BUS311_chapter_06

Since the assignment results in the same business

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Unformatted text preview: . In the third year of the contract, Patrick wants to sell his agency and assign the balance of the lease to the buyer, Alexsei. Since the assignment results in the same business renting the same space on exactly the same terms, the lease can be assigned, even if Lateesha doesn’t like it. Her burden or obligations have not changed in any significant way by simply having a different owner of the business paying the rent and occupying the space. However, while an assignor can assign the benefits, he cannot transfer the liability on the contract to the assignee! This is why it is so easy to assign contracts. In the example above, if the rent does not get paid or damage is done to the premises, Lateesha can still sue Patrick. rog80328_06_c06_111-133.indd 116 10/26/12 5:37 PM CHAPTER 6 Section 6.1 Third Parties Delegations A delegation is the transfer of the duties on a contract. Suppose Peter Painter has contracted to paint Harry Homeowner’s house for $3,000. One week before he is due to start painting the house, Peter falls off a ladder and breaks both his legs. He is unable to perform for Harry. Luckily for Peter, his brother Paul offers to step in and paint the house. In this situation, Peter is the delegator, Paul is called the delegatee, and Harry is the obligee, because he is entitled to have the duty performed for him (see Figure 6.3). Figure 6.3: Delegation of a contractual duty Harry and Peter are the original parties to the contract, but now Peter has delegated the painting of the house to his brother, Paul. If Paul paints the house the wrong color, Peter will still be liable to Harry. If Paul did not receive consideration for painting the house, he has no liability to either Peter or Harry. The Delegation Harry Peter Obligee Delegator $ Paint job Paul Delegatee ho Du t nt y i Pa Broken leg e us “I’ll paint the house, bro. ” rog80328_06_c06_111-133.indd 117 10/26/12 5:37 PM Section 6.1 Third Parties CHAPTER 6 Most duties can be delegated without the...
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This test prep was uploaded on 04/09/2014 for the course BUS 311 taught by Professor Parker during the Spring '10 term at Ashford University.

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