Question

Describe assignment of contract rights and what contract rights are assignable?

Answer 1

Assignment is a process by which obligee (one who has the right to receive the contractual benefit) transfers the right to receive the benefit to a third person assignee. In this case, the assignee becomes obligee and the original obligee becomes the assignor.

Assignee steps into the shoes of the assignor and all the rights of original contracts are assigned except:-

1. In the case of the holder in due course, it is not allowed to assign the contract.

2. In case obligor (person who has to perform the duty) has mentioned that the contract cannot be assigned, then the assignment is not possible.

3. Personal rights cannot be assigned.

4. If assignments lead to a material change in duties of the obligor, then also contracts cannot be assigned.

5. If the assignment is forbidden by statute, the assignment is not possible.

6. Future contracts cannot be assigned.

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