Assignment of Rights

Question 1

What is an assignment of rights?

Answer 1

A transfer of right to receive a performance under a contract

Question 2

How may an assignment be made effective?

Answer 2

To be effective, owner of the right must manifest an intention to make a present transfer of an existing right under a contract to another party

Question 3

Are rights under a contract generally assignable?

Answer 3

Yes

Question 4

When are rights under a contract not assignable?

Answer 4

Rights under a contract are not freely assignable when:
1. assignment materially alters duties of the other party
2. obligor has a personal interest in rendering performance to the obligee and not a third-party
3. assignment would violate applicable law or public policy
4. assignment is porhibited by the contract

Question 5

What are implications of a contract that’s assigned for value?

Answer 5

If a contract is assigned for value
1. it is valid against the obligor
2. it cannot be revoked by assignor

Question 6

What are implications of a gratuitous assignment of a contract?

Answer 6

1. Contract is valid against obligor who cannot claim lack of consideration as a defense to performance
2. under the law of gifts, executor gift is revocable but an executed gift is not meaning that assignor can reclaim contract before it has been performed, but cannot take back the benefit after it has been conferred

Question 7

What are assignee’s rights after assignment

Answer 7

Assignee gets whatever rights to the contract the assignor had and takes the contract subject to whatever defenses the obligor could have raised against the assignor

Question 8

Does assignee get right to payment upon assignment?

Answer 8

Yes, though obligor’s payment to assignor is a defense unless the obligor has been notified that payments are now owed to the assignee