An assignment of a contract is a contract for the sale of a property benefit of a contract. The assignment must contain all the elements of a simple contract. The assignor of a contract can transfer only such property rights as he possesses. The other party to the contract retains any defense against the assignee, which he had against the assignor. A agrees to build a house for B, for five thousand dollars ($5,000.00), according to certain plans. A constructs the house with variations, subjecting him to a reduction in price of five hundred dollars ($500.00). A assigns his rights in the contract to C and C can compel A to pay him only four thousand five hundred dollars ($4,500.00). The defense of B against A is good against A's assignee, C.
Upon assigning a contract, the assignor or assignee must notify the other party to the contract, of the assignment, else payment to the assignor will discharge the other party. For example, A owes B one hundred dollars ($100.00). B assigns the claim to C. C does not notify A of the assignment and A pays B. B is insolvent and C cannot recover from him. C cannot recover from A, since A has received no notice of the assignment.
The following is a recognized legal form of assignment.
For valuable consideration, I
hereby assign all my right,
title and interest in the
annexed (account, contract, or
whatever the instrument may be)
to________
________________
Signature of assignor.
Date________________
30. Joint and Several Liability in Contracts. If A makes a contract with B, only two parties are bound by the contract and are liable for its breach. If A and B contract with C and D, four parties are bound and are liable. A and B may be liable as one party to C and D, or they may be liable as two parties to C and D. If the contract shows by its terms that A and B contract as a unit, and not as separate individuals, their contract is said to be joint. If the terms of the contract show that A and B intend to contract as individuals, as well as a unit, their contract is said to be joint and several. If the terms of the contract show that A and B intend to contract as individuals only, and not as a unit, their liability is said to be several.
The importance of this distinction is that in case of a joint obligation, all the joint obligors must be joined when sued, else the case may be dismissed if objection is made; while in case of a joint and several obligation, or of a several obligation, individual obligors may be sued separately.
A promissory note reads, "We promise to pay" and is signed by A and B. This is a joint obligation, and in a suit thereon A and B must be joined, or the one sued may have the case dismissed, by reason thereof. If, however, judgment is rendered against both, and they hold no joint property, the creditor may enforce his judgment against either. This is known in law as, liability in solido. A promissory note reads, "We or either of us jointly and severally promise to pay," and is signed by A and B. A and B are severally, as well as jointly liable, and may be sued separately.