Delegation involves a party (delegator) giving another party (delegatee) the responsibility of carrying out the performance agreed upon in a contract. Three parties are involved: the delegator, the delegatee, and the obligee (the party to whom the performance is owed).
Validity of Delegation
A delegation is valid unless it threatens the obligee’s commercially reasonable expectations. Tasks requiring specialized skills or based on the delegator’s unique characteristics cannot be delegated. However, if the delegation does not pose such a threat, it is considered valid.
Breach of a Delegated Contract
If the delegatee fails to perform satisfactorily, the obligee can either treat the failure as a breach of the original contract by the delegator or assert themselves as a third-party beneficiary of the contract between the delegator and the delegatee and claim all remedies due to a third-party beneficiary.
Consideration
Unlike an assignment, a delegation is virtually always for consideration. The delegator remains liable for nonperformance, while the delegatee will not be liable to anyone for anything if the delegation is without consideration.
Comparison with Assignment
Delegation differs from assignment, which occurs when one party transfers their present rights to receive the benefits under the contract. A delegation and an assignment can be accomplished simultaneously, but the right to sue for nonpayment always stays with the delegator. A contract clause prohibiting assignment also prohibits delegation in common law.
Conclusion
Delegation is a crucial concept in contract law that allows parties to transfer performance obligations to others. Understanding the principles of delegation, including the parties involved, validity requirements, consequences of breach, and comparison with assignment, is essential for navigating contractual relationships effectively.
References
- Delegate | Wex | US Law | LII / Legal Information Institute
- Delegation (law) – Wikipedia
- § 2-210. Delegation of Performance; Assignment of Rights. | Uniform Commercial Code | US Law | LII / Legal Information Institute
FAQs
What is delegation in contract law?
Delegation in contract law occurs when a party (delegator) gives another party (delegatee) the responsibility of carrying out the performance agreed upon in a contract.
Who are the parties involved in delegation?
The three parties involved in delegation are the delegator (the party who has the obligation to perform under the contract), the delegatee (the party who assumes the responsibility of performing the delegated duty), and the obligee (the party to whom the performance is owed).
When is a delegation considered valid?
A delegation is considered valid unless it poses a threat to the commercially reasonable expectations of the obligee. Tasks requiring specialized skills or based on the unique characteristics of the delegator cannot be delegated.
What happens if the delegatee fails to perform satisfactorily?
If the delegatee fails to perform satisfactorily, the obligee can either treat the failure as a breach of the original contract by the delegator or assert themselves as a third-party beneficiary of the contract between the delegator and the delegatee and claim all remedies due to a third-party beneficiary.
What is the difference between delegation and assignment?
Delegation differs from assignment, which occurs when one party transfers their present rights to receive the benefits under the contract. A delegation and an assignment can be accomplished simultaneously, but the right to sue for nonpayment always stays with the delegator.
Is consideration required for delegation?
Unlike an assignment, a delegation is virtually always for consideration. The delegator remains liable for nonperformance, while the delegatee will not be liable to anyone for anything if the delegation is without consideration.
Can a contract clause prohibit delegation?
In common law, a contract clause prohibiting assignment also prohibits delegation.
What are some examples of delegation in everyday life?
Everyday examples of delegation include hiring a lawyer to represent you in court, appointing a power of attorney to make decisions on your behalf, or subcontracting work to a third party.