1. Transfer of Contracts and Remedies for Breach
Chapter 12
Transfer of Contracts and Remedies for Breach

2. 12.1 The Transfer of Contractual Rights and Duties
After finishing this section, you will know how to:
Explain the nature of an assignment
Identify contractual rights that can be assigned
Explain the nature of delegation
Explain the nature of novation
Identify a situation involving privity of contract

3. Assignment- THE TRANSFER OF A RIGHT UNDER A CONTRACT
Assignor- THE PARTY WHO TRANSFERS THE RIGHT
Assignee- THE PARTY TO WHOM THE RIGHT IS TRANSFERRED
Example 1

4. THIS SHOULD BE WRITTEN, IT IS HARD TO PROVE AN ORAL ASSIGNMENT
Example 2
THIS SHOULD BE WRITTEN, IT IS HARD TO PROVE AN ORAL ASSIGNMENT
LEGALLY BOUND TO PAY THE ASSIGNEE ONLY
Party A
Assignor
Party B
Right
Duty
Assignment
Third Party
Asignee

5. Rights that may be assigned:
MOST RIGHTS MAY BE ASSIGNED UNLESS IT CHANGES THE OBLIGATION OF THE OTHER PARTY
Example 3
ONLY ASSIGN THE RIGHTS YOU HAVE
Most common: PAYMENT OF MONEY, DELIVERY OF GOODS
Example 4

6. Transfer of Duties Delegation- TRANSFER OF DUTY
PERFORMANCE OF AN OBLIGATION MAY BE DELEGATED—RESPONSIBILITY MAY NOT
Example 5

7. Commonly called: SUBCONTRACTING
Duties that may not be delegated when:
A PARTY AGREES TO PERFORM THE SERVICE PERSONALLY
THE CONTRACT CALLS FOR THE EXERCISE OF PERSONAL SKILL AND JUDGMENT
THE CONTRACT ITSELF PROHIBITS DELEGATION
Example 6

8. Duties that require personal skill and judgment include: TEACHERS, WRITERS, ARTISTS, OR ENTERTAINERS.
THE OFFEROR AND THE OFFEREE MAY INCLUDE IN THEIR CONTRACT AN AGREEMENT THAT THE CONTRACT MAY NOT BE ASSIGNED OR DELEGATED.
BOTH PARTIES ARE RESTRAINED
Example 7

9. Novation- AN AGREEMENT WHEREBY AN ORIGINAL PARTY TO A CONTRACT IS REPLACED BY A NEW PARTY
Example 8
SUBSTITUTION REQUIRES THE CONCENT OF BOTH PARTIES

10. Third Parties
Privity of contract- RELATIONSHIP BETWEEN THE PARTIES TO A CONTRACT
DETERMINES WHO CAN SUE WHOM OVER QUESTION OF PERFORMANCE REQUIRED BY A CONTRACT
Third-party beneficiary- A PERSON WHO IS NOT A PARTY TO A CONTRACT BUT WHO BENEFITS FROM IT

11. 12.2 Remedies of the Injured Party
After finishing this section, you will know how to:
Explain the concept of anticipatory breach
Identify remedies available for breach of contract
Define specific performance
Explain why you must minimize the damages involved in a breach of contract

12. Breach of Contract
Breach of contract- WHEN ONE OF THE PARTIES FAILS TO DO WHAT HE OR SHE AGREED TO DO
Anticipatory breach- PARTIES TO A CONTRACT NOTIFY THE OTHER PARTY OF THEIR INTENTION NOT TO GO THROUGH WITH THE CONTRACT BEFORE THE TIME FOR PERFORMANCE
YOU MAY BRING SUIT AS SOON AS YOU’RE NOTIFIED THAT THE OTHER PARTY TO THE CONTRACT IS GOING TO BREACH THE CONTRACT
THIS DOESN’T APPLY TO THE PROMISE OF MONEY—MUST WAIT UNTIL THE DATE THE MONEY WAS PROMISED TO BE PAID BY

13. Remedies of the Injured Party
Remedy- A LEAGAL MEANS OF ENFORCING A RIGHT OR CORRECTING A WRONG
The injured party may:
ACCEPT THE BREACH
ASK FOR MONEY DAMAGES
ASK THE COURT TO ORDER THE OTHER PARTY TO DO WHAT THEY AGREED TO DO

14. Accept the Breach THERE ARE NO DAMAGES SMALL AMOUNT OF DAMAGES
Nominal damages- VERY SMALL SUM OF MONEY $1.00
BREACH BUT NO REAL LOSS SUFFERED
JUDGMENT LASTS FOR 20 YEARS

15. Money Damages
Damages- PAYMENT RECOVERED IN COURT BY A PERSON WHO HAS SUFFERED AN INJURY
BRING THE INJURED PARTY TO THE POSITION THEY WERE IN BEFORE THE CONTRACT

16. Actual damages- AN AMOUNT OF MONEY AWARDED FOR DAMAGES DIRECTLY ATTRIBUTED TO ANOTHER PARTY’S BREACH OF CONTRACT
Example 9: Contract Price $10,000
- Market Price 8,000
Actual Damages 2,000

17. Incidental damages- ANY REASONABLE EXPENSES RESULTING FROM A BREACH
Liquidated damages- DAMAGES AGREED UPON BY THE PARTIES WHEN THEY FIRST ENTER INTO A CONTRACT
MUST BE REASONABLE
Example 10

18. Specific Performance
Specific performance- INJURED PARTY ASKS THE COURT TO ORDER THE OTHER PARTY TO DO SPECIFICALLY WHAT HE OR SHE AGREED TO DO
Example 11

19. Minimizing Damages
Mitigation of damages- INJURED PARTY MUST TAKE ALL REASONABLE STOPS TO MINIMIZE DAMAGES
Example 12

20. Assignment
Page 249 #1-5 and CT
Page 255 #1-4 and CT