator, delegatee, and obligee?
What is an assignee?
What is an assignment?
What is an assignor?
What is an obligee?
What is an obligor?
What is a promisee?
What is a promisor?
What is the difference between an incidental and intended beneficiary?
What is the effect of a clause prohibiting assignment?
What is the effect of a contract containing no language about assignment rights?
What is the effect of consideration on assignment rights?
What is the effect of invalidation language on assignment?
What two types of intended beneficiaries are there?
When are modification agreements between the obligor and assignor effective?
When can an assignee sue an obligor for payments to the assignor?
When do a third party's rights to enforce the contract vest?
When does delegation of duties occur?
Who can sue whom in a suit involving beneficiaries, promisees, and promisors?
Who can sue whom in a suit involving the assignment of rights?
Who can sue whom in a suit involving the delegation of duties?
Who prevails when the same rights have been assigned to multiple parties?
