A musician contracts to perform at a concert for $5,000. Before the concert, the musician assigns their right to receive the $5,000 payment to a creditor to satisfy a debt. The creditor then notifies the concert organizer of the assignment. Which of the following statements is true regarding the assignment?
- AThe assignment is valid, and the concert organizer must pay the creditor.
- BThe assignment is valid, but the musician is still entitled to receive the payment.
- CThe assignment is invalid because personal service contracts cannot be assigned.
- DThe assignment requires the concert organizer's consent to be effective.
Show answer & explanationAnswer & explanation
Correct answer: A. The assignment is valid, and the concert organizer must pay the creditor.
Rights to receive money (a benefit) under a contract are generally assignable, even without the obligor's consent, unless the contract specifically prohibits it or the assignment materially alters the obligor's duty. The musician's *performance* cannot be delegated without consent, but the right to receive payment can be assigned.
Why the other options are wrong
- B. Once a valid assignment of rights occurs and the obligor is notified, the assignee acquires the right to the payment, not the assignor.
- C. While the *duty* of personal performance cannot be delegated without consent, the *right* to receive payment for that performance can generally be assigned.
- D. Consent of the obligor (concert organizer) is generally not required for the assignment of a right to receive money, unless the contract expressly prohibits such assignment.
Assignment of Rights
The transfer of a party's contractual rights to a third party (the assignee). Generally, rights are assignable unless prohibited by contract, statute, or if the assignment materially changes the obligor's duty or risk (e.g., personal service duties cannot be assigned).
- Transfer of contractual benefits/rights.
- Assignor transfers rights to Assignee.
- Obligor must be notified to pay assignee.
- Generally permitted unless prohibited by contract, law, or material alteration.
Memory trick: Contracts can reach beyond two, bringing in beneficiaries, assignees, or delegates.