Question

• Donna owes $10,000 to Barclays Bank. Harvey Hedge Fund is buying Donna’s debt to Barclays Bank for $8,000. Is Barclays Bank assigning its rights or delegating its duties?
• What is each party’s role (i.e., who is the obligor, obligee, assignor, assignee, delegator, or delegatee) - your answer depends on how you answered Question 4.

Answer 1

Barclay's bank is assigning its right to collect the proceeds of the debt owed by Donna.

(The risk of the debt is transferred to Harvey Hedge Fund and does not belong to Barclay's any more. Hence this is assignment and not delegation. Delegation of duties implies that the risk stays with Barclay's Bank and the Harvey Hedge Fund only performs the task of collection. This is not the case here as the entire debt is sold off.)

The parties are as follows

Obligor: Donna (She is obliged to pay the debt)

Obligee: Barclay's Bank (Has the right to receive the payment)

Assignor: Barclay's Bank (It is the party which assigned the right to the debt)

Assignee: Harvey Hedge Fund (Party which receives the right of collection)

There are no delegator and delegatee since there is no delegation.