California Real Estate SalespersonContractsMedium
A buyer enters into a valid purchase agreement to buy a duplex. Before closing, the buyer wants to transfer their rights and obligations under the contract to a business partner. Assuming the contract is silent on the issue, which statement is most accurate under California contract law?
- AAssignment automatically releases the original buyer from all liability under the contract
- BThe buyer may generally assign the contract unless it is personal in nature or prohibited by its terms
- CThe buyer cannot transfer any contractual rights without the seller's written consent
- DReal estate purchase contracts can never be assigned under California law
Show answer & explanationAnswer & explanation
Correct answer: B. The buyer may generally assign the contract unless it is personal in nature or prohibited by its terms
Contract rights are generally assignable unless the contract prohibits assignment or the contract involves personal services/trust. Assignment does not automatically release the assignor (that would require a novation).
Why the other options are wrong
- A. Only a novation, not a simple assignment, releases the original party from liability.
- C. Written consent is not always required unless the contract specifically requires it.
- D. Real estate contracts are commonly assignable, e.g., in "and/or assigns" clauses.
Assignment of Contract
The transfer of contractual rights and duties to a third party; generally allowed unless prohibited or personal in nature, but does not release the original party without novation.
- Assignment differs from novation
- Original party remains liable unless novation occurs
- Contracts can restrict assignment via express clause
Memory trick: Assign passes duty, novation erases the original party