This week I revisited my 2012 post on rethinking the “no assignment” provision (here). It reminded me that there’s a general point buried in that post. Here it is:
It’s commonplace for contracts to contain something along the following lines: Neither party may assign this agreement without the consent of the other party. In Negotiating and Drafting Contract Boilerplate (Tina Stark ed. 2003), Tina Stark says that it makes more sense to refer to assigning rights and delegating obligations: “An assignment is a transfer of a right to performance to a third party,” whereas “delegation is the appointment by one person of another to perform either a duty or a condition to the other party’s performance.” So her recommended language includes No party may assign and No party may delegate.
By contrast, I use only the verb transfer with respect to both rights and obligations. That’s because using assignment with respect to rights and delegation with respect to obligations might serve some purpose for scholarship and judicial opinions, but it serves no purpose for contracts, other than to add unnecessary fussiness.
That’s because if I say I’m transferring rights and transferring obligations, there’s no question that that’s what I’m transferring. I’m in effect assigning those rights and delegating those obligations without my having to use the words assign and delegate. To hold otherwise would be to require that the drafter wield magic words—in other words, code. That’s not the way courts work.
It’s appropriate that contract language be as simple as possible—contracts are complicated enough as it is without our adding unnecessary complexity.
By using transfer, am I dumbing contracts down? No—what’s dumb is insisting on distinctions that have no practical significance.
This is hardly an isolated example. Traditional contract language contains other terms of art used in a way that’s pointless or downright confusing. Why say attorn when you can say consent? (See MSCD 13.57.) Why say that an amendment “does not serve to effect a novation” when you could say that it “will not result in any of the Obligations being replaced.” (See MSCD 13.479–.480.) Why say represents and warrants when you can say states? (See this article.) I could go on.
Continued use of unnecessary terms of art is a function not of their utility but of inertia.
Delegate? Who thought that one up? If I transfer my obligations to someone else, with the agreement of the beneficiary of those obligations, so that I am completely relieved of those obligations, in what sense am I delegating them? It’s the wrong word. You delegate duties to a subordinate, someone who represents you. That is different from permanently transferring them to someone else.
Is this really a doctrinal term of art, or a bit of lawyer’s misconceived jargon?
*crawls into foxhole, puts tin hat on, and waits*
I don’t do delegate, so I’m not about to argue for it.
The idea is that, to quote Stark, “Delegation of a duty does not discharge the delegating party’s performance obligation. … [T]he delegating party is discharged if there is a novation.” So you have your choice of magic words.
Include me out.
Agreed. The term ‘delegation’ would be more related to a subcontracting arrangement.
“Delegate” is a term of art, as Ken described. It was in my study guide for the bar exam.
But I want to put a finer point on “assign.” You refer to “transferring” contracts, which I have no disagreement with. But then you say more generally to “transfer rights and obligations.” Using “transfer” instead of “assign” when you’re taking about intellectual property rights (not the contracts, but the rights) creates ambiguity because it’s not clear what exactly is being transferred, whether it is all interests of every kind and the transferor retains nothing (an assignment) or only some subset of rights (a license). So when you’re talking about transferring IP, it’s best to use either the word “assign” or “license.” The document itself is still subject to a court’s interpretation of which it REALLY is, but you at least get it framed the way you want.
But if you’re switching verbs, you’re still using code. How about being more specific about what you’re transferring?
Right, if that’s the context I’m fine with it and why I distinguished contracts from the underlying rights. But your post generalized more.
Agreements should (and almost always do) have more details than just a single word choice. But where there are two words for distinct categories, I believe it is better to use the correct word to describe the general category you’re aiming for to frame the context. You wouldn’t say you are “transferring” a house rather than “selling” it or “leasing” it, even though you have more details about the transaction than that in the agreement. There are frequent disputes over whether a transfer is an assignment, exclusive license or nonexclusive license (which is critically important to standing), so your word choice will at least puts some points in your column when the court is trying to figure out.