Delegation of duties in contract performance allows parties to transfer obligations to third parties, offering flexibility and efficiency. While most duties are delegable, some personal or specialized tasks remain non-delegable, preserving the contract's essence.

The delegation process involves selecting a suitable delegatee and notifying relevant parties. Importantly, the original party remains liable for performance, even if delegated, ensuring accountability and protecting the other party's interests.

Delegation of Duties in Contract Performance

Delegation of duties concept

• Involves transferring contractual obligations from one party to a third party (subcontractor)
  • Original party remains liable for performance of delegated duties to other contracting party
  • Allows flexibility in contract performance by shifting responsibilities
• Beneficial in various situations
  • Original party lacks expertise or resources to perform duties (construction project)
  • Original party wants to focus on core competencies (software development)
  • Delegatee can perform duties more efficiently or cost-effectively (manufacturing)
• Does not require consent of other contracting party unless specified in contract

Delegable vs non-delegable duties

• Delegable duties can be transferred to a third party without materially altering nature of contract
  • Most contractual duties are delegable unless prohibited by law, public policy, or contract itself
  • Examples include payment obligations (monthly rent), delivery of goods (shipment of products), performance of services (landscaping)
• Non-delegable duties cannot be transferred due to personal nature or specific skills required
  • These duties are essential to contract and delegation would fundamentally change agreement
  • Examples include personal services contracts (portrait painting), fiduciary duties (trust management), duties requiring unique skills or expertise (custom software development)

Process of duty delegation

1. Delegating party (delegator) identifies duties to be delegated
2. Delegator selects suitable third party (delegatee) to perform duties
3. Delegator enters into agreement with delegatee, outlining terms of delegation
4. Delegator notifies other contracting party of delegation, if required by contract

• Legal implications for original contracting parties
  • Delegator remains liable to other contracting party for performance of delegated duties
  • Delegatee assumes responsibility to perform delegated duties
  • Other contracting party can hold both delegator and delegatee liable in case of breach (construction defects)

Liability in delegation breaches

• Delegating party (delegator) liability
  • Remains primarily liable to other contracting party for performance of delegated duties
  • If delegatee breaches contract, other contracting party can seek remedies from delegator (refund, specific performance)
  • Delegator may have separate claim against delegatee for damages incurred due to breach (indemnification)
• Delegatee liability
  • Liable to delegator for performance of delegated duties
  • If delegatee breaches contract, delegator can seek remedies from delegatee (compensation, termination of delegation agreement)
  • In some cases, other contracting party may have direct claim against delegatee based on principle of third-party beneficiaries (product liability)