QUESTION:
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If a contract is silent, does not include any statement about its ability to be assigned yes or no? Is it assumed to be assignable? Thank you in advance for your consideration.
Bart A. Didden
President
U.S.A. Central Station Alarm Corp
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ANSWER:
This is another one of those issues that comes up all the time and causes lots of confusion. Whether you are considering terms for your own contracts or buying subscriber contracts one of the first questions is, "is there an clause permitting assignment?"
I have answered the question so many times that I have begun to confuse myself. The answer has been, contracts are assignable unless there is a specific provision prohibiting assignment. Your contracts do not have to have an assignment clause to permit assignment. The general rule has exceptions, but they most likely don't apply to security contracts.
Personal services contracts, such as an entertainer's contract to perform, can not be assigned. But unless you have some kind of unique service no one else has, you won't fall under that exception.
Keep in mind that one assigning a contract, called an "assignor" remains liable under the contract for the performance of the "assignee", unless of course there is a provision in the contract that relieves the assignor of further performance upon the effective assignment.
My contracts have two provisions in the contracts involving assignment. First, the subscriber can not freely assign the contract to another without alarm company approval. Secondly, the alarm company can assign, and upon such assignment is relieved of further obligation under the contract. Subscribers occasionally raise a question with the assignment right, and they are correct to do so. However, you should resolve the objection by adding that your assignment will be limited to a reputable and licensed security company.
I didn't want to respond entirely from the hip [and not just because it's Bart asking the question] so I had one of my attorneys give me a formal response. While her research and memorandum of law is limited to New York law I am comfortable that the law in all jurisdictions would be the same because this is based on what we call common law. You may want to check with local counsel however to make sure that your state has not enacted legislation that changes the common law [not likely, but possible].
Here is Rachael Weinrib, Esq's memo.
To: Ken Kirschenbaum,Esq
From: Rachel Weinreb,Esq
Issue:
If an alarm contract is silent about its ability to be assigned is it assumed assignable?
Applicable law:
Under New York law, contracts which do not involve exceptional personal skills and which the assignee can perform without adversely affecting the rights and interests of the adverse party are freely assignable absent a contractual, statutory or public policy prohibition. (See e.g., General Obligations Law, Section 13-101; see also 6 NY Jur. 2d Assignments, Section 5 at 238; In re Stralem, 303 AD2d 120, 122, 758 N.Y.S.2d 345 [2nd Dept 2003]) "That the contract is silent about its assignability does not mean it is not assignable." (Eisner Computer Solutions, LLC v. Gluckstern, 293 AD2d 289, 741 N.Y.S.2d 511 [1st
Dept 2002
]) A clear and unambiguous provision is essential to effectively prevent assignment. (Special Products Mfg., Inc. v. Douglass, 159 AD2d 847, 553 N.Y.S.2d 506 [3rd Dept 1990]; 6 NY Jur.2d, Assignments, Section 10 at 244-245)
]) A clear and unambiguous provision is essential to effectively prevent assignment. ( 159 AD2d 847, 553 N.Y.S.2d 506 [3rd Dept 1990]; 6 NY Jur.2d, Assignments, Section 10 at 244-245) ]) A clear and unambiguous provision is essential to effectively prevent assignment. ( 159 AD2d 847, 553 N.Y.S.2d 506 [3rd Dept 1990]; 6 NY Jur.2d, Assignments, Section 10 at 244-245) ]) A clear and unambiguous provision is essential to effectively prevent assignment. ( 159 AD2d 847, 553 N.Y.S.2d 506 [3rd Dept 1990]; 6 NY Jur.2d, Assignments, Section 10 at 244-245) ]) A clear and unambiguous provision is essential to effectively prevent assignment. ( 159 AD2d 847, 553 N.Y.S.2d 506 [3rd Dept 1990]; 6 NY Jur.2d, Assignments, Section 10 at 244-245)
In Special Products Mfg., Inc. v. Douglass, the court found that because the agreement did not specifically forbid an assignment the assignment was not forbidden.
Conclusion:
Here, even though the contract is silent as to its assignability the above law establishes that the contract is freely assignable.
Rachel L. Weinrib, Esq.
KIRSCHENBAUM & KIRSCHENBAUM, PC