If a contract has a valid claim for damages, can the right to recieve the money be assigned even if there...?

Question

If a contract has a valid claim for damages, can the right to recieve the money be assigned even if there is language in the contract prohibiting assignments?

Answer 1

Common law in most states generally favors assignment of rights, unless the rights and performance being received is too personal. Generally, receipt of money is not too personal.

Anti-assignment clauses may be construed as either terms or conditions depending upon how they are phrased. Generally, a condition (which would relieve or trigger duty to perform) must be specific. Thus, unless the clause either expressly referenced it being a condition ("attempted assignment constitutes a material breach, and acts a condition subsequent") or contained the direct effect of a condition (ex: "attempted assignment of this contract relieves the non-assigning party of any further duty to perform under the contract") the clause would not be considered a condition.

If a clause is not a condition, then violation of it will only be considered a breach of the contract, but would not invalidate the assignment. The exception is where the language is absolute (ex: "any purported assignment is void and without effect").

Thus, the answer for any given contract would be based on the specific phrasing of the anti-assignment clause, and the laws of the state which apply during any challenges to the contract. As with all legal issues, you should consult with an attorney licensed in your state.