Question: The buyer will not have the funds for the down
payment by the scheduled closing date. An investor has offered
to pay the buyer $10,000 for an assignment of the contract. The
seller has refused to permit the assignment because the seller
has a backup offer for a higher price. No language in the contract
prohibits assignment. Does the buyer need the consent of the seller
in order to assign the contract to the investor?
Answer: No. The general rule is that any contract can
be assigned unless the contract prohibits assignments. See Restatement
(Second) of Contracts § 317 (1981). Therefore, the buyer is entitled
to assign the contract to the investor before the scheduled closing
date. Note: None of the AAR contracts prohibit assignment.
If a seller wants to prohibit assignment of the contract by the
buyer, specific language prohibiting assignment must be added
to the contract.
