Necessity for a Writing; Oral Assignments

The validity of an assignment does not depend on whether it is written.[i] However, if a statute or a contract provision provides that an assignment can be valid only if written, the assignment should be in writing.

If the subject matter of the assignment agreement regards a transaction that falls under the statute of frauds, the assignment need not be in writing.  Therefore, an assignment agreement can be valid if it is oral, or partly in writing and partly oral.[ii]

An assignment that lacks formality is revocable.  When an assignment is not formal, it is subject to the defenses or claims of the obligor which can accrue subsequently.  However, when an assignment is not in writing, it can be defeated by creditors of the assignor or by subsequent assignees of the same right.[iii]

If the assignment is not written, courts have to look at the circumstances surrounding the assignment agreement and the acts of the parties to ascertain their intentions.  Written assignments can act as evidence of the intention of parties regarding transfer of some identifiable property, claim, or right.

Pursuant to Restat 2d of Contracts, § 324, an assignor’s intention to assign a right can be made either orally or in writing, unless a writing is required by a statute or by contract.

In cases before a court of law, an oral assignment is ineffective to prove the right of an assignee.[iv]

[i] Kelly v. Geriatric and Medical Services, Inc., 287 N.J. Super. 567 (App.Div. 1996)

[ii] Allison v. Pearce, 59 S.W. 192 (Tenn. Ch. 1900)

[iii] Watts v. Copeland, 170 S.C. 449 (S.C. 1933)

[iv] Great American Ins. Co. v. Williams, 123 Okla. 206 (Okla. 1926)

Inside Necessity for a Writing; Oral Assignments