Chapter 14 Assignment, Delegation, and Breach of Duty

Aim: How does assignment, delegation, and breach of contract impact an agreement

I. Breach of Contract

  • Breach=break
  • One individual has failed to uphold their legal responsibilities in a contract
  • Remedies to a Breach:
    1. Accept the Breach– when one party breaches a contract, it is an excuse for the other party not to perform
    2. Monetary Damages- payments ordered by judges ruling for injuries that occured as a result of a breach
      • “Mitigate before you Litagate” (minimize the damages by trying to comprimise)
      • Actual Damages: “actual loss”
      • Incidental Damages: reasonable expenses as a result of the breach (rental car, attorney fees)
      • Compensatory Damages:mandatory expenses/losses as a result of a breach (mediated treatment, actual loss)
      • Punitive Damages: damages awarded above and beyond compensatory damages based on fraud- Punishment
      • Consequential Damages
      • Liquidated Damages: pre agreeing to pay any damages
      • Nominal Damages: (small)
      • Speculative Damages: based on speculation, not fact- hard t0 prove
    3. Specific Performance– injured party asks the court to order the other party to do specifically what he or she agreed to do; can only be used when money damages are not sufficient to give relief
  • Minimizing Damages– injured party must take a;; reasonable steps to minimize the damages that might result from the other party’s failure of performance; injured party will be obligated to protect the other party from any unnecessary losses (mitigation of damages)

II. Assignment- in a contract, the right to recieve is assignment

  • Do not need additional consideration to assign your rights
  • assigning of rights not necessary to be in writing
  • Transfer of Right: Assignment
    • Assignor– party who transfers rights
    • Assignee– third party who recieves the right
  • What rights can be assigned?
    • Most rights can be assigned in a contract accept when it changes the obligations in a contract drastically (Ex: contractor, house painter)
    • Typically, payments and delivery of goods are common types of assignments

III. Delegation- transferring of duties/responsibiltites in a contract to a third party

  • subcontracting- services ( G.C.–>plumber–> electrician)
  • What duties can’t be transferred?
    • services that require a personal talent (artist, photographer)
    • celebrity performers can’t delegate their performance
    • if the contract specifically prohibits delegation

IV. Novation– the original party to a contract has been replaced by the third party. All responsibilitites will no longer be held by the original party

V. Third Parties

  1. Privity of Contract– relationship and responsibilities of the parties to the contract
  2. Third Party Beneficiaries– (life insurance) third party can enforce and take action in a contract when they have been named a beneficiary ( vested interest)

 

 

 

 

 

 

 

 

 

 

 

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