Sales and Leases | 80
2. Assignment Unless otherwise agreed (and except as provided in UCC § 9-406), all a seller’s or a buyer’s contractual rights can be assigned (that is, transferred to a third party) with or without the other party’s consent—unless assignment would materially:
change the other party’s duty, increase the other party’s burden or risk stemming from the contract, or impair the other party’s chance to obtain return performance.
[U.C.C. § 2-210(2) (1951); 2A Anderson U.C.C. §§ 2-210:26, 2-210:40 (3d. ed.), Westlaw (database updated June 2021).]
a. Consideration and Assignment A buyer or seller may generally assign its contractual rights with or without any consideration from the assignee. [2A Anderson U.C.C. § 2-210:27 (3d. ed.), Westlaw (database updated June 2021).] b. Material Increase in Burden on Counterparty As mentioned, a buyer’s or seller’s rights generally cannot be assigned if doing so would materially (1) change the other party’s duty, (2) increase the other party’s burden or risk stemming from the contract, or (3) impair the other party’s chance to obtain return performance. These three situations are often referenced collectively as materially increasing or changing the counterparty’s contractual burden. In Article 2, assignment is seldom held invalid on this basis. [ See 1 Hawkland UCC Series § 2-210:3, Westlaw (database updated June 2021).] Determining Whether Counterparty’s Burden Is Materially Increased or Changed Generally Ordinarily, if the assignee merely exercises its assigned contractual rights, there is no material increase in the counterparty’s burden—even if the assignee exercises those rights much more aggressively than the assignor or in a markedly different way from the assignor. On the other hand, as discussed below, assignment is often accompanied by a delegation of duties to the assignee. If the delegation would be improper because the contract is one for personal services, then the assignment is probably likewise improper as materially increasing or changing the counterparty’s burden. Similarly, if any duty of performance depends on one person’s discretion, or if the counterparty has placed special trust and confidence in the assignor, substitution of another’s discretion may materially change or increase the counterparty’s burden. [ See 1 Hawkland UCC
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