Contracts II


Restatement Second of Contracts § 317
Restatement Second of Contracts § 317

Assignment of a Right

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  1. An assignment of a right is a manifestation of the assignor's intention to transfer it by virtue of which the assignor's right to performance by the obligor is extinguished in whole or in part and the assignee acquires a right to such performance.
  2. A contractual right can be assigned unless
    1. the substitution of a right of the assignee for the right of the assignor would materially change the duty of the obligor, or materially increase the burden or risk imposed on him by his contract, or materially impair his chance of obtaining return performance, or materially reduce its value to him, or
    2. the assignment is forbidden by statute or is otherwise inoperative on grounds of public policy, or
    3. assignment is validly precluded by contract.
Copyright, The American Law Institute

Conditional rights are assignable. R2C § 320.

Future rights are assignable. R2C § 321.

  • A mere anti-assignment provision does not prevent the effectiveness of an assignment; it makes it a breach. Strong language limits the power to assign and will void it. Weak language only limits the right to assign and will not void it. R2C § 322.

Generally, assigning part of a right is treated as if that part is a separate right, and all people that a right has been assigned to are required to be joined if possible. R2C § 326.

An assignor can reduce an obligor's duty until the obligor is notified of the assignment, but not after. R2C § 338(1). Afterwards, the assignee can. R2C § 338(3).

If a right is conditional upon the assignor's return performance, the assignor and obligor can modify the contract in good faith accordance with reasonable commercial standards. R2C § 338(2).