An assignment operates as a valid transfer of the title of the property and the assignee becomes the real party in interest who may maintain an action thereon in his/her own name.[i] The determinant factor regarding the assignability of a contract is the contractual intent, which is often manifest in the language used by the parties.[ii]
Sometimes, parties may specifically incorporate terms such as “heirs”, “successors”, “executors”, and “assigns” to indicate that the contract may be assignable. The use of the word “assigns” constitutes an express consent to the assignment or subletting of the contract.[iii] For instance, under Colorado law, parties may agree to make an otherwise unassignable contract assignable by insertion of a “successors and assigns” provision.[iv]
However, the parties cannot make any contract assignable by including the word “assigns.” Courts have held that a contract containing the word “assigns” is not necessarily assignable where a contract of a personal nature is contemplated.[v]
On the contrary, the avoidance or absence of the word “assign” in a contract does not support a finding of an express or implied intention of the parties to prohibit the assignment of the agreement.
The assignment of an executory contract by one party does not relieve the assignor of his/her personal liability to the other contracting party, nor does it create personal liability on the part of the assignee, without a provision to that effect. However, the assignee may not enforce the contract against the other contracting party until the obligations which the contract imposes have been performed by some one. An assignee accepts the assignment with all the burdens that encumbered the assignor. [vi]
[i] Overton v. Tarkington, 249 N.C. 340 (N.C. 1959)
[ii] Nolan v. Williamson Music, Inc., 300 F. Supp. 1311 (S.D.N.Y. 1969)
[iii] Vaughan v. Wilson, 203 Ore. 243, 256-257 (Or. 1955)
[iv] K N Gas Supply Servs. v. American Prod. Pship. V, Ltd., 994 F. Supp. 1283, 1286 (D. Colo. 1998).
[v] Vaughan, 203 Ore. 243
[vi] Meyers v. Postal Finance Co., 287 N.W.2d 614, 617 (Minn. 1979)