Contract Assignment & Contract Obligation

3 Replies

Example contract verbiage:

"This contract is assignable by Buyer without the written consent of Seller. Assignment does not relieve the parties from their obligations under this contract."

What needs to change here? If the only default remedy for the seller is to keep the buyer's (wholesaler's) earnest money, I don't see a problem with this verbiage.

What do you think?

Contract Assignment and consent

Is not even necessary in Mo, saying you don't need consent is redundant to the law and points out that you're probably going to assign it which may contradict what you let a seller believe, that I don't know, but most seem to not be upfront. Even being upfront, it's unnecessary to mention it.

The second sentence is the same issue, it's already the law, unnecessary, redundant and shows that the contract was not likely drafted by legal counsel.

Every time investors want to play attorney, trying to save a few bucks, they end up saying things that are not necessary, things that can be questioned, things that may not be clearly stated, things that skew the fairness applicable to a transaction. Writing contracts goes deeper than just writing down understandings, it shows intent, practice, knowledge of legal aspects that are often best left alone so they may be debated or simply cured by custom or law.

In Mo. or in fact any state unless intent to assign was required to be disclosed I would make it a contract issue at all, and in all states if I were the initial buyer, I will have contract responsibilities to the seller, regardless of any assignment unless that seller agrees to release me of liabilities and agrees to contract with the new buyer/assignee.

Don't dream up your own stuff when usual and customary already addresses what you want to happen. :)    

Originally posted by @Bill Gulley :

Contract Assignment and consent

Is not even necessary in Mo, saying you don't need consent is redundant to the law and points out that you're probably going to assign it which may contradict what you let a seller believe, that I don't know, but most seem to not be upfront. Even being upfront, it's unnecessary to mention it.

The second sentence is the same issue, it's already the law, unnecessary, redundant and shows that the contract was not likely drafted by legal counsel.

Every time investors want to play attorney, trying to save a few bucks, they end up saying things that are not necessary, things that can be questioned, things that may not be clearly stated, things that skew the fairness applicable to a transaction. Writing contracts goes deeper than just writing down understandings, it shows intent, practice, knowledge of legal aspects that are often best left alone so they may be debated or simply cured by custom or law.

In Mo. or in fact any state unless intent to assign was required to be disclosed I would make it a contract issue at all, and in all states if I were the initial buyer, I will have contract responsibilities to the seller, regardless of any assignment unless that seller agrees to release me of liabilities and agrees to contract with the new buyer/assignee.

Don't dream up your own stuff when usual and customary already addresses what you want to happen. :)    

Thanks for the input, Bill. 95% of this verbiage is included in the St. Louis Association of Realtors Special Sale Contract form 2043. The seller is aware of possible assignment, which I thought was standard to disclose. I don't know of any wholesalers, at least that I've spoken with, that do not disclose that they may be assigning. 

The seller's broker (he's forfeiting commissions because he's the seller's son-in-law) sent me the contract he uses when buying flips, we both hacked out the contract. The particular line quoted signaled a tiny red flag when I read the word "obligation". Then I realized that it wasn't a big deal BUT I wasn't sure. 

Guy as long as you are not entering a deal where the contract is "non-assignable" such as with most bank REO's, etc., you should be able to make your contract legally assignable simply by adding the words "and/or assigns" behind the "Buyer's" name on the contract. 

Example: "(Seller's name)__ Seller, acknowledges and agrees to sell the real property listed below to (your name/buyer)____ or assigns, hereinafter called Buyer-"

Wording your contract similar to the above will make your contract fully assignable but subtle enough to keep your your seller from hitting you with a million questions. As you may already know, always seek the help of a legal professional to make sure that this information is applicable where you live. 

Hope this helps. Much success!

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