Delegation and Novation Lecture Notes PDF

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Contracts II Lecture Notes on Delegation and Novations...

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Contracts II Rules of Law Lecture Notes Delegation of Duties Restatement 318 and UCC 2-210 An obligor is entitled to delegate her contractual duties unless this violates the contract or public policy. Any contractual duty may be delegated to another, unless the oblige has a substantial interest in having the original obligor perform personally because it involved the personal service or skill of the obligor. (case of artistic performances). Delegation is prohibited where the oblige is forced to accept a material increase in burden or risk. Delegator! the person who transfers the duty Delegate! the person whom the duty is transferred Obligee !the party to whom the delegated duty is owed under the original contract Obligor empowers a delegate to perform a duty that the delegating party owed to an oblige. Any contractual duty may be delegated to another. Delegation of one party’s duties to another can have a significant impact on the other party to the contract. Obligor remains liable for any breach and can be sued by the oblige for breach if the delegate fails to perform or renders a defective performance. If delegate fails to perform or renders a defective performance, the oblige has a cause of action against the obligor. Exception: if the duty is delegated by a contract between the obligor and the delegate, then the delegate’s promise to the obligor to perform the obligor’s duty is viewed as a contract for the benefit of the oblige, who now enjoys status as a TPB. Obligee has the direct right of enforcement against the delegate.

Novation: used to describe a substituted contract If the obligor did not want to remain liable to the oblige, then it would seek novation. ! a novation is a new contract wherein the oblige discharges the obligor from her duties under the contract and agrees to accept the delegate as a complete substitute. IN effect there are two new parties to the contract. The original obligor is no longer the party in privity....