By Guest Contributor Gregory A. May, Esq. – www.kieselandmay.com
Is your contract assignable? That is, can you give or “assign” your place in a contract to a third party?
This issue comes up with regard to business sale transactions under two main scenarios. First, there is a question of whether or not the Purchase Agreement itself is assignable, and second, are the Seller’s third-party contracts assignable?
The answer is not always so clear; but in Florida, contract rights can be assigned unless forbidden by the terms of the contract itself, or unless the assignment would violate some rule of public policy or some statute, or the contract rights involve obligations of a personal nature.
Most contracts should have language that will state whether or not the contract is assignable. If they are assignable, you should read on to determine if consent is required.
Buyers often want a contract to be assignable so that they may transfer the property to a new LLC or Corporation that they have yet to establish. Other times, the buyer is acting as an agent for the “real” buyer, who is unwilling to disclose their identity.
With regard to third party contracts, including vendor and supply contracts, the buyer should be careful to check to see if the contract is assignable or if it can be terminated. The last thing a buyer needs is a business with burdensome long-term vendor contracts.
Check with business broker or a business attorney to discuss these issues, and good luck in your new business!
Gregory A. May, Esq.
Kiesel and May, Attorneys at Law
2121 McGregor Boulevard
Fort Myers, Florida 33901
T: (239) 334-1800
F: (239) 332-3927
*This communication is for informational purposes only and shall not be deemed formal legal advice or the formation of an attorney-client relationship.
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907