Tech Solutions Inc. has a contract with Retailers Co. to provide software support services for three years. Tech Solutions Inc. plans to assign its right to receive future payments under the contract to a third-party financer, FastFunds LLC, without Retailers Co.'s consent. Additionally, Tech Solutions Inc. intends to delegate its obligation to provide support services to its newly formed subsidiary, SupportSubs LLC, without obtaining Retailers Co.'s approval. Under contract law, which of the following statements is correct?
The assignment is permissible without consent, but the delegation requires Retailers Co.'s approval.
Both the assignment and delegation are permissible without Retailers Co.'s consent.
The assignment requires Retailers Co.'s consent, but the delegation is permissible without approval.
Both the assignment and delegation require Retailers Co.'s consent.
Assigning contractual rights generally does not require the other party's consent unless the contract prohibits assignment. Therefore, Tech Solutions Inc. can assign its right to receive payments to FastFunds LLC without Retailers Co.'s consent. However, delegating contractual duties typically requires the other party's consent, especially if the delegatee's performance could affect the contract's outcome. As such, delegating the obligation to SupportSubs LLC without Retailers Co.'s approval is not permissible.
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