Opinion ID: 346865
Heading Depth: 2
Heading Rank: 2

Heading: The Crunch Agreement.

Text: 38 There is no dispute that the sale of Famous' record division to ABC constituted an assignment of the Crunch agreement to ABC. The assignment of a bilateral contract includes both an assignment of rights and a delegation of duties. See 3 Williston on Contracts § 418 (3d ed. 1960). The distinctions between the two are important. 39 Perhaps more frequently than is the case with other terms of art, lawyers seem prone to use the word assignment inartfully, frequently intending to encompass within the term the distinct (concept) of delegation . . . . An assignment involves the transfer of rights. A delegation involves the appointment of another to perform one's duties. 40 J. Calamari & J. Perillo, Contracts § 254 (1970) (footnote omitted). Famous' arguments with respect to the Crunch agreement ignore this basic distinction, and the result is a distortion of several fundamental principles of contract law. 41 It is true, of course, as a general rule, that when rights are assigned, the assignor's interest in the rights assigned comes to an end. When duties are delegated, however, the delegant's obligation does not end. 42 (O)ne who owes money or is bound to any performance whatever, cannot by any act of his own, or by any act in agreement with any other person, except his creditor, divest himself of the duty and substitute the duty of another. No one can assign his liabilities under a contract without the consent of the party to whom he is liable. 43 This is sufficiently obvious when attention is called to it, for otherwise obligors would find an easy practical way of escaping their obligations . . . . 44 3 Williston on Contracts § 411 (3d ed. 1960) (footnote omitted). This is not to say that one may not delegate his obligations. In fact, most obligations can be delegated as long as performance by the delegate will not vary materially from performance by the delegant. 11 The act of delegation, however, does not relieve the delegant of the ultimate responsibility to see that the obligation is performed. If the delegate fails to perform, the delegant remains liable. Davidson v. Madison Corp., 257 N.Y. 120, 125, 177 N.E. 393, 394 (1931); Devlin v. Mayor, 63 N.Y. 8, 16 (1875). 45 Judge Owen correctly charged the jury that after the assignment of the contract by Famous to ABC, Famous remained liable for any obligation that was not fulfilled by ABC. This was a correct statement of the law, and Famous' assault upon it, while valiant, is without merit. 46 Our conclusion also disposes of Famous' evidentiary argument. The argument is that since Famous is being held liable for a breach by ABC, and since the only proof of a breach by ABC was proof of ABC's repudiation, and since the evidence of repudiation was hearsay, 12 there was no admissible proof of a breach by ABC, and, therefore, Famous cannot be held liable. This argument fails because it was unnecessary for Contemporary to prove that ABC breached, or repudiated, any obligation. All Contemporary was required to do was to prove that no one performed Famous' obligation to promote after the sale to ABC. This it clearly did. Performance by ABC would have been an affirmative defense for Famous, 13 but in order to prevail it was not necessary for Contemporary to disprove an affirmative defense that was neither pled nor proved by Famous. Because Contemporary's proof of ABC's refusal to perform was unnecessary to make out its cause of action, we need decide whether that proof was admissible. 47 Famous also maintains that, even if there were a breach, Contemporary is barred from asserting it, because it failed to adequately comply with the notice requirement contained in the Crunch agreement. We find this argument unpersuasive. The letter sent by Contemporary to Famous shortly after the sale to ABC gave Famous adequate notice that Contemporary considered the contract to have been materially breached as a result of the sale, which had led to the illegal seizure of our property from the marketplace, an obvious reference to evidence that the Crunch (and VIRGIN) record inventory had been removed from retail stores and shipped to ABC without notice to Contemporary, with probable harm to promotion and sales. Indeed, Famous' president, Martell, had advised O'Reilly of this fact before the latter's visit to ABC in early August 1974. While it is true that the letter directs Famous' attention to Paragraph 12, 14 among others, and that a breach of paragraph 12 was not the basis for Contemporary's ultimate recovery, under the circumstances, it would be hypertechnical to upset the verdict on the ground that the notice was insufficient. 15 We decline to construe the notice provision as if it were a common law pleading requirement under which every slip would be fatal. The purpose of the written notice requirement was to permit Famous within 30 days to cure any material breach. Contemporary's August 19, 1974, telegram, construed in the light of the earlier Martell-O'Reilly conversation with respect to the removal of the record inventory from retail stores was sufficient to place Famous under a duty to communicate immediately with ABC and to insure that the contract was being performed according to its terms. Had it done so, it would have found (as had O'Reilly a few days earlier) that ABC was not fulfilling Famous' obligations under the contract but was taking the position that it would not have anything to do with Contemporary. The problem for Famous, of course, was that, having sold its entire record division to ABC, it had stripped itself of its ability to cure the breach. 48 Famous' final contention is that Contemporary is estopped from suing for a breach of the Crunch agreement. According to Famous, because Contemporary has always claimed that the assignment was void ab initio, it is estopped to claim that Famous is vicariously liable for a breach by ABC, because if the assignment was void, ABC had no obligation which could have been breached. This argument is without merit because it is premised upon the mistaken notion that Famous is being held liable for a breach by ABC. Such is not the case. The basis for the recovery is not a breach by ABC, it is a breach by Famous after the sale to ABC. 16 49