Text 2 Delegation of Duties under a Contract

Routine contractual duties may be delegated (turned over) to another party. However, a person cannot delegate to another any duty where performance requires unique personal skill or special qualifications.

A delegation of duties is not an assignment of the contract. The original party to the contract is till obligated and liable for proper performance even though someone else may actually do the work. Thus, a general contractor who agrees to build a house is responsible for providing the finished structure as promised. However, the general contractor almost always delegates most of the work to subcontractors. Subcontractors are specialists who lay foundations and do masonry, carpentry, plumbing, electrical, painting, and other work. The general contractor makes individual contracts with them and pays them as agreed. The subcontractors are responsible to the general contractor for proper performance. But the general contractor remains responsible to the buyer for the finished job. The general contractor, in a separate contract, may also assign to bank the right to collect all or a percentage of the purchase price from the buyer. This is often done even before construction has begun so that the general contractor can buy materials and pay for labour.

Sometimes a contracting party will both assign rights and delegate duties.

It is possible for the party entitled to receive performance under a contract to release the other party from the duty to perform and to accept a substitute party. This is neither assignment nor delegation of duties. It is referred to as a novation; in effect, a new contract is formed.