contracts: assignment of rights

multiple assignments: for consideration

-1st AssignEE for consideration wins. -EXCEPT: Subsequent AssignEE takes priority over an earlier AssignEE for value ONLY if: 1. He does not know of the earlier assignment; AND 2. Is first to obtain payment, a judgment, a novation, or indicia of ownership.

right of assignEE

-AssignEE can sue the Obligor. -Obligor has same defenses against AssignEE as it would have against AssignOR. -Payment by Obligor to AssignOR is effective until Obligor knows of assignment.

common law limitations

-Even if a K does NOT in any way limit the right to assign, common law bars an assignment that substantially changes the duties of the obligor. 1. Assignment of right to Payment: OK. 2. Assignment of other Performance Rights: NOPE.

requirements for assignment

-Language of Present assignment. -Consideration is NOT required.

multiple assignments: gratuitous

-Last AssignEE wins because a later gift assignment revokes an earlier gift assignment. -Revocation: Directly or indirectly by bankruptcy, death, AssignOR taking performance directly from the Obligor, or the making of another assignment.

assignment

A transfer of rights under the K. 1. K between two parties; AND 2. One of the parties later transfers rights under that K to a third party.

multiple assignments: breach of warranty

AssignOR makes a warranty that the rights assigned are assignable and enforceable.

assignEE

NOT a party to the K, but able to enforce the K because of the assignment.

obligor

Other party to the K.

assignOR

Party to the K who later transfers rights under the K to another.

invalidation clause

Takes away BOTH the right to assign AND the power to assign so that there is a breach by the AssignOR and NO rights in the AssignEE.

prohibition clause

Takes away the right to assign, but NOT the power to assign, which means that the AssignOR is liable for breach, but an AssignEE who doesn't know of the prohibition can still enforce the assignment.