Hidden Delegations: The Assignment of Contractual Rights and Consumer Debt

Abstract

Investigating consumer debt assignment exposes a submerged but significant philosophical tension in contract law's treatment of rights transfers. On the one hand, contract law adopts a highly permissive stance toward rights‐transfers (assignments) undertaken on the unilateral initiative of the rights‐holder. On the other hand, it reasonably takes a restrictive posture toward duty‐transfers (delegations), requiring greater input from the duty's beneficiary about the identity of the duty‐holder. Where, however, an assignment integrally, albeit covertly, involves a duty‐transfer, then the more restrictive rules of delegation should apply. Debt assignments represent a significant, but not isolated, case of such hidden delegation because, in addition to rights to repayment, creditors have an array of moral and legal duties toward debtors. Recognition of this doctrinal tension should alter our legal treatment of significant cases of assignment and sensitise us, philosophically, to the relational components of economic behaviors often treated as purely transactional.