If a court adjudicates the matter, the assignee winning at court may be vested with the authority to establish priority in performance of assigned rights.
Novations – If the assignee executes a novation, the novation establishes priority.
Multiple Assignments – A party can partially assign a contract or assign the same contract to multiple parties.
Different jurisdictions follow different rules regarding the priority of the assignees.
It is important to review the specific rules applicable to the specific jurisdiction when determining one’s rights under an assigned contract.
Revoking an Assignment – A gratuitous (gift) assignment cannot be revoked if the assignment is made pursuant to a written document signed by the assignor.Some jurisdictions allow that the first assignee of a contract who gives notice to the obligor has priority over other assignees.Other jurisdictions follow the rule that the first assignee to receive assignment of a contract has priority to performance by the obligor.: Cleo is a party to a contract with ABC Corp to provide consulting services.Cleo verbally assigns her rights to receive payment to Austin.Cleo later verbally assigns her rights to receive payment to Steve.Austin complains to Cleo about her subsequent assignment.Still other jurisdictions follow the rule that the first assignee has priority, unless: Purchaser in Good Faith for Value – If an assignee pays value for the assignment in good faith without notice of a prior assignment (and the prior assignee did not receive the assignment in good faith and for value), she has priority over prior assignments.Court Action – If an assignee receives a judgment against the obligor.Delegation of duties pursuant to contract is more limited.The following contracts are not capable of delegation: Material Changes of Responsibility – A contract that materially alters the obligor’s duties under the agreement is not transferable.