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could reasonably prevent the damages. Also, a court may grant the buyer other appropriate relief, besides damages, such as cancellation of the contract for the sale of goods or an injunction against enforcing the security interest. [U.C.C. § 2-210(3) (1999).] c. Validity of Contractual Prohibitions on Assignment As a general rule, Article 2 honors contractual prohibitions on assignment. There are, however, exceptions and qualifications to this rule. Relevance of § 9-406 Under Article 9 of the UCC, in a secured transaction subject to that article, a right to payment for goods is generally freely assignable, whether earned or not, despite any agreement or legal rule to the contrary. [U.C.C. § 2-210, cmt. 3 (1951).] Assignment of a Right to Damages for Breach of the Whole Contract A party may have (1) a right to damages for breach of the whole contract or (2) a right arising out of the assignor’s proper performance of her whole obligation. Article 2 permits assignment of these rights despite any contrary agreement. [U.C.C. § 2-210(2) (1951).] d. Construction of Contractual Prohibitions on Assignment Unless the circumstances indicate otherwise, any prohibition on assigning “the contract” does nothing more or less than to bar the assignor from delegating her duties of performance to the assignee. Thus, if the parties want the prohibition to cover both assignment and delegation, they should draft the agreement so that both assignment of rights and delegation of duties are clearly prohibited. [ See U.C.C. § 2-210(4) (1951); 1 Hawkland UCC Series § 2-210:4, Westlaw (database updated June 2021).] e. Construction of Assignment Language: Assignment as Delegation A party may draft an assignment with language purporting to assign “the contract,” “all of my rights under the contract,” or purporting to assign the party’s rights in similar general terms. This language, of course, operates as an assignment of the party’s contractual rights. In addition, and unless the contractual language or surrounding context indicates otherwise, such language also functions as a delegation of the assignor’s contractual duties to the assignee. In this case, by accepting the assignment, the assignee promises to perform those duties. Either the assignor or the assignor’s original counterparty may enforce this promise. [U.C.C. § 2-210(5) (1951).]
Assignment for Security
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