Quiz 11: Third Party Rights and Discharge


In this bilateral agreement Company E decides to assign the right to payment to Company GC whereas the contract clearly mentions that the right cannot be assigned otherwise the contract is rendered void. This rule has several exceptions (for example the right to negotiable funds) however the present cast cannot be classified as an exception. So in this case Company GC cannot force the contract against Mr F as Company E did not have the right to assign the right to payment to Company GC as per the contract.

The difference between an assignment and a delegation: In a contract where there are two parties and both have equal rights and duties. There is requirement by one party for the other to complete a specific task and the other party has a duty to complete the task. In some cases one of the parties might want to transfer her or his legal rights to some other person under the contract. The transferring of the rights by one person to another person is known as the assignment. The importance of the assignment can be judged by the fact that it is used intensively in the financing of the businesses. Therefore when the rights are transferred by one party to another person it is known as assignment, just similarly to this even duties can be transferred. Generally duties are not assigned they are said to be delegated. Therefore delegation of duties can be referred to as the transfer of duties either in part or completely to a third person.

Assignment: under assignment the rights of the first party passed onto the third party. The party assigning the rights is termed as "assignor" and the party receiving the rights is termed as "assignee". The assignee can demand a performance from the second party in a contract. Delegation: under delegation a particular task is delegated to a third party and responsibility of the third party is limited to the extent of completing that task only. Difference between Assignment and Delegation: img

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