Enforceability of Anti-Delegation Clauses

Analysis of Anti-Delegation or Anti-AssignmentClauses
An assignment or the delegation provision is that clause that specifies a party’s ability to assign the rights or delegate the duties that are mentioned in the contract. It is stated that it is a provision that is placed in the miscellaneous or general section of the clauses. In many of the cases, it is seen that the parties often overlook these clauses, and they sign without giving much of a thought to it. One of the first questions that are needed to be asked is whether the parties are in for the assignment or are in the opinion that there should be a bar to the same. In many jurisdictions, the free delegation of the contract is kept open when the contract is silent about it. In the contracts, there can also be the option to either transfer the whole of the contract or to transfer some of the rights and obligations. The words in case do not assign the same must be stated in express terms. In the contract, it must be stated whether the contract permits the assignment or restricts the assignment of the same. In case the assignment is permitted, it is important that the consent of the party is obtained in the express terms. The parties that are there in the contract must not ignore the general clauses that are mentioned in the anti-delegation or anti-assignment clauses.

Enforceability of Anti-Delegation Clauses
A delegation or assignment is like a transfer of the rights and duties that are mentioned in the contract. If the agreement permits, then the rights can be delegated; if not, there will be no delegation of the rights. It is stated that assignments do not naturally relieve the liability from the party as to who is assigning. Depending on the nature and the type of contract, the party who has been assigned will still have obligations like a guarantor or an assignor. When the detailed analysis of the above statement is done, it is stated that the assignor who is a party to the contract will be responsible for the breaches. Many of the contracts do not permit the delegation of the rights and liabilities of the contract. Such a clause in the contract is typically stated as an anti-delegation clause. The anti-delegation clauses that perform up in the contract can be of various types and various nature. The basic feature that underlines most of the anti-delegation clauses is that it restricts one or both of the contracting parties, not leave out the rights and the duties that are involved in the contract.Many times, when a contract is thoroughly analyzed, it can be stated that the anti-delegation clauses in the contract are typically drafted in an almost similar manner. There are instances where the anti-delegation clauses are buried in the miscellaneous provisions, which contain several other boiler plates. In certain contracts, there is a possibility of delegation of the rights and the duties that are involved in the contract. In such contracts, there can be a path delegation of the rights and duties that are involved in the contract, or there can be a full delegation of the contract as a whole. Many a time, delegation clauses in a contract may come as a change of power and control, which will take shapes such as a merger, consolidation, or acquisition.

Negotiation of Anti-Delegation Clauses
There are times when the anti-delegation aspect in the contract may not be to a party’s complete benefit. Many times to make the contract functional, they need to be a delegation or an assignment to certain third parties.

Certain contracts often do not allow or permit the activity of assignment, and that is when the parties need to negotiate the delegation aspect of the contract.

The negotiation aspect of the delegation clause of the contract may culminate in the form of an exception to the anti-delegation clause. When careful observation of the legal precedents has been undertaken in this aspect, it is seen that several courts have ruled that delegation of the rights does not make a party lose its power. The contract can also state that if a party wants to delegate the rights, there is a need to be taken express written consent from the delegator. It is also stated that the consent that is needed to be taken requires the involvement of free consent.

In case the contract does not have anti delegation clause, contracts are generally assignable even without the consent of the other party. This position of law corresponds with the Uniform Commercial Code (UCC). Uniform commercial code is a group of laws that governs the sale of goods, preferred that that is a free transfer ability offer on types of property.

Enforceability of Anti-Delegation Clauses

Undisclosed Principal: Concepts and Rules
In the ordinary course of agency, the agent needs to disclose all the complete facts regarding his agency, name, and details of the principal to the third party. However, in some cases, the agent may intentionally or unintentionally not disclose the principal’s name. The former agency is similar to the disclosed agency with one dissimilarity that the principal’s details are not revealed. The agent worked on behalf of the undisclosed principal and formulated the contracts with the third parties, and the principal reaps the result of the same. The various relationship that an undisclosed principal has is stated below:

Undisclosed Principal and Agent: the rights and rights, and duties between the agent and undisclosed principal are the same as the agent and the disclosed principal.

Undisclosed Principal and Third Party: in the agency relationship of a third party, undisclosed principal, and third party, the agent must have the actual control.

Agent and Third Party: If the agent does not notify the third party that he is working for an undisclosed principal, the agent will be the principal and can sue and be sued.

Rights and Liabilities of the Undisclosed Principal
Under the Restatement (Third) Agency Laws Section 2.06 of the United States, the concept of the undisclosed principal is mentioned. There are certain rights and liabilities of the undisclosed principal. The rights of the undisclosed principal are stated as follows:

The undisclosed principal can sue the third party for the matters related to the contract, such as the non-performance of the contract.

It is the right of the undisclosed principal to supervise the contract’s work and regulate the agent’s behavior.

Certain liabilities are attached to the undisclosed principal; they are:

The undisclosed principal remains liable to the third party for the price of the goods and services provided under the contract that is made in the agent’s name.

The agent has disclosed the identity; it is stated that the third party can take action for any payable amount and decided under the contract.

The fixing of the rights and the liabilities upon the third party and the undisclosed principal is stated to be of substantial importance.

Ratification by Undisclosed Principal
In the United States, this rule has been followed for more than a hundred years, and there has been no adequacy to find the reasons advanced for the rule. The rules that govern the undisclosed principals have been criticized repeatedly because it fails to differentiate between the disclosed principals and the undisclosed principals. It is also stated that if the principal’s agent has acted without the knowledge of the principal, he is not bound to act. According to the observance of many learners, the rule which states that undisclosed principals do not have the right to ratify the contract, according to the observance of many learners, can be stated as an outdated rule that cannot be sustained in the present legal scenario. To prove that it is an outdated rule, it is stated that the rule goes against the rights and liabilities of the undisclosed principals. The rule seems to have been based on a legal fiction.