Business contracts and 3rd party rights?

Question by PP: Business contracts and 3rd party rights?
When assigning rights and delegating duties to a of a contract to a 3rd party, are rights and duties interchangeable? For example, if Alex promised to build a house for Billy for $ 500,000, Alex has the right to collect money from Billy, but also has a duty to build the house…and Billy also has the right to get his house, but has a duty to pay Alex…is this correct?

So, would that mean that the assignor and assignee be interchangeable also? Excluding any rules/exceptions, Alex could assign someone else to build the house, and Alex could assign someone else to pay, correct?

Lastly, if Alex (assuming he needed the money now but is still building the house) assigned his right to receive his payment to 3rd party Chris, is Chris now the obligee? And Billy remains to be the obligor (one who owes duty being transfered)?

Best answer:

Answer by normobrian
Aside from the fact that your qustion is as clear as Mississippi Delta water, I’ll try to answer it.

If party A contracts with party B to perform a duty (build a house, in this case), then party A has no legal recourse against party C (subcontrctor hired by party B).

You first scenario is correct. In exchange for money, Alex has a duty to build the house. Subject to the terms of the contract, Billy has a duty to pay Alex (provided Alex has fulfilled his duties).

While Alex can assign the duty of building the house under a separate contract to someone else, it woiuld not relieve him of his responsibilities under the contract with Billy. Any penalties for delays, for example, would be payable from Alex to Billy, irrespective of the other party.

If Alex is contracted to build the house, he cannot assign liability to a third party, regardless of the payment structure he sets up. Chris is not obliged under any covenents of the contract between Alex and Billy, he is merely a payee, like a bank. Alex is always and forever bound to deliver whatever he promises in his original contract.

If I make a contract with Alex to build a house, ready to move into by a certain date, and he does not deliver it, for whatever reason, my beef is with Alex, not the painters he hired, or the framers, trim crpenters, electricians, plumbers, etc. Alex is the only one I can sue, and he canniot assign that liability to anyone else.

What do you think? Answer below!