I was just reading an article on assignment of a contract versus novation of a contract. It said that with assignment, the assignor is still liable for contract performance but with novation, the assignor is no longer liable for contract performance.
In my assignment of purchase agreement contract (which is an agreement between the assignor, me, and the assignee, my end-buyer, and does not include the seller), it says that I as the assignor am relieved of all liability for contract performance, and that that liability is now transferred to the assignee. Does this mean then that in case of non-performance of the purchase contract by the assignee, 1. that the seller can sue me for non-performance and 2. if yes, would this clause in my assignment contract be a defense against such a lawsuit or would a court agree that I am still liable, along with the assignee?
Has anyone ever had a situation like this and how did it turn out?
Hi,
Kelle711 when your doing assignment of contract you have created an assignment with contingencies within the purchase contract, you still need to monitor and help guide and project manage your end buyer to get to the point where all lender requirements have been fulfilled and the loan is approved by underwriting and the contingencies have been removed, and the deal is moving to close!
So you have zero liability with the seller provided your (c) buyer is pre-approved prior to taking your assingment and you don’t allow contingencies to expire or become removed without knowing the deal is closing!
I have never had a seller (Party A) sue me or claim damages or non preformance provided I watch and control / handle my end buyer!
Anyone can sue you! Any Day or week! For any reason! Your contract does not obsolve you of the contract between A and B however you can legally end the contract by use of any contingency! No liability / No Lawsuits!
GR