Question

Please answer the following question in 2-4 sentences. Business Law

Bob owes Elmer $500. Elmer signs a document stating, "I transfer my right to collect $500 from bob to Lucille." Lucille attempts to collect, and Bob claims that only Elmer can collect because Lucille wasn't an original party to the transaction that created the debt. Is bob correct?

Answer 1

This is a case of assignment of contract. Under general rules contracts and their benefits are freely assignable, i.e. Elmer is free to give the benefit of collecting $500 to Lucille. The exception to this only takes place in case of specific contracts where there is a personal performance required, or there is a specific provision in the contract that says that it is non-assignable. In case such situations are not present, the contract can be assigned to Lucille and Bob is not correct.