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Contracts • Third Parties
K#198
Legal Definition
A delegator remains liable under the contract, but the delegatee is only liable (to either party) if they receive consideration from the delegator. A delegation for consideration creates a third-party beneficiary situation (in which the beneficiary is the obligee), thus the beneficiary can recover from the promisor.
Plain English Explanation
In cases involving the delegation of duties, the question of who can sue whom depends on whether there was consideration (something of value) exchanged as part of the delegation.
First, the delegator (the person who transfers their duty) remains liable under the original contract. This means that if the person to whom the duty was delegated (the delegatee) does not perform, the obligee (the party entitled to the benefit of the contract) can still sue the delegator. The delegator cannot simply transfer their duty and walk away from their responsibilities under the contract.
Next, the delegatee (the person receiving the duty) is only liable if they received consideration from the delegator. This means that if the delegatee agreed to take on the duty in exchange for something of value, such as money or another benefit, they become responsible for fulfilling the obligation. If the delegatee fails to perform in this case, the obligee (who is now a third-party beneficiary) can sue the delegatee for not performing. This creates a third-party beneficiary relationship where the obligee can sue the delegatee directly because the delegatee has taken on the duty in exchange for consideration.
For example, let’s say Bob owes Amy $500 to paint her house. Bob decides he doesn’t want to do the painting, so he delegates this duty to Sam. If Bob pays Sam (offers consideration) to take over the job, Amy (the obligee) can sue Sam if Sam fails to paint the house, since Sam received something of value to take on the responsibility. This creates a third-party beneficiary situation, where Amy can recover damages from Sam for not doing the work.
However, if Sam agrees to paint Amy’s house as a favor to Bob (with no consideration involved), Sam is not legally bound to fulfill the duty. In that case, Amy cannot sue Sam if he doesn’t paint the house. Instead, Amy’s only option is to sue Bob, since Bob remains liable to Amy under the original contract.
In short, the delegator (Bob) always remains liable unless the delegatee (Sam) takes on liability through an agreement with consideration. If consideration is involved, the obligee (Amy) can sue the delegatee directly for non-performance.
First, the delegator (the person who transfers their duty) remains liable under the original contract. This means that if the person to whom the duty was delegated (the delegatee) does not perform, the obligee (the party entitled to the benefit of the contract) can still sue the delegator. The delegator cannot simply transfer their duty and walk away from their responsibilities under the contract.
Next, the delegatee (the person receiving the duty) is only liable if they received consideration from the delegator. This means that if the delegatee agreed to take on the duty in exchange for something of value, such as money or another benefit, they become responsible for fulfilling the obligation. If the delegatee fails to perform in this case, the obligee (who is now a third-party beneficiary) can sue the delegatee for not performing. This creates a third-party beneficiary relationship where the obligee can sue the delegatee directly because the delegatee has taken on the duty in exchange for consideration.
For example, let’s say Bob owes Amy $500 to paint her house. Bob decides he doesn’t want to do the painting, so he delegates this duty to Sam. If Bob pays Sam (offers consideration) to take over the job, Amy (the obligee) can sue Sam if Sam fails to paint the house, since Sam received something of value to take on the responsibility. This creates a third-party beneficiary situation, where Amy can recover damages from Sam for not doing the work.
However, if Sam agrees to paint Amy’s house as a favor to Bob (with no consideration involved), Sam is not legally bound to fulfill the duty. In that case, Amy cannot sue Sam if he doesn’t paint the house. Instead, Amy’s only option is to sue Bob, since Bob remains liable to Amy under the original contract.
In short, the delegator (Bob) always remains liable unless the delegatee (Sam) takes on liability through an agreement with consideration. If consideration is involved, the obligee (Amy) can sue the delegatee directly for non-performance.
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 assignment and a delegation?
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 prevails when the same rights have been assigned to multiple parties?
