Written by attorneys · grounded in primary & secondary sources — see below
An obligee who transfers a contractual right to performance by manifesting an intention to do so. The transfer extinguishes the assignor's right in whole or in part and vests a corresponding right in the assignee.
Randy entered a forward contract with Point Organic for the sale of his harvest. Randy then executed a written assignment transferring his right to payment under that contract to Elm Grain. Point Organic received notice of the assignment. When Randy later attempted to settle directly with Point Organic for a reduced price, the settlement could not affect the right already transferred.
South Development held a subcontract right to progress payments from Delta Development. South assigned that right to Pine Structures in exchange for materials credit. Delta compiled backcharges for defective work before receiving any signed notice of the assignment. Delta may reduce amounts owed to Pine by the amount of those pre-notice claims.
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Ridge Builders assigned its right to milestone payments from the City of Fairmont to Apex Capital. The city compiled a list of deficiencies arising from Ridge's performance before receiving any signed notification of the assignment. The city may assert those claims against Apex to reduce the amount owed on the assigned payments.
A husband and wife granted an option to repurchase family property. The husband later became bankrupt and his trustee sought to treat the option as assigned for the benefit of creditors. The court examined whether the option reflected a personal family intent that prevented effective transfer by the original holders.
The assignor must manifest an intention to transfer the right. That manifestation extinguishes the assignor's right to performance and vests the right in the assignee.
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Yes. The assignee steps into the assignor's position. The account debtor may assert all terms of the original agreement and any defense or claim in recoupment arising from the transaction that gave rise to the contract.
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The account debtor may assert claims against the assignor that accrue before receiving a notification of the assignment signed by the assignor or the assignee. After proper signed notice, later claims generally cannot be asserted against the assignee.
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No. Consent is not required unless the contract or a statute forbids assignment. The assignment is effective upon the assignor's manifestation of intent to transfer the right.
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…J. S. 2A:25-1, which provides that an obligor sued by an assignee “shall be allowed all defenses he had against the assignor or his representatives before notice of such assignment was given to him” (It is conceded here that plaintiff gave no notice of the assignment to defendant); and (3) the policy of our state…