Contracts--16

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xiii) Assignability of rights and delegability of duties.

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xiv) What is the general rule of assignability for contracts?

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(1) The general rule is that tall contract rights are assignable. There is a strong public policy favoring the free flow of commerce and the assignability of commercial obligations.

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xv) As stated in Restatement second section 317, A right may not be assigned where it

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(1) Would materially change the duty of the obligor, or materially increase the burden or risk imposed on him by his contract, or materially impair his chance of obtaining return performance, or materially reduce its value to him.

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(1) Rights may not be assigned if the effect would be to ____ the ____ to perform _____ services to _____ other than the _____ _____..

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xvi) Rights may not be assigned if the effect would be to require the obligor to perform personal services to someone other than the original oblige.

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(1) Rights under requirement and output contracts are _________ since the assignee might have far greater or lesser “output” or far different” requirements” than the assignor.

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xvii) Rights under requirement and output contracts are not assignable since the assignee might have far greater or lesser “output” or far different” requirements” than the assignor.

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xviii) Even if the assignment will not materially affect the obligor’s duty, it cannot

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(1) Alter essential terms of the contract, such as time or place of delivery.

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xix) No assignment would be made if it would require the obligor to

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(1) Assume a risk materially different form that originally contemplated.

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xx) Is the right to be insured under a specific policy generally assignable?

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(1) No.

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xxi) Is assignment permitted where personal credit is involved?

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(1) No.

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xxii) Traditionally, were contractual prohibits against assignment enforced?

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(1) No

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xxiii) Does the Restatement Second Section 322 adopt a strong rule of construction for contractual prohibitions against assignment?

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(1) No.

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xxiv) Does the UCC Section 9-406 render such provisions ineffective to prevent assignment of most types of rights to payment

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(1) Yes.

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xxv) May the duty be performed by some agent or servant of the original promisor (or an independent third party) without constituting a breach of contract, except in those cases where performance by a delegate would vary materially from the performance promised by the obligor

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(1) Yes.

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xxvii) A valid delegation of duties _____excuse the delegating party (delegant) from this duty to perform. It merely places the primary responsibly to perform on the delegate (who becomes the principal debtor). The delegant becomes secondarily liable (as surety) for performance of the duty promised.

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(1) Does NOT

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(1) A valid assignment of rights ____ to extinguish the rights in the assignor and sets them up entirely I the assignee.

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xxviii) A valid assignment of rights operates to extinguish the rights in the assignor and sets them up entirely I the assignee.

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(1) In contracts for the sale of goods, the very fact that duties of performance have been delegated _____ the obligee to demand assurances of performance form the delegatee.

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xxix) In contracts for the sale of goods, the very fact that duties of performance have been delegated entitles the obligee to demand assurances of performance form the delegatee.

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(1) Where the delegatee has expressly assumed the delegant’s obligations to the other contracting party, a _____________ exists—ie the typical assumption agreement.

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xxx) Where the delegatee has expressly assumed the delegant’s obligations to the other contracting party, a third party-creditor beneficiary contract exists—ie the typical assumption agreement.

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xxxi) Where delegatee has expressly assumed the duty, in the event of nonperformance, the delegatee is directly….

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(1) Liable to the obligee (creditor beneficiary)/

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xxxii) Where delegatee has expressly assumed the duty, the delegatee is also liable to the delegant (original obligor) for breach of the…

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(1) Assumption agreement.

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xxxiii) If the delegation is made apart form any assignment of rights under the contract, and there is no express assumption of a contarct duties, the delegatee’s only liability is…

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(1) To the delegant.

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xxxiv) May aright tot receive an employee’s services be assigned to a new employer? [Assignment of right to receive services—evening News Association v. Peterson]

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(1) Yes (2) Contract rights are assignable except where the assignment would vary materially the duty of the obligor, increase materially the burden of risk imposed by the contact or impair materially the obligor’s chance of obtaining return performance.

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xxxv) Does a franchisor have an implied duty to act in good faith and in a commercially reasonable manner when considering whether to grant a franchisee’s request to transfer its franchise rights? [Implied duty to act in good faith in approving assignments—Larese v. Creamland Daries, Inc]

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(1) Yes (2) Colorado courts have imposed a reasonableness requirement on consent to transfer clauses in various contracts such as this one.

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xxxvi) Is delegation of an obligation to service vending machines binding on the party who benefits from the servicing? [delegation of duty to receive services—Macke Co. v. Pizza of Gaithersburg Inc]

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(1) Yes (2) Not all service contracts involve personals services. The personal services duties that cannot be assigned are teahouse requiring rare genius or extraordinary skill.

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(1) An assignor’s interest in rights assigned ____ upon assignment. A delegant’s obligations are ____ by delegating duties.

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xxxvii) An assignor’s interest in rights assigned terminates upon assignment. A delegant’s obligations are not terminated by delegating duties.

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xxxviii) Where the delegated performance would be unsatisfactory to the obligee, the obligee may

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(1) Prevent the delegation.

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xxxix) What is required for the performance of delegation?

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(1) No special words or formalities are required for delegation. All that must appear is a present intent by the obligor-delegant to authorize another to perform the duty.