What Is the Difference Between Assignment and Delegation?
The difference between assignment and delegation is that an assignment can't increase another party's obligations.3 min read
2. When You Can't Assign Contractual Obligations
3. Defining Delegation
4. Is Third-Party Consent Required for Assignment and Delegation?
5. Consequences of Assignment
6. Consequences of Delegation
7. Delegation of Performance
Updated October 20, 2020
The difference between assignment and delegation is that an assignment can't increase another party's obligations. Delegation, on the other hand, is a method of using a contract to transfer one party's obligations to another party. Assigning rights is usually easier than delegating, and fewer restrictions are in place.
The Process of Assignment
With a contract, each party involved holds certain rights. When the party referred to as the assignor gives his or her rights to the party known as the assignee, this is called the process of assignment. For example, if you are a contractor doing house repairs and have agreed to perform a job for a specific amount of pay, you can assign your right to receive that specific amount of pay to another person. If you do this, it means your rights under the contract have been assigned, by you, to that other person.
When You Can't Assign Contractual Obligations
Most of the time, the parties involved in a contract are able to freely assign their rights, but there are times when that isn't an option. One example is if a company enters into an enforceable agreement, also called a contract, to provide a specific amount of merchandise to a store or boutique. The store or boutique can't have the products delivered to a location that's farther away because that would increase the original company's obligation and delivery costs without their permission or agreement. Contracts are also sometimes written to prohibit assignment.
When you transfer duties, you have contractually agreed to perform, that's the delegation of your obligations, with the difference between delegation and assignment being that you aren't transferring rights, you're delegating obligations to a different party. Delegating duties you have contractually agreed to is typically permitted, but there are times when delegation isn't allowed.
- When the delegation of obligations would alter the scope of the agreement, it isn't allowed.
- A promise to repay a debt usually can't be delegated.
- Delegation isn't allowed if the parties involved in the contract draft that into the agreement.
Is Third-Party Consent Required for Assignment and Delegation?
Third-party consent isn't a requirement for a contractual assignment, which is linked to rights in an enforceable agreement. A delegation, however, does require that the person being assigned the task be not only aware, but they must explicitly accept the responsibility being assigned. The term for this type of delegation is the delegation of the performance of a duty. While the consequences of assignment and delegation aren't the same, the terms can be used in an interchangeable manner when consequences aren't involved.
Consequences of Assignment
Consequences of assignments include:
- The assignee's right to file a suit against the obligor if performance falls short.
- The obligor gets the same protection against the assignee the assignor gets.
- The obligor's payments to the assignor stay in effect until the obligor knows about the assignment.
- A contractual modification set up between the obligor and assignor remains in effect if the obligor was unaware of the assignment.
Consequences of Delegation
Delegation's consequences include:
- The liability falls to the party delegating the obligation to another party.
- The delegatee only has an obligation to the Obligees when consideration, or some form of payment, is received from the delegating party.
Assignments and delegation can only happen if the boundaries set by the contract allow it. Businesses often restrict the ability to assign rights or delegate duties because of not being sure who the rights or duties might be assigned to if not stopped contractually. This especially applies to delegation.
Delegation of Performance
No delegation of performance is able to relieve the delegating party's obligation to perform as contracted, and it doesn't remove liability for breach of contract. The right to receive damages in the event of a breach of contract can, however, be assigned regardless of an agreement that states otherwise. If the other party in the agreement designates performance as a factor that creates a sense of insecurity, they can then treat an assignment as a reason to demand assurances from the assignee. The original promise to perform is then enforceable by the assignor to the other party who was part of the original agreement.
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