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Text 1 Can Rights under a Contract Be Transferred?

Persons frequently have contractual rights, which they wish to transfer to others. Such a transfer of contractual rights is called an assignment. The party who makes the assignment is the assignor. The party to whom the assignment is made is the assignee.

Generally unless prohibited by statute or by the contract creating the right, a party may assign any rights to another, provided performance will not be materially changed. Performance is the fulfillment or accomplishment of the agreement. A right to collect a debt is assignable because performance remains the same after assignment.

Rights may not be assigned if doing so makes performance of the contract substantially more difficult. Rights which may not be transferred, include:

1 claims to damages for personal injuries;

2 rights to personal services especially of a skilled nature,

and when personal trust and confidence are involved.

Assignment of contractual rights is usually made voluntarily by the assignor. Assignment may also occur automatically by operation of law, as when one of the contracting parties dies. Then the decedent’s (deceased person’s) rights are assigned to the executoror administrator of the estate. Assignment also occurs by operation of law when a trustee in bankruptcy receives title to a debtor’s assets, including contractual claims against third persons.

Ordinarily, no particular form is required for an assignment. It may be oral or written. However, statutes sometimes require certain assignments to be in writing.


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