A music promoter contracted with a venue to host a concert on October 1st for $10,000. The contract stated that the promoter would pay the venue $5,000 upfront, and the remaining $5,000 after the concert. The contract also contained a clause stating, 'This agreement is assignable by either party with written consent of the other party.' Two weeks before the concert, the promoter assigned all his rights and delegated all his duties under the contract to another promoter, 'New Promoter,' without seeking the venue's consent. New Promoter then contacted the venue to confirm the arrangements. Is the assignment and delegation by the original promoter valid?
- AYes, because the clause only restricted assignment of rights, not delegation of duties.
- BNo, because the original promoter remains primarily liable even after the assignment and delegation.
- CYes, because contracts for concert hosting are generally assignable and delegable.
- DNo, because the clause requiring written consent was not met, making the assignment and delegation ineffective.
Show answer & explanationAnswer & explanation
Correct answer: D. No, because the clause requiring written consent was not met, making the assignment and delegation ineffective.
A clause prohibiting 'assignment of the contract' (or 'this agreement') is often interpreted to bar both the assignment of rights and the delegation of duties. Since the contract explicitly required written consent for assignment by either party, and the original promoter did not obtain this consent, the attempted assignment of rights and delegation of duties is ineffective as against the other party (the venue). The venue can refuse to deal with the New Promoter.
Why the other options are wrong
- A. Language prohibiting 'assignment of the contract' or 'this agreement' is typically construed to restrict both assignment of rights and delegation of duties.
- B. While the original promoter would indeed remain liable after delegation (unless a novation occurred), the question is about the *validity* of the assignment/delegation in the first place given the consent clause.
- C. While many contracts are assignable/delegable, specific contractual clauses restricting these actions are generally enforceable.
Contractual Prohibition of Assignment/Delegation
A contract clause that restricts a party's ability to assign their rights or delegate their duties under the contract to a third party. Such clauses are generally enforceable, but their interpretation (e.g., whether they prohibit only assignment of rights or also delegation of duties) can vary.
- A general prohibition against 'assignment of the contract' is usually interpreted to bar both assignment of rights and delegation of duties.
- Such clauses generally make the assignment/delegation ineffective as against the other party, but do not necessarily prevent the assignor/delegator from being liable for breach.
- Exceptions exist, such as assignment of a right to receive money or assignment of a negotiable instrument.
- A true prohibition requires clear and explicit language.
Memory trick: Pass it on, unless the contract says 'NO'!