Sales and Leases | 81
Series § 2-210:3, Westlaw (database updated June 2021); Restatement (Second) of Contracts § 317, cmt. d.]
Example : An oil company entered a contract with a dealer, under which the dealer would purchase fuel and lease gas-station property from the company. The contract gave the oil company the right to (1) adjust the price of fuel at any time and (2) adjust the rent on the gas-station property yearly. The oil company did raise the price of fuel and rent in the ensuing years, but always modestly. The oil company eventually assigned its contractual rights to a jobber, who then made clear his intent to raise fuel prices and rent more aggressively than had the oil company. Here, there has been no material increase or change in the dealer’s contractual burden. Even if the jobber were to raise fuel prices and rent more aggressively than the oil company had done, he would merely be exercising the same contractual rights that the oil company had. [ Adapted from Beachler v. Amoco Oil Co. , 112 F.3d 902 (7th Cir. 1997).] Assigning Right to Receive Payment A mere assignment of a right to receive payment will almost never be held to materially change or increase the counterparty’s contractual burden. Here, the counterparty is merely required to pay the same amount of money called for under the contract to a different entity. [ See 2A Anderson U.C.C. § 2-210:50 (3d. ed.), Westlaw (database updated June 2021).] Sale on Credit A buyer on credit may have a difficult time validly assigning its rights to another, at least if (as is the usual case) the assignment is accompanied by a delegation of the buyer’s duties. Here, the seller normally relies on the particular buyer’s creditworthiness in deciding to sell on credit. Thus, an assignment/delegation to a third-party subpurchaser may materially change or increase the seller’s burden or risk. [ See 2A Anderson U.C.C. § 2-210:67 (3d. ed.), Westlaw (database updated Dec. 2020).] Security Interest in the Seller’s Contractual Interest As a general rule, the creation, attachment, perfection, or enforcement of a security interest in the seller’s contractual interest does not materially change or increase the buyer’s burden or risk—except to the extent that there is a resulting material delegation of the seller’s performance. Even if there is a material delegation, the creation, attachment, perfection, or enforcement of the security interest is effective. However, the seller is liable for any ensuing damages to the buyer, except insofar as the buyer
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