Read the overview below and complete the activities that follow.

Contracts are typically private agreements in that they bind the two parties and no one else. Thus, parties not in privity of contract usually do not have rights to a contract. However, there are exceptions to the general rule. This activity outlines the importance of paying special attention to ramifications that result from assigning or delegating a contract, including the effects these actions have on assignees.

CONCEPT REVIEW:

Contracts create situations in which both parties have a duty to perform the agreed$-$on action and a right to be the recipient of the other party's duty. These rights and duties can be transferred to third parties. The transfer of rights is known as assignment; the transfer of duties is known as delegation.

Mini$-$Case:

Read the case and then answer the questions to create a strategy for how someone might determine the results of the scenario.

Katerina owned property in Miami right on the beach that she leased to Scotty. Scotty used the property for business purposes, which was allowed under the lease. Three months into the lease, Scotty transferred his lease to a sports agent company for $$5,000,$ which became the new tenant under the lease. Katerina became upset with Scotty's transferring of the lease because she thought that since she leased the property to Scotty, he should not be allowed to let anyone else lease the property. Furthermore, she had a strong aversion to sports agents after watching the movie Jerry Maguire, and she did not want any money$-$grubbing sports agents working on her property. Subsequently, Katerina wonders whether there is any way she can limit the ability of Scotty to transfer the lease.

Walk through the different types of transferring of rights and duties. What type of transfer of rights or duties is described in this case? What is the role of the relevant parties in the case? Katerina clearly does not like the transfer of the lease. Are there any factors that could limit the transfer of these rights or duties?

Suppose Katerina included an antiassignment clause in the contract. Does this clause automatically limit any assignments Scotty might wish to engage in$?$

Multiple Choice

No$,$ antiassignment clauses never fully limit assignments.

Yes, antiassignment clauses always limit assignments.

Sometimes, if worded improperly or ambiguously, the clause does not effectively limit assignments.