Can I Assign my Contract in California?
The simple answer is, as it is in response to many questions in the law, it depends. It first depends upon how the term “assign” is used. In McCown v. Spencer (1970) 8 Cal.App.3d 216, 225, 87 Cal.Rptr. 213, the California Courts of Appeal for the Second District, Division Four, defined “‘assign’ ordinarily means to transfer title or ownership of property [citation omitted],but an assignment, to be effective, must include manifestation to another person by the owner of his intention to transfer the right, without further action, to such other person or to a third person. [Citation omitted.] It is the substance and not the form of a transaction which determines whether an assignment was intended. [Citations omitted.] If from the entire transaction and the conduct of the parties it clearly appears that the intent of the parties was to pass title to the chose in action*check citation, sentence doesn’t really make sense “chose in action”, then an assignment will be held to have taken place. [Citations omitted.]” [Emphasis added.]
As a general rule, then, contracts interpreted under California law may be assigned; however, to be effective, there must be evidence that the assignor (the party assigning the contract) intended to transfer the assignor’s title or ownership of the rights and obligations under the contract to the assignee (the party receiving the assignment from the assignor). While that “evidence” may take the form of a writing, a writing is not necessary, but can be “oral or implied by the conduct of the parties to the assignment.” California Civil Jury Instructions (CACI), Instruction 326. Assigment Contested.Because enforcement of a right under a contract must be sought in court, “[i]n an action by an assignee to enforce an assigned right, the evidence must not only be sufficient to establish the fact of assignment when that fact is in issue [citation omitted] but the measure of sufficiency requires that the evidence of assignment be clear and positive to protect an obligor from any further claim by the primary obligee [citation omitted].” Cockerell v. Title Ins. & Trust Co. (1954) 42 Cal.2d 284, 292, 267 P.2d 16, see also CACI Instruction 326.It should come as no surprise that any assignment should be in writing. Memorializing an assignment in a writing makes clear to any court which may be called upon in an action on the original contract what the parties intent was at the time of the assignment. It further will define precisely what was assigned.
To ensure your agreement will be enforceable in California, you will need the services of a rising star like Michael Leonard, Esq., named “Best of the Bar” by the San Diego Business Journal in 2016. You can arrange for a consultation with Mr. Leonard to discuss creating agreements for your business or other business-related matters by visiting San Diego Corporate Law or by telephone at (858) 483-9200. He has the experience, knowledge, and unique qualifications to ensure all of your agreements are enforceable in the California Courts.