Is a contract still binding if the original company sells a person’s contract to a third party without prior apporval?

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Is a contract still binding if the original company sells a person’s contract to a third party without prior apporval?

Asked on December 12, 2012 under Business Law, Nevada

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Yes, it generally is still binding, with two exceptions:

1) The contract itself had a term or clause prohibiting it from being assigned (transferred or sold), either at all or without consent.

2) The contract was for the provision of personal services. For example, say you are a graphic artist and personally (not as an LLC or corporation) contracted to provide design and layout services for Company X; Company X could not sell or assign your  contract to Company Y (unless Company Y bought Company X).

Otherwise, assignment is legal.


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