Key Terms
Assignment
The transfer of contractual rights from one party to another.
Delegation
The transfer of contractual duties from one party to another.
Construction industry
A general contractor assigns rights and delegates duties to subcontractors. The general contractor may delegate the duty
Example
A business hires a landscaper to improve its property. The neighbors benefit — improved appearance, higher property valu
Novation
A new contract that transfers all rights AND duties to a new party and releases the previous party from any further obli
Third party beneficiary
Someone who is NOT a party to the contract but stands to benefit from it.
Classic example
Life insurance. The insurance company and the insured are the contracting parties.
Intended beneficiary
The parties to the contract specifically intended this person to receive the benefit.
Incidental beneficiary
Benefits from the contract but the parties had no intent to benefit them.
ANSWER
Yes. Assignment/delegation does not release the original party.