makes the assignment more marketable from the assignee’s point of view, it is a situation fraught with peril to an obligor, who may sign a contract without understanding the full import of the waiver.
Under the waiver rule, for example, a farmer who buys a tractor on credit and discovers later that it does not work would still be required to pay a credit company that purchased the contract; his defense that the merchandise was shoddy would be unavailing (he would, as used to be said, be “having to pay on a dead horse”).
Notice to the obligor is not required, but an obligor who renders performance to the assignor without notice of the assignment (that performance of the contract is to be rendered now to the assignee) is discharged.
Obviously, the assignor cannot then keep the consideration he has received; he owes it to the assignee.
For that reason, there are various rules that limit both the holder in due course and the waiver rule.
Assignment In Law Canterbury Tales Essay Questions
Certain defenses, the so-called real defenses (infancy, duress, and fraud in the execution, among others), may always be asserted.
An obligor who could avoid the assignor’s attempt to enforce the rights could avoid a similar attempt by the assignee.
Likewise, under UCC Section 9-318(1), the assignee of an account is subject to all terms of the contract between the debtor and the creditor-assignor.
Nor will a minor change in the duties the obligor must perform defeat the assignment.
Several residents in the town of Centerville sign up on an annual basis with the Centerville to receive their morning paper.