Implied Warranty

Generally, the presumption that the writing contains the whole contract does not prevail in the assignment of choses in action.  However, absent an express stipulation to the contrary, there are implied warranties and terms.[i]

Even in assignments made “without recourse,” there is an implied warranty that:

  • the right assigned is based on an adequate and sufficient consideration;
  • the chose assigned is a valid and genuine obligation of the parties;
  • any evidence of the right delivered as part of the assignment, or exhibited as an inducement to accept the assignment, is genuine and is what it purports to be.
  • the right as assigned actually exists and is subject to no limitations or defenses other than those stated or apparent at the time of the assignment.[ii]

Moreover, there is an implied warranty that the amount of money purporting to be due on the obligation is owing and unpaid at the time of the assignment, absent anything in the agreement to the contrary.[iii]  If the assignment of a contract contains a warranty that no part of the purchase price has been paid and that the amount due and owing has not been previously assigned, it does not imply a warranty that the claim has any particular value.[iv]  Unless a contrary intention is manifested, a person who assigns or purports to assign a right by assignment warrants to the assignee:

  • that he/she will do nothing to defeat or impair the value of the assignment and has no knowledge of any fact which would do so.
  • that the right actually exists and is subject to no limitations or defenses against the assignor other than those stated or apparent at the time of the assignment.
  • that any writing evidencing the right which is delivered to the assignee or exhibited to him/her to induce him/her to accept the assignment is genuine and is what it purports to be.

[i] State v. Phillips, 42 Wn.2d 137 (Wash. 1953)

[ii] Fritz Jahncke, Inc. v. Fidelity & Deposit Co. of Maryland, 166 La. 593, 117 So. 729 (1927); PENOWA COAL SALES CO. v. GIBBS & CO., 199 Md. 114 (Md. 1952); Logan County Bank v. Farmers’ Nat’l Bank, 55 Okla. 592 (Okla. 1916)

[iii] Brod v. Cincinnati Time Recorder Co., 82 Ohio App. 26 (Ohio Ct. App., Hamilton County 1947)

[iv] PENOWA COAL SALES CO. v. GIBBS & CO., 199 Md. 114 (Md. 1952)


Inside Implied Warranty