Delegating Your Contractual Duties – What Does this Mean?
Picture this: you’ve just entered into a lucrative landscaping contract. In order for you collect any money, you have to carry out your duties, or "perform." But at the exact same time you are supposed to begin redesigning the land, an opportunity to travel to South America knocks, and you really want to open that door. Is it possible that you could delegate your contractual duties to another landscaper for a tiny percentage of your profits, and still travel and earn money simultaneously? In other words, can you have your cake and eat it too?
Next, we’ll take a look at whether to delegate your contractual duties or not.
To Delegate, or Not to Delegate
in the contract world is the transfer of your contractual duties to another party. The law generally does not require you to take any specific steps in order to delegate your duties. The only requirement is that the person delegating his or her duties must intend to make the delegation in the present.
In order to ensure that your transfer is valid in the eyes of the law, you need to be aware of the types of duties that may be delegated. Generally speaking, all contractual duties may be delegated to a third party. But don’t get so excited that you stop reading this article, turn off your computer, and start making phone calls so you can hand out your obligations like a hot-dog vendor in New York City. In the real world, where there is a rule, there is usually a heap of exceptions, and the realm of delegation is no different. Let’s break down the exceptions one by one.
First, you cannot delegate any of your duties if they require you to implore your personal judgment. Huh, you ask? Let’s clear this exception up with an example. Assume that you are a professional baseball scout, and you have been hired by a Major League Baseball team to scout this year’s brood of up-and-coming high school superstars. You were likely hired by this team because you have exhibited some type of superior judgment when it comes to determining the level of skills and natural talent that lie within baseball players. Because your job is one that requires you to use your personal judgment, you may not delegate your duties of scouting to another individual, even if you feel that he or she is just as skilled as you are in this particular practice. So remember, if your personal judgment is wrapped up with your contractual duty, you and you alone must carry out the task.
Another major exception to the general rule that all contractual duties may be delegated deals with specially recognized relationships. This exception generally applies to relationships between doctors and patients, attorneys and clients, clergymen and penitents, and the like. In these types of relationships, the person seeking the "help" usually places a considerable amount of trust into the person providing the "service." Additionally, this help-seeker has probably chosen this particular service-provider based on a number of factors, like qualifications, certifications, and good reputation, just to name a few. When one person has placed a special trust in another, the service-provider may not delegate his or her duties. For example, let’s assume that you have made the very difficult and painful decision to leave your husband or wife. The two of you have been unhappy for too long, and you know that the decision to lead separate lives is the best way to handle the situation. In order to ensure that you make this painful time in your life as painless as possible for your two young children, you hire a renowned divorce attorney who specializes in divorce proceedings that involve children and custodial issues. It is clear that you have hired this person because of his or her reputation and capabilities, and you have placed a special trust in him or her to make the transition go as smoothly as possible. Here, this attorney would not be permitted to delegate his or her duties to another attorney, because he or she was hired based on a number of important factors.
The third main exception to this general rule is that you can only delegate your contractual duties to a person capable and qualified to carry out the duties of the contract. In other words, if this person’s performance of the duties would change the other party’s expectancy under the contract, no such delegation is valid in the eyes of the law. For example, let’s assume that a stationary store contracts to buy from a particular manufacturer all the colored paper that their business requires, and the manufacturer agrees to sell that amount each month to the store. Now, let’s assume that the manufacturer delegates its duties to a smaller store that only manufactures black and white paper. Here, such a delegation would not be valid because the stationary store’s expectancy that the manufacturer can provide them with all the colored paper they require has changed in a significant manner.
There is one final exception to the general rule that all contractual duties are delegable to a third party. This is the simplest exception, and the easiest one to remember. If the terms of the contract restrict the right to delegate duties, then a party may not do so. This is usually found in a boilerplate "Anti-Delegation Clause," which may look something like this: "No party may delegate any performance under this Agreement." If the clause exists, then your right to delegate does not.
Next, let’s take a look at your rights and liabilities as the delegator (i.e. the person delegating the duties to another).
Knowing Your Rights (and Liabilities)
With the delegation of duties, each of the parties, including the party to whom the delegation was made, maintains certain rights and liabilities with regard to the contract.
As to the party who delegates his or her duties (i.e the delegator), he or she will remain liable on the contract. This means that if the party you delegated to perform your task does not do so, you will be liable to the other party to the contract. Depending on the type of contract, you may be required to pay damages, or you may be required to simply perform your duty. Regardless, you will still be liable.
As the delegatee (e.g. person receiving the duty to delegate from another person, i.e. the delegator), your liability under a simple delegation is minimal. The other party to the contract cannot compel you to perform the duties required. If you fail to perform, the original party to the contract will be liable to the party who was expecting some type of performance. This situation is slightly different if the task was delegated to you and you were given ample consideration (some form of payment for your work). Under these circumstances, the other party to the contract can compel you to perform, and failure to do so on your party could result in having to pay damages or rectify the situation accordingly.
Lastly, as the party to the contract who is neither the person delegating the duties nor the person to whom the duties were delegated, your situation is fairly simple: as long as those duties were delegable duties (in other words, they don’t fall under any of the exceptions explained above), you must accept performance from the delegate.
Finally, let’s wrap up this article with some main points to keep in mind.
In conclusion, the rules of delegation are fairly straightforward. Keep in mind that most contractual duties are delegable, subject to the exceptions outlined above. Be attentive to both your duties and the exceptions that may apply in order to ensure that performance of those duties is carried out legally and properly. Entering into a contract is something that should be done with careful thought, and you should always be aware of your rights and liabilities. As always, if you have any questions as to whether or not you may delegate your contractual duties to a third party, contact your attorney.
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