assignment by operation law

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Few things are more fundamental to M&A due diligence than determining whether any of the material contracts to which the target is a party require a counterparty’s consent as a condition to the proposed acquisition. And that determination is significantly influenced by the specific language set forth in the contract’s anti-assignment/change of control provision, as well as the form the proposed acquisition takes—i.e., whether the transaction is an asset purchase the target, a purchase of equity the target, or a merger the target (and if a merger, whether that merger is direct or triangular, and forward or reverse). A recent Delaware Superior Court decision, , 2020 WL 5554161 (Del. Super. Sept. 16, 2020), is a stark reminder of the importance of carefully analyzing change of control/anti-assignment provisions and taking advantage of all available structuring alternatives to avoid untoward results that can occur from completing an acquisition deemed to require a counterparty’s consent. involved a claim by a successor to a selling party under an acquisition agreement for payment by the buyer of a Conditional Payment owing to the selling party if the mining property sold pursuant to that agreement remained in operation after a date certain. It appears that the requirements for triggering the obligation to make the Conditional Payment were satisfied, but because of some transactions undertaken by the selling party, and the impact of an anti-assignment clause in the acquisition agreement, the buyer claimed that the person actually asserting entitlement to that Conditional Payment was not so entitled (indeed, no one was because the selling party had ceased to exist). Following the acquisition of the mining property by the buyer, the stockholders of the selling party sold all of their shares in the selling party to a third party, but purported to carve out the Conditional Payment Obligation owing to the selling party from the sale of stock of the selling entity. So, when the Conditional Payment came due, the selling party’s former stockholders, rather than the selling party, sued to collect the Conditional Payment when it was not forthcoming from the buyer. In an earlier decision, 2019 WL 3976078 (Del. Super. Aug. 22, 2019), the court held that the selling party’s former stockholders had no standing to claim the Conditional Payment because the only person entitled to that Conditional Payment was the selling party itself, and there really is no such thing as carving out assets of an entity in favor the entity’s stockholders selling the stock of that entity, without the entity itself assigning (by way of a dividend) those assets to its stockholders. And, of course, if an assignment had occurred it was prohibited by the anti-assignment provision in the agreement creating the Conditional Payment Obligation. Thus, the court dismissed the former stockholders’ claim outright. was the second bite at the apple. If the selling entity’s former stockholders, who purported to retain the right to the Conditional Payment, had no standing to pursue collection of the Conditional Payment themselves, then presumably the selling party still could (and one would assume the selling party would then have an obligation to turn over the Conditional Payment to the former stockholders when collected). But alas, it turns out that, following the acquisition of the stock of the selling party by the third party, the third party undertook a number of transactions under Canadian law to amalgamate the selling party into an entirely new entity as the surviving entity of that amalgamation; the selling entity had ceased to exist as a matter of Canadian law. Thus, the plaintiff in this second bite lawsuit to collect what was presumably otherwise owed was not the selling party to the original acquisition agreement, but a successor to that selling party. While the amalgamation was a creature of Canadian law, the original acquisition agreement containing the anti-assignment clause was governed by Delaware law. The parties apparently conceded that the amalgamation was the equivalent of a merger under Delaware law. The buyer argued that the anti-assignment clause in the original acquisition agreement was violated when the amalgamation occurred without the buyer’s consent; and that the successor had no standing to claim the Conditional Payment. However, under Delaware law, a general prohibition on a party transferring or assigning an agreement does not automatically prohibit a merger involving a contracting party, even one in which the contracting party is not the survivor of such merger. As noted by the Delaware Court of Chancery in , 1993 WL 294847, at 8 (Del. Ch. Aug. 2, 1993): Nonetheless, “[w]hen an anti-assignment clause includes language referencing an assignment ‘by operation of law,’ Delaware courts generally agree that the clause applies to mergers in which the contracting company the surviving entity.” Here the anti-assignment clause in the original acquisition agreement did purport to include a prohibition on assignments “by operation of law.” And, although Delaware has recognized that a merger in which the contracting party the survivor (a reverse triangular merger) is not an assignment by operation of law “because the contract rights remain with the contracting party and do not pass to another entity,” the amalgamation here resulted in a new entity acquiring the contract rights of the original selling party and the original selling party ceasing to exist. Thus, the effect of the anti-assignment clause and its applicability to the amalgamation resulted in the buyer having no obligation for the payment of the Conditional Payment to anyone. Although the court appears to acknowledge the seeming “unfairness of allowing [the buyer] to avoid making a payment it allegedly owes[,]” the court nonetheless concludes that “it is not this Court’s function to save sophisticated contracting parties from an unfair or unanticipated result of their own corporate transactions.” After all, “[t]he parties could have avoided this result through careful drafting during contract negotiations or by utilizing a different corporate structure when [the selling party and the surviving new entity] combined.” (↵ returns to text) Glenn West Weil , Weil’s Global Private Equity Watch, April 27, 2020, . , 2019 WL 3976078, at 2. We have previously addressed how these kind of anti-assignment “workarounds” can sometimes work (or not). Glenn West & Maryam Naghavi, , Weil , Weil’s Global Private Equity Watch, May 2, 2018, . 2020 WL 5554161, at 3. 2020 WL 5554161, at 5.

Few things are more fundamental to M&A due diligence than determining whether any of the material contracts to which the target is a party require a counterparty’s consent as a condition to the proposed acquisition. And that determination is significantly influenced by the specific language set forth in the contract’s anti-assignment/change of control provision, as well as the form the proposed acquisition takes—i.e., whether the transaction is an asset purchase the target, a purchase of equity the target, or a merger the target (and if a merger, whether that merger is direct or triangular, and forward or reverse). A recent Delaware Superior Court decision, , 2020 WL 5554161 (Del. Super. Sept. 16, 2020), is a stark reminder of the importance of carefully analyzing change of control/anti-assignment provisions and taking advantage of all available structuring alternatives to avoid untoward results that can occur from completing an acquisition deemed to require a counterparty’s consent.

involved a claim by a successor to a selling party under an acquisition agreement for payment by the buyer of a Conditional Payment owing to the selling party if the mining property sold pursuant to that agreement remained in operation after a date certain. It appears that the requirements for triggering the obligation to make the Conditional Payment were satisfied, but because of some transactions undertaken by the selling party, and the impact of an anti-assignment clause in the acquisition agreement, the buyer claimed that the person actually asserting entitlement to that Conditional Payment was not so entitled (indeed, no one was because the selling party had ceased to exist).

Following the acquisition of the mining property by the buyer, the stockholders of the selling party sold all of their shares in the selling party to a third party, but purported to carve out the Conditional Payment Obligation owing to the selling party from the sale of stock of the selling entity. So, when the Conditional Payment came due, the selling party’s former stockholders, rather than the selling party, sued to collect the Conditional Payment when it was not forthcoming from the buyer. In an earlier decision, 2019 WL 3976078 (Del. Super. Aug. 22, 2019), the court held that the selling party’s former stockholders had no standing to claim the Conditional Payment because the only person entitled to that Conditional Payment was the selling party itself, and there really is no such thing as carving out assets of an entity in favor the entity’s stockholders selling the stock of that entity, without the entity itself assigning (by way of a dividend) those assets to its stockholders. And, of course, if an assignment had occurred it was prohibited by the anti-assignment provision in the agreement creating the Conditional Payment Obligation. Thus, the court dismissed the former stockholders’ claim outright.

was the second bite at the apple. If the selling entity’s former stockholders, who purported to retain the right to the Conditional Payment, had no standing to pursue collection of the Conditional Payment themselves, then presumably the selling party still could (and one would assume the selling party would then have an obligation to turn over the Conditional Payment to the former stockholders when collected). But alas, it turns out that, following the acquisition of the stock of the selling party by the third party, the third party undertook a number of transactions under Canadian law to amalgamate the selling party into an entirely new entity as the surviving entity of that amalgamation; the selling entity had ceased to exist as a matter of Canadian law. Thus, the plaintiff in this second bite lawsuit to collect what was presumably otherwise owed was not the selling party to the original acquisition agreement, but a successor to that selling party.

While the amalgamation was a creature of Canadian law, the original acquisition agreement containing the anti-assignment clause was governed by Delaware law. The parties apparently conceded that the amalgamation was the equivalent of a merger under Delaware law. The buyer argued that the anti-assignment clause in the original acquisition agreement was violated when the amalgamation occurred without the buyer’s consent; and that the successor had no standing to claim the Conditional Payment. However, under Delaware law, a general prohibition on a party transferring or assigning an agreement does not automatically prohibit a merger involving a contracting party, even one in which the contracting party is not the survivor of such merger. As noted by the Delaware Court of Chancery in , 1993 WL 294847, at *8 (Del. Ch. Aug. 2, 1993):

Nonetheless, “[w]hen an anti-assignment clause includes language referencing an assignment ‘by operation of law,’ Delaware courts generally agree that the clause applies to mergers in which the contracting company the surviving entity.” Here the anti-assignment clause in the original acquisition agreement did purport to include a prohibition on assignments “by operation of law.” And, although Delaware has recognized that a merger in which the contracting party the survivor (a reverse triangular merger) is not an assignment by operation of law “because the contract rights remain with the contracting party and do not pass to another entity,” the amalgamation here resulted in a new entity acquiring the contract rights of the original selling party and the original selling party ceasing to exist. Thus, the effect of the anti-assignment clause and its applicability to the amalgamation resulted in the buyer having no obligation for the payment of the Conditional Payment to anyone.

Although the court appears to acknowledge the seeming “unfairness of allowing [the buyer] to avoid making a payment it allegedly owes[,]” the court nonetheless concludes that “it is not this Court’s function to save sophisticated contracting parties from an unfair or unanticipated result of their own corporate transactions.” After all, “[t]he parties could have avoided this result through careful drafting during contract negotiations or by utilizing a different corporate structure when [the selling party and the surviving new entity] combined.”

(↵ returns to text)
Glenn West Weil , Weil’s Global Private Equity Watch, April 27, 2020, . , 2019 WL 3976078, at *2. We have previously addressed how these kind of anti-assignment “workarounds” can sometimes work (or not). Glenn West & Maryam Naghavi, , Weil , Weil’s Global Private Equity Watch, May 2, 2018, . 2020 WL 5554161, at *3. 2020 WL 5554161, at *5.

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Anti-Assignment Provisions and Assignments by ‘Operation of Law’: What Do I Have to Do? What Should I Do?

Introduction.

One of the key roles of legal due diligence in mergers and acquisitions (M&A) is to assist in the efficient and successful completion of any proposed M&A transaction. Due diligence is not merely a procedural formality but can serve as a proactive shield against unforeseen challenges and risks. One essential aspect of the legal due diligence process is reviewing third-party contracts to which the target entity is party, in order to better understand the scope of its commercial relationships and to anticipate any issues that may arise via the underlying contractual relationships as a result of completing the proposed M&A transaction.

A frequent reality in many M&A transactions is the requirement to obtain consents from third parties upon the “change of control” of the target entity and/or the transfer or assignment of a third-party contract to which the target is party. Notwithstanding the wording of such contracts, in many instances, the business team from the purchaser will often ask the question: “When is consent actually required?” While anti-assignment and change of control provisions are fairly ubiquitous in commercial contracts, the same cannot be said for when the requirement to obtain consent is actually triggered. The specifics of the proposed transaction’s structure will often dictate the purchaser’s next steps when deciding whether the sometimes-cumbersome process of obtaining consents with one or multiple third parties is actually needed.

This article examines what anti-assignment provisions are and how to approach them, depending on the situation at hand, including in the context of transactions where a change of control event may be triggered. This article also discusses how to interpret whether consent is required when faced with an anti-assignment provision which states that an assignment, including an assignment by operation of law , which requires consent from the non-assigning party.

Understanding Anti-Assignment Provisions

Generally, an anti-assignment provision prohibits the transfer or assignment of some or all of the assigning party’s rights and obligations under the contract in question to another person without the non-assigning party’s prior written consent. By way of example, a standard anti-assignment provision in a contract may read as follows:

Company ABC shall not assign or transfer this agreement, in whole or in part, without the prior written consent of Company XYZ.

In this case, Company ABC requires Company XYZ’s prior written consent to assign the contract. Seems simple enough. However, not all anti-assignment provisions are cut from the same cloth. For example, some anti-assignment provisions expand on the prohibition against general contractual assignment by including a prohibition against assignment by operation of law or otherwise . As is discussed in greater detail below, the nuanced meaning of this phrase can capture transactions that typically would not trigger a general anti-assignment provision and can also trigger the requirement to get consent from the non-assigning party for practical business reasons.

To explore this further, it is helpful to consider anti-assignment provisions in the two main structures of M&A transactions: (i) asset purchases and (ii) share purchases.

Context of M&A Transactions: Asset Purchases and Share Purchases

There are key differences between what triggers an anti-assignment provision in an asset purchase transaction versus a share purchase transaction.

i) Asset Purchases

An anti-assignment provision in a contract that forms part of the “purchased assets” in an asset deal will normally be triggered in an asset purchase transaction pursuant to which the purchaser acquires some or all of the assets of the target entity, including some or all of its contracts. Because the target entity is no longer the contracting party once the transaction ultimately closes (since it is assigning its rights and obligations under the contract to the purchaser), consent from the non-assigning party will be required to avoid any potential liability, recourse or termination of said contract as a result of the completion of the transaction.

ii) Share Purchases

Provisions which prohibit the assignment or transfer of a contract without the prior approval of the non-assigning party will not normally, under Canadian law, be captured in a share purchase transaction pursuant to which the purchaser acquires a portion or all of the shares of the target entity. In other words, no new entity is becoming party to that same contract. General anti-assignment provisions are not typically triggered by a share purchase because the contracts are not assigned or transferred to another entity and instead there is usually a “change of control” of the target entity. In such cases, the target entity remains the contracting party under the contract and the consent analysis will be premised on whether the contract requires consent of the third party for a “direct” or “indirect” change of control of the target entity and not the assignment of the contract.

Importantly, some anti-assignment provisions include prohibitions against change of control without prior written consent. For example, the provision might state the following:

Company ABC shall not assign or transfer this agreement, in whole or in part, without the prior written approval of Company XYZ. For the purposes of this agreement, any change of control of Company ABC resulting from an amalgamation, corporate reorganization, arrangement, business sale or asset shall be deemed an assignment or transfer.

In that case, a change of control as a result of a share purchase will be deemed an assignment or transfer, and prior written consent will be required.

A step in many share purchase transactions where the target is a Canadian corporation that often occurs on or soon after closing is the amalgamation of the purchasing entity and the target entity. So, what about anti-assignment provisions containing by operation of law language – do amalgamations trigger an assignment by operation of law? The short answer: It depends on the jurisdiction in which the anti-assignment provision is being scrutinized (typically, the governing law of the contract in question).

Assignments by Operation of Law

In Canada, the assignment of a contract as part of an asset sale, or the change of control of a party to a contract pursuant to a share sale – situations not normally effected via legal statute or court-ordered proceeding in M&A transactions – will not in and of itself effect an assignment of that contract by operation of law . [1]

Still, one must consider the implications of amalgamations, especially in the context of a proposed transaction when interpreting whether consent is required when an anti-assignment provision contains by operation of law language. Under Canadian law, where nuances often blur the lines within the jurisprudence, an amalgamation will not normally effect the assignment of a contract by operation of law . The same does not necessarily hold true for a Canadian amalgamation scrutinized under U.S. legal doctrines or interpreted by U.S. courts. [2]

Difference Between Mergers and Amalgamations

As noted above, after the closing of a share purchase transaction, the purchasing entity will often amalgamate with the target entity ( click here to read more about amalgamations generally). When two companies “merge” in the U.S., we understand that one corporation survives the merger and one ceases to exist which is why, under U.S. law, a merger can result in an assignment by operation of law . While the “merger” concept is commonly used in the U.S., Canadian corporations combine through a process called “amalgamation,” a situation where two corporations amalgamate and combine with neither corporation ceasing to exist. For all of our Canadian lawyer readers, you will remember the Supreme Court of Canada’s description of an amalgamation as “a river formed by the confluence of two streams, or the creation of a single rope through the intertwining of strands.” [3] Generally, each entity survives and shares the pre-existing rights and liabilities of the other, including contractual relationships, as one corporation. [4]

MTA Canada Royalty Corp. v. Compania Minera Pangea, S.A. de C.V.

As a practical note and for the reasons below, particularly in cross-border M&A transactions, it would be wise to consider seeking consent where a contract prohibits assignment by operation of law without the prior consent of the other contracting party when your proposed transaction contemplates an amalgamation.

In MTA Canada Royalty Corp. v. Compania Minera Pangea, S.A. de C.V. (a Superior Court of Delaware decision), the court interpreted a Canadian (British Columbia) amalgamation as an assignment by operation of law , irrespective of the fact that the amalgamation was effected via Canadian governing legislation. In essence, the Delaware court applied U.S. merger jurisprudence to a contract involving a Canadian amalgamation because the contract in question was governed by Delaware law. This is despite the fact that, generally, an amalgamation effected under Canadian common law jurisdictions would not constitute an assignment by operation of law if considered by a Canadian court. As previously mentioned, under Canadian law, unlike in Delaware, neither of the amalgamating entities cease to exist and, technically, there is no “surviving” entity as there would be with a U.S.-style merger. That being said, we bring this to your attention to show that it is possible that a U.S. court (if the applicable third-party contract is governed by U.S. law or other foreign laws) or other U.S. counterparties could interpret a Canadian amalgamation to effect an assignment by operation of law . In this case, as prior consent was not obtained as required by the anti-assignment provision of the contract in question, the Delaware court held that the parties to that agreement were bound by the anti-assignment provision’s express prohibition against all assignments without the other side’s consent. [5]

To avoid the same circumstances that resulted from the decision in MTA Canada Royalty Corp. , seeking consent where an anti-assignment provision includes a prohibition against assignment by operation of law without prior consent can be a practical and strategic option when considering transactions involving amalgamations. It is generally further recommended to do so in order to avoid any confusion for all contracting parties post-closing.

Practical Considerations

The consequences of violating anti-assignment provisions can vary. In some cases, the party attempting to complete the assignment is simply required to continue its obligations under the contract but, in others, assignment without prior consent constitutes default under the contract resulting in significant liability for the defaulting party, including potential termination of the contract. This is especially noteworthy for contracts with third parties that are essential to the target entity’s revenue and general business functions, as the purchaser would run the risk of losing key contractual relationships that contributed to the success of the target business. As such, identifying assignment provisions and considering whether they are triggered by a change of control and require consent is an important element when reviewing the contracts of a target entity and completing legal due diligence as part of an M&A transaction.

There can be a strategic and/or legal imperative to seek consent in many situations when confronted with contractual clauses that prohibit an assignment, either by operation of law or through other means, absent the explicit approval of the non-assigning party. However, the structure of the proposed transaction will often dictate whether consent is even required in the first place. Without considering this nuanced area of M&A transactions, purchasers not only potentially expose themselves to liability but also risk losing key contractual relationships that significantly drive the value of the transaction.

The Capital Markets Group at Aird & Berlis will continue to monitor developments in cross-border and domestic Canadian M&A transactions, including developments related to anti-assignment provisions and commercial contracts generally. Please contact a member of the group if you have questions or require assistance with any matter related to anti-assignment provisions and commercial contracts generally, or any of your cross-border or domestic M&A needs.

[1] An assignment by operation of law can be interpreted as an involuntary assignment required by legal statute or certain court-ordered proceedings. For instance, an assignment of a contract by operation of law may occur in, among other situations: (i) testamentary dispositions; (ii) court-ordered asset transfers in bankruptcy proceedings; or (iii) court-ordered asset transfers in divorce proceedings.

[2] MTA Canada Royalty Corp. v. Compania Minera Pangea, S.A. de C.V ., C. A. No. N19C-11-228 AML, 2020 WL 5554161 (Del. Super. Sept. 16, 2020) [ MTA Canada Royalty Corp. ].

[3] R. v. Black & Decker Manufacturing Co. , [1975] 1 S.C.R. 411.

[4] Certain Canadian jurisdictions, such as the Business Corporations Act (British Columbia), explicitly state that an amalgamation does not constitute an assignment by operation of law (subsection 282(2)).

[5] MTA Canada Royalty Corp .

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Do Change of Control Transactions Constitute an Assignment by Operation of Law?

Commercial l andlords often rely on anti-assignment provisions to restrict the ability of tenants to assign their interest in a lease to a third party . Such provisions will often explicitly restrict assignments by “ operation of law, ” which are generally considered involuntary assignments mandated via a court order. Commercial landlords may assume that a change of control transaction violates a basic anti – assignment cla use, but clear drafting is necessary for Landlords to protect their interests . Landlords wishing to restrict change of control of a tenant entity , should have clear anti-assignment provision s in their leases that expressly restrict such transaction s and characterize such “changes of control” as assignments .

A change of control is a significant change in the equity, ownership, or management of a business entity. This can occur through a merger, consolidation or acquisition.

The general rule is that change of control of a corporate entity is not an assignment by operation of law , and therefore does not violate a basic anti- assignment provision. Courts have reasoned that a landlord entering into a lease with a corporate tenant should be aware that a corporation, or limited liability company, is an entity which exists separate and apart from its ownership, and that a change in ownership of the corporate entity does not change the tenant entity under the lease.

Courts in many states including Florida, New York and Delaware have held that a change of control is not an assignment by operation of law. I n Sears Termite & Pest Control, Inc. v. Arnold , a Florida court held , “ [t] he fact that there is a change in the ownership of corporate stock does not affect the corporation’s existence or its contract rights, or liabilities. ” Further, i n Meso Scale Diagnostics LLC v. Roche Diagnostics GMBH , a Delaware court ruled, “ [ g ] enerally mergers do not result in an assignment by operation of law of assets that began as property of the surviving entity and continued to be such after the merger.”

Importantly, the rule is different if the tenant entity does not survive the transaction. In MTA Canada Royalty Corp. v. Compania Minera Pangea , a Delaware Superior Court held that a merger in which the contracting entity does not survive may be held to be an assignment by operation of law.

If a l andlord inten d s for a change of control of a tenant to violate the anti-assignment clause in its lease, the landlord should ensure that its lease expressly state s that a change of control constitutes an assignment .

This article is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read here. Please review the full disclaimer for more information. Relying on the information provided in this article or communicating with Lowndes through our website does not create an attorney/client relationship.

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Spotting issues with assignment clauses in M&A Due Diligence

Written by: Kira Systems

January 19, 2016

6 minute read

Although not nearly as complex as change of control provisions , assignment provisions may still present a challenge in due diligence projects. We hope this blog post will help you navigate the ambiguities of assignment clauses with greater ease by explaining some of the common variations. (And, if you like it, please check out our full guide on Reviewing Change of Control and Assignment Provisions in Due Diligence. )

What is an Assignment Clause?

First, the basics:

Anti-assignment clauses are common because without them, generally, contracts are freely assignable. (The exceptions are (i) contracts that are subject to statutes or public policies prohibiting their assignment, such as intellectual property contracts, or (ii) contracts where an assignment without consent would cause material and adverse consequences to non-assigning counterparties, such as employment agreements and consulting agreements.) For all other contracts, parties may want an anti-assignment clause that allows them the opportunity to review and understand the impact of an assignment (or change of control) before deciding whether to continue or terminate the relationship.

In the mergers and acquisitions context, an assignment of a contract from a target company entity to the relevant acquirer entity is needed whenever a contract has to be placed in the name of an entity other than the existing target company entity after consummation of a transaction. This is why reviewing contracts for assignment clauses is so critical.

A simple anti-assignment provision provides that a party may not assign the agreement without the consent of the other party. Assignment provisions may also provide specific exclusions or inclusions to a counterparty’s right to consent to the assignment of a contract. Below are five common occurrences in which assignment provisions may provide exclusions or inclusions.

Common Exclusions and Inclusions

Exclusion for change of control transactions.

In negotiating an anti-assignment clause, a company would typically seek the exclusion of assignments undertaken in connection with change of control transactions, including mergers and sales of all or substantially all of the assets of the company. This allows a company to undertake a strategic transaction without worry. If an anti-assignment clause doesn’t exclude change of control transactions, a counterparty might materially affect a strategic transaction through delay and/or refusal of consent. Because there are many types of change of control transactions, there is no standard language for these. An example might be:

In the event of the sale or transfer by [Party B] of all or substantially all of its assets related to this Agreement to an Affiliate or to a third party, whether by sale, merger, or change of control, [Party B] would have the right to assign any or all rights and obligations contained herein and the Agreement to such Affiliate or third party without the consent of [Party A] and the Agreement shall be binding upon such acquirer and would remain in full force and effect, at least until the expiration of the then current Term.

Exclusion for Affiliate Transactions

A typical exclusion is one that allows a target company to assign a contract to an affiliate without needing the consent of the contract counterparty. This is much like an exclusion with respect to change of control, since in affiliate transfers or assignments, the ultimate actors and responsible parties under the contract remain essentially the same even though the nominal parties may change. For example:

Either party may assign its rights under this Agreement, including its right to receive payments hereunder, to a subsidiary, affiliate or any financial institution, but in such case the assigning party shall remain liable to the other party for the assigning party’s obligations hereunder. All or any portion of the rights and obligations of [Party A] under this Agreement may be transferred by [Party A] to any of its Affiliates without the consent of [Party B].

Assignment by Operation of Law

Assignments by operation of law typically occur in the context of transfers of rights and obligations in accordance with merger statutes and can be specifically included in or excluded from assignment provisions. An inclusion could be negotiated by the parties to broaden the anti-assignment clause and to ensure that an assignment occurring by operation of law requires counterparty approval:

[Party A] agrees that it will not assign, sublet or otherwise transfer its rights hereunder, either voluntarily or by operations of law, without the prior written consent of [Party B].

while an exclusion could be negotiated by a target company to make it clear that it has the right to assign the contract even though it might otherwise have that right as a matter of law:

This Guaranty shall be binding upon the successors and assigns of [Party A]; provided, that no transfer, assignment or delegation by [Party A], other than a transfer, assignment or delegation by operation of law, without the consent of [Party B], shall release [Party A] from its liabilities hereunder.

This helps settle any ambiguity regarding assignments and their effects under mergers statutes (particularly in forward triangular mergers and forward mergers since the target company ceases to exist upon consummation of the merger).

Direct or Indirect Assignment

More ambiguity can arise regarding which actions or transactions require a counterparty’s consent when assignment clauses prohibit both direct and indirect assignments without the consent of a counterparty. Transaction parties will typically choose to err on the side of over-inclusiveness in determining which contracts will require consent when dealing with material contracts. An example clause prohibiting direct or indirect assignment might be:

Except as provided hereunder or under the Merger Agreement, such Shareholder shall not, directly or indirectly, (i) transfer (which term shall include any sale, assignment, gift, pledge, hypothecation or other disposition), or consent to or permit any such transfer of, any or all of its Subject Shares, or any interest therein.

“Transfer” of Agreement vs. “Assignment” of Agreement

In some instances, assignment provisions prohibit “transfers” of agreements in addition to, or instead of, explicitly prohibiting “assignments”. Often, the word “transfer” is not defined in the agreement, in which case the governing law of the contract will determine the meaning of the term and whether prohibition on transfers are meant to prohibit a broader or narrower range of transactions than prohibitions on assignments. Note that the current jurisprudence on the meaning of an assignment is broader and deeper than it is on the meaning of a transfer. In the rarer case where “transfer” is defined, it might look like this:

As used in this Agreement, the term “transfer” includes the Franchisee’s voluntary, involuntary, direct or indirect assignment, sale, gift or other disposition of any interest in…

The examples listed above are only of five common occurrences in which an assignment provision may provide exclusions or inclusions. As you continue with due diligence review, you may find that assignment provisions offer greater variety beyond the factors discussed in this blog post. However, you now have a basic understand of the possible variations of assignment clauses. For a more in-depth discussion of reviewing change of control and assignment provisions in due diligence, please download our full guide on Reviewing Change of Control and Assignment Provisions in Due Diligence.

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Definitions

Operation of Law (Best Overview: Definition And Examples)

What is operation of law ?

How do you define operation of law?

Can the law create rights or obligations automatically and by default?

In this article, we will break down the notion of “ operation of law ” so you know all there is to know about it.

We will look at the operation of law definition , how it works , how the law can operate a termination of rights, assignment or transfer , we’ll look at an agency by operation of law example , operation of law in real estate and more.

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Table of Contents

Operation of law definition

According to Cornell Law School’s Legal Information Institute, operation of law is defined as:

A way in which someone gets certain rights (or sometimes responsibilities) automatically under the law without taking action, requiring cooperation from another person, or being the subject of a court order. Author

What is notable with this definition is that certain “ rights ” or “ responsibilities ” will apply to a situation by default or automatically by applying the legal regime or statute.

What does operation of law mean

Operation of law or by operation of law means that a person’s rights and obligations are created by the application of the law, statute or regulation regardless of the person’s desire or intention.

In other words, a person may acquire certain rights or become liable for certain obligations through the application of legal rules without consideration of his or her intention .

The law can grant rights, impose restrictions or prohibitions on a person by operation of law or determine what a person can or cannot do.

For example:

If two people own a property as joint tenants with right of survivorship, in the event one dies, the other will acquire full title to the property by operation of law Author

In this example, the law operates a transfer of title of the property by the application of the joint tenancy rules.

Agency by operation of law

The rights, responsibilities and obligations of parties to an agency contract may be affected by the operation of law.

For instance, termination of agency by operation of law occurs when:

The parties expressly provide for termination by operation of law
For defined cause
The agent’s performance is partially or fully executed

In a contract of agency , the principal does not have an obligation to remain in the contract and can terminate the agency by giving reasonable notice to the agent at any time.

This termination right is granted to the principal by ‘operation of law’.

Assignment by operation of law

Assignment by operation of law is when certain rights are assigned to another.

Title to a patent can be assigned in a financial transaction such as a merger or as a result of operation of law in the event of bankruptcy Author

Termination by operation of law

In contract law , a contract may be terminated by operation of law.

In the following situations, a contract may be terminated without consideration of the intention of the parties:

An offer may become null and void if the person dies
A contract may be terminated (or voided) if it was formed based on fraudulent acts
A contract may be terminated if a person did not have the capacity to sign
A contract may be deemed unenforceable and voided in full by operation of law

Discharge by operation of law

Discharge by operation of the law is when a person is freed or liberated from certain obligations by operation of law.

When a person goes bankrupt, the person’s debts are discharged. This means that the person is no longer legally bound to make any payments to his or her creditors. Author

Reset by operation of law

Reset by operation of law is when a court resets the case for a legal reason that it has identified.

When a case is reset, it means that the litigants will need to start the case from the beginning.

Typically, a case is reset by a judge exercising its judicial powers .

Power of attorney operation of law

In a power of attorney, the person appointing an attorney can define that by operation of law, the power of attorney may lapse or not .

KNOW ALL PERSONS BY THESE PRESENTS that the undersigned hereby appoint John Doe as my attorney-in-fact. My attorney-in-fact shall have the power to act hereunder. The duration of such powers shall not be affected by the lapse of time, and all such powers shall remain in effect until express revocation of the present power of attorney, the execution of these same powers to any other individual, or expiration by operation of law. Author

Transfer by operation of law

What’s common is the transfer of property by operation of law.

In other words, by applying certain laws, statutes or rules, an asset will be transferred or titled conveyed by operation of law.

The common example is with respect to the following ownership rights :

Joint tenants with right of survivorship
Joint tenants in common
Intestate death

If two people own a property together as joint tenants with right of survivorship , in the event of the death of one, the survivor becomes the full owner of the property.

In this case, the title to the property is transferred by operation of law.

Similarly, if a property is held by two people as tenants in common , in the event one dies, the deceased share in the property will be transferred to his or her estate.

In a case when a person dies without a will ( intestate death ), the law will determine the heirs and have the person’s assets transferred to those heirs.

Operation of law real estate

A typical example of how the operation of law works in real estate is with regard to the doctrine of adverse possession .

A non-owner of a property , by “operation of law”, may get title to land, property or real estate as he or she has been occupying the same for a certain period of time .

The rights granted to a non-owner of a property are granted regardless of the intention of the property owner or the non-owner.

Operation of law clause

The parties to a contract can include an operation of law clause where they define certain events to trigger certain legal consequences without the need of a party to act in any way.

“Operation of law” means the assignment of Party A’s assets by the court order in the context of a merger. Author

Operation of law examples

There are many examples where, by operation of law, a person acquires certain rights or obligations.

Here are examples of how a person may be impacted by the operation of the law:

If a person passes away without a will, the heirs will be determined by the operation of law
A person’s assets may be transferred upon death to his or her heirs without a will through the operation of law
The title of land can pass to a non-owner by operation of law through adverse possession
The title to a property or asset held by joint tenants with right of survivorship will be transferred to the survivor in the event one dies by operation of law
An easement by prescription rights occurs by operation of law
When a party fails to pursue a complaint will lead to its dismissal by operation of law
The assets of a bankrupt person or entity will be transferred to the trustee or bankruptcy estate by operation of law through the application of the bankruptcy laws
When a child turns 18 , by operation of law the guardianship ends
Operation of law discharge happens when a person’s debt is discharged by filing for bankruptcy
Operation of law agency occurs when the law creates a principal and agent relationship not because of an agreement but by application of the law

Operation of law FAQ

What does operation of law mean?

The operation of law legal definition is when a person acquires legal rights or obligations automatically through the application of the law.

A contract may be void by operation of law if the person did not have the capacity to sign. In this example, for a contract to be legally formed in compliance with contract laws, you must strictly observe the contract formation elements which include capacity. Without capacity, by operation of law, the contract is void. Author

What does assignment by operation of law mean?

Assignment by operation of law means when certain rights, property or assets are assigned or transferred to another legally without the need of the property owner to act in any way.

In the event of bankruptcy, the assets of the bankrupt are assigned to the bankruptcy trustee by operation of law Author

In the event of a person’s death without a will, the assets of a person are assigned, by operation of law, to the heirs designated by law Author

Can a corporation be created by operation of law?

A de facto corporation or de jure corporation is an enterprise recognized by operation of law although it did not comply with every aspect of the law in regards to its formation.

The law creates a corporation or enterprise by operation of law to provide some protection against third parties.

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A Guide to Understanding Anti-Assignment Clauses

Introduction

With the increasing trend of globalization in the business world, Israeli companies and investors are commonly entering into agreements with U.S.-based entities. One of the most frequently found clauses in U.S. commercial agreements is an anti-assignment provision that prevents either or both of the parties from assigning the agreement to a third party prior to receiving the consent of the non-assigning party. Many transactions will also require the due diligence review of a large number of U.S. commercial agreements that the target has entered into. The following post will provide an overview and general guidance on the proper analysis of anti-assignment clauses.

Silent Provision and Change of Control Provision

In the event that an agreement does not contain an anti-assignment provision, a contract is generally assignable without the consent of the non-assigning party. See Peterson v. District of Columbia Lottery and Charitable Games Control Board , 673 A.2d 664 (D.C. 1996) (“The right to assign is presumed, based upon principles of unhampered transferability of property rights and of business convenience.”) Exceptions include where the assignment affects the duties of the other party to the contract, where the contract is considered to be a personal contract and when the assignment violates public policy (i.e. tort liability).

On the other hand, many contracts contain provisions that not only prevent the assignment of the contract, but also state that a change of control of the target is deemed an assignment or the contract contains a separate clause requiring consent in the event of a change of control. This type of provision will often be triggered in transactions in which a buyer is acquiring the target company. A careful review of change of control clauses is thus especially imperative and often very fact specific to the deal at hand.

Deal Structures

One of the commonly used anti-assignment provisions reads as follows: “No party may assign any of its rights under this Agreement, by operation of law or otherwise, to a third party without the prior written consent of the non-assigning party.” In the situation where the target has entered into agreements that contain this clause, whether or not an assignment is considered to have taken place in the event of the acquisition of the target will largely depend on the specific deal structure of the transaction.

The commonly used deal structures are an asset acquisition, a stock acquisition and a merger.

Asset Acquisition : In an asset acquisition the buyer only acquires those assets and liabilities of a target that are specifically listed in the Asset Purchase Agreement. Any agreement that has an anti-assignment clause will be triggered in the event of an asset acquisition. Indeed, one of the disadvantages of structuring a corporate acquisition as an asset acquisition is that contracts that will be transferred must be assigned
Stock Acquisition : In a stock acquisition, a buyer acquires a target’s stock directly from the selling shareholders. After the closing of the Stock Purchase Agreement, the target will continue as it existed prior to the acquisition with respect to its ownership of asset and liabilities. Thus, in essence, the anti-assignment clause was never triggered in the first place. See Baxter Pharm. v. ESI Lederle , 1999 WL 160148 (Del. Ch. 1999).
A direct merger occurs when the target merges with and into the buyer, and the buyer continues as the surviving entity. In a similar fashion to an asset acquisition, this type of merger will trigger the anti-assignment clause
A forward triangular merger occurs when the target merges with and into the buyer’s merger subsidiary, with the merger subsidiary surviving the merger. This type of merger will trigger the anti-assignment clause. See Tenneco Automotive Inc. v. El Paso Corporation , 2002 WL 45930 (Del. Ch. 2002) and Star Cellular Telephone Company, Inc. v. Baton Rouge CGSA, Inc., 19 Del. J. Corp. L. 875 (Del. Ch. 1993).
A reverse triangular merger occurs when the buyer’s subsidiary merges with and into the target, with the target surviving as a wholly owned subsidiary of the buyer. In effect, the target continues to exist after the closing. The Delaware Chancery Court in Meso Scale Diagnostics, LLC v. Roche Diagnostics GmbH, 2013 WL 655021 (Del. Ch. Feb. 22, 2013) held that the acquisition of a target in a reverse triangular merger did not violate an existing agreement of the target that prohibited assignments by operation of law. The court noted that generally, mergers do not result in an assignment by operation of law of assets that began as property of the surviving entity and continued to be such after the merger. Thus there is a significant difference between a reverse triangular merger and both a direct merger and forward triangular merger, as in those cases the target was not the surviving company of the merger. Note, however, that the matter is not uniformly resolved. In SQL Solutions, Inc. v. Oracle Corp. (N.D. Cal. 1991), a United States District Court in the Northern District of California applied California law and federal IP principles to hold that a reverse triangular merger constitutes an assignment by operation of law.

Additional Considerations

Damages and Termination : Some courts have held that a contractual provision prohibiting assignment operates only to limit the parties’ right to assign the contract (for which the remedy would be damages for breach of a covenant not to assign) but the provision does not limit the power to actually assign the contract (which would invalidate the assignment), unless the contract explicitly states that a non-conforming assignment shall be “void” or “invalid.” See, e.g., Bel-Ray Co v. Chemrite (Pty.) Ltd ., 181 F. 3d 435 (3d Cir. 1999). It is also imperative to review the termination section of an agreement, as certain agreements contain a provision by which the non-assigning party has the right to terminate the agreement in the event of an assignment.

As described above, any review of U.S. commercial agreements is highly dependent on the structure of the deal and at times, the specific jurisdiction governing the agreement. With offices across the United States, and specifically in Delaware, New York, and California, all states with highly sophisticated and oft-invoked commercial laws, Greenberg Traurig is uniquely situated in a position to offer high value legal services to Israeli clients.

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Anti-Assignment Provisions And Assignments By 'Operation Of Law': What Do I Have To Do? What Should I Do?

Contributor.

Introduction

A frequent reality in many M&A transactions is the requirement to obtain consents from third parties upon the "change of control" of the target entity and/or the transfer or assignment of a third-party contract to which the target is party. Notwithstanding the wording of such contracts, in many instances, the business team from the purchaser will often ask the question: "When is consent actually required?" While anti-assignment and change of control provisions are fairly ubiquitous in commercial contracts, the same cannot be said for when the requirement to obtain consent is actually triggered. The specifics of the proposed transaction's structure will often dictate the purchaser's next steps when deciding whether the sometimes-cumbersome process of obtaining consents with one or multiple third parties is actually needed.

This article examines what anti-assignment provisionsare and how to approach them, depending on the situation at hand, including in the context of transactions where a change of control event may be triggered. This article also discusses how to interpret whether consent is required when faced with an anti-assignment provision which states that an assignment, including an assignment by operation of law , requires consent from the non-assigning party.

Understanding Anti-Assignment Provisions

Generally, an anti-assignment provision prohibits the transfer or assignment of some or all of the assigning party's rights and obligations under the contract in question to another person without the non-assigning party's prior written consent. By way of example, a standard anti-assignment provision in a contract may read as follows:

Company ABC shall not assign or transfer this agreement, in whole or in part, without the prior written consent of Company XYZ.

In this case, Company ABC requires Company XYZ's prior written consent to assign the contract. Seems simple enough. However, not all anti-assignment provisions are cut from the same cloth. For example, some anti-assignment provisions expand on the prohibition against general contractual assignment by including a prohibition against assignment by operation of law or otherwise . As is discussed in greater detail below, the nuanced meaning of this phrase can capture transactions that typically would not trigger a general anti-assignment provision and can also trigger the requirement to get consent from the non-assigning party for practical business reasons.

To explore this further, it is helpful to consider anti-assignment provisions in the two main structures of M&A transactions: (i) asset purchases and (ii) share purchases.

Context of M&A Transactions: Asset Purchases and Share Purchases

There are key differences between what triggers an anti-assignment provision in an asset purchase transaction versus a share purchase transaction.

i) Asset Purchases

An anti-assignment provision in a contract that forms part of the "purchased assets" in an asset deal will normally be triggered in an asset purchase transaction pursuant to which the purchaser acquires some or all of the assets of the target entity, including some or all of its contracts. Because the target entity is no longer the contracting party once the transaction ultimately closes (since it is assigning its rights and obligations under the contract to the purchaser), consent from the non-assigning party will be required to avoid any potential liability, recourse or termination of said contract as a result of the completion of the transaction.

ii) Share Purchases

Provisions which prohibit the assignment or transfer of a contract without the prior approval of the non-assigning party will not normally, under Canadian law, be captured in a share purchase transaction pursuant to which the purchaser acquires a portion or all of the shares of the target entity. In other words, no new entity is becoming party to that same contract. General anti-assignment provisions are not typically triggered by a share purchase because the contracts are not assigned or transferred to another entity and instead there is usually a "change of control" of the target entity. In such cases, the target entity remains the contracting party under the contract and the consent analysis will be premised on whether the contract requires consent of the third party for a "direct" or "indirect" change of control of the target entity and not the assignment of the contract.

Importantly, some anti-assignment provisions include prohibitions against change of control without prior written consent. For example, the provision might state the following:

In that case, a change of control as a result of a share purchase will be deemed an assignment or transfer, and prior written consent will be required.

Assignments by Operation of Law

Difference Between Mergers and Amalgamations

As noted above, after the closing of a share purchase transaction, the purchasing entity will often amalgamate with the target entity ( click here to read more about amalgamations generally). When two companies "merge" in the U.S., we understand that one corporation survives the merger and one ceases to exist which is why, under U.S. law, a merger can result in an assignment by operation of law . While the "merger" concept is commonly used in the U.S., Canadian corporations combine through a process called "amalgamation," a situation where two corporations amalgamate and combine with neither corporation ceasing to exist. For all of our Canadian lawyer readers, you will remember the Supreme Court of Canada's description of an amalgamation as "a river formed by the confluence of two streams, or the creation of a single rope through the intertwining of strands." 3 Generally, each entity survives and shares the pre-existing rights and liabilities of the other, including contractual relationships, as one corporation. 4

MTA Canada Royalty Corp. v. Compania Minera Pangea, S.A. de C.V.

In MTA Canada Royalty Corp. v. Compania Minera Pangea, S.A. de C.V. (a Superior Court of Delaware decision), the court interpreted a Canadian (British Columbia) amalgamation as an assignment by operation of law , irrespective of the fact that the amalgamation was effected via Canadian governing legislation. In essence, the Delaware court applied U.S. merger jurisprudence to a contract involving a Canadian amalgamation because the contract in question was governed by Delaware law. This is despite the fact that, generally, an amalgamation effected under Canadian common law jurisdictions would not constitute an assignment by operation of law if considered by a Canadian court. As previously mentioned, under Canadian law, unlike in Delaware, neither of the amalgamating entities cease to exist and, technically, there is no "surviving" entity as there would be with a U.S.-style merger. That being said, we bring this to your attention to show that it is possible that a U.S. court (if the applicable third-party contract is governed by U.S. law or other foreign laws) or other U.S. counterparties could interpret a Canadian amalgamation to effect an assignment by operation of law . In this case, as prior consent was not obtained as required by the anti-assignment provision of the contract in question, the Delaware court held that the parties to that agreement were bound by the anti-assignment provision's express prohibition against all assignments without the other side's consent. 5

Practical Considerations

The consequences of violating anti-assignment provisions can vary. In some cases, the party attempting to complete the assignment is simply required to continue its obligations under the contract but, in others, assignment without prior consent constitutes default under the contract resulting in significant liability for the defaulting party, including potential termination of the contract. This is especially noteworthy for contracts with third parties that are essential to the target entity's revenue and general business functions, as the purchaser would run the risk of losing key contractual relationships that contributed to the success of the target business. As such, identifying assignment provisions and considering whether they are triggered by a change of control and require consent is an important element when reviewing the contracts of a target entity and completing legal due diligence as part of an M&A transaction.

1. An assignment by operation of law can be interpreted as an involuntary assignment required by legal statute or certain court-ordered proceedings. For instance, an assignment of a contract by operation of law may occur in, among other situations: (i) testamentary dispositions; (ii) court-ordered asset transfers in bankruptcy proceedings; or (iii) court-ordered asset transfers in divorce proceedings.

2. MTA Canada Royalty Corp. v. Compania Minera Pangea, S.A. de C.V ., C. A. No. N19C-11-228 AML, 2020 WL 5554161 (Del. Super. Sept. 16, 2020) [ MTA Canada Royalty Corp. ].

3. R. v. Black & Decker Manufacturing Co. , [1975] 1 S.C.R. 411.

4. Certain Canadian jurisdictions, such as the Business Corporations Act (British Columbia), explicitly state that an amalgamation does not constitute an assignment by operation of law (subsection 282(2)).

5. MTA Canada Royalty Corp .

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Giordano, Halleran & Ciesla, P.C., Attorneys at Law

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A recent Delaware Court of Chancery decision examined whether a reverse triangular merger (“RTM”) qualified as a prohibited assignment by operation of law under Delaware law. In Meso Scale Diagnostics, LLC v. Roche Diagnostics, GMBH , 62 A.3d 62 (Del. Ch. 2013), defendants Roche Diagnostics and its affiliates and subsidiaries, including wholly-owned subsidiary BioVeris Corp., became parties to certain patent licensing agreements involving plaintiffs and their affiliates regarding certain patents owned by BioVeris. As part of the transactions between the entities, the plaintiffs, Roche Diagnostics, BioVeris and certain other parties entered into a related Global Consent and Agreement under which the parties consented to, among other things, the transactions between certain of the parties and their affiliates and the consummation of those transactions. The Global Consent contained an anti-assignment clause that provided as follows:

“ Neither this Agreement nor any of the rights, interests or obligations under [it] shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other parties ; provided, however, that the parties acknowledge and agree that the conversion of [BioVeris] in accordance with Section 2.01 of the Restructuring Agreement and the continuation of BioVeris as a result thereof shall not be deemed to be an assignment and shall not require the consent of any party…”

Roche Diagnostics eventually acquired BioVeris through a reverse triangular merger involving a subsidiary of Roche Diagnostics, with BioVeris remaining intact as the surviving entity. Roche Diagnostics did not seek the consent of plaintiffs prior to consummating the RTM involving BioVeris. Plaintiffs thereafter commenced suit against Roche Diagnostics, alleging, among other things, that the RTM involving BioVeris constituted a breach of the anti-assignment provisions of the Global Consent. However, the language at issue in the Global Consent did not expressly prohibit a change of control or ownership of BioVeris.

Roche Diagnostics argued that because BioVeris remained as a surviving entity of the RTM with all of its prior assets, rights and liabilities intact, BioVeris never assigned the license agreements or anything else. Roche Diagnostics also argued that a RTM was very similar to a stock acquisition, and that Delaware case law generally held that stock acquisitions and other simple changes of ownership generally do not constitute assignments. Plaintiffs, on the other hand, contended that mergers generally, including RTMs, can result in an assignment by operation of law. Among other things, plaintiffs argued that Delaware case law on forward triangular mergers (“FTMs”) suggested that a merger could be treated as an assignment by operation of law and cited to a California federal court case holding that a RTM resulted in an assignment by operation of law.

In a 2011 ruling on a preliminary motion to dismiss filed by defendants, the Court of Chancery initially found a lack of clear guidance on the issue under Delaware law. The Court of Chancery also found that the parties had two competing, but reasonable, constructions of the term assignment “by operation of law” and that there was ambiguity as to whether such terms were intended to apply to RTMs. The Court of Chancery therefore denied defendants’ preliminary motion to dismiss.

However, in a 2013 ruling on a motion for summary judgment filed by defendants regarding the anti-assignment language, the Court of Chancery, after further examination of the applicable Delaware law and the parties’ arguments, granted Roche Diagnostic’s motion, finding that the language in the Global Consent prohibiting assignment “by operation of law or otherwise” should not be construed to encompass RTMs. In the 2013 ruling, the Court of Chancery rejected plaintiffs’ arguments regarding the applicability of Delaware cases examining FTMs, finding, among other things, that those cases involved contracts with non-surviving entities that were forward-merged out of existence and into a separate surviving entity. The Court of Chancery also rejected plaintiffs’ pleas to apply California federal court precedent in this Delaware case.

In support of its determination, the Court of Chancery looked to guidance found in Section 259 of the Delaware General Corporation Law, which provides as follows:

“When any merger or consolidation shall have become effective under this chapter, for all purposes of the laws of this State the separate existence of all the constituent corporations, or of all such constituent corporations except the one into which the other or others of such constituent corporations have been merged , as the case may be, shall cease and the constituent corporations shall become a new corporation, or be merged into 1 of such corporations, as the case may be, possessing all the rights, privileges, powers and franchises as well of a public as of a private nature, and being subject to all the restrictions, disabilities and duties of each of such corporations so merged or consolidated; and all and singular, the rights, privileges, powers and franchises of each of said corporations, and all property, real, personal and mixed, and all debts due to any of said constituent corporations on whatever account, as well for stock subscriptions as all other things in action or belonging to each of such corporations shall be vested in the corporation surviving or resulting from such merger or consolidation ….

The Court of Chancery also examined existing Delaware case law examining stock acquisitions and mergers and other outside legal commentary indicating (by a vast majority) that a RTM, like other mere changes in ownership of a business, generally does not constitute an assignment by operation of law as to the surviving entity. Based upon these findings and an examination of the anti-assignment language in the Global Consent, the Court ultimately found that plaintiffs’ assertions that the contracting parties intended the anti-assignment language in the Global Consent regarding assignments “by operation of law” to apply to RTMs was not reasonable.

The Meso Scale Diagnostics decision serves to reaffirm the understanding that under Delaware law, anti-assignment provisions are generally not triggered by RTMs, even when such anti-assignment provisions reference assignments by operation of law. In light of the ruling in Meso Scale Diagnostics , parties to contracts (whether in Delaware, New Jersey or elsewhere) wanting a right to consent to an RTM involving any of the other contracting parties would be well-served to include change of control provisions in those contracts.

This blog update is not considered to be legal advice, and is intended for educational purposes only.

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Assignments: The Basic Law

The assignment of a right or obligation is a common contractual event under the law and the right to assign (or prohibition against assignments) is found in the majority of agreements, leases and business structural documents created in the United States.

As with many terms commonly used, people are familiar with the term but often are not aware or fully aware of what the terms entail. The concept of assignment of rights and obligations is one of those simple concepts with wide ranging ramifications in the contractual and business context and the law imposes severe restrictions on the validity and effect of assignment in many instances. Clear contractual provisions concerning assignments and rights should be in every document and structure created and this article will outline why such drafting is essential for the creation of appropriate and effective contracts and structures.

The reader should first read the article on Limited Liability Entities in the United States and Contracts since the information in those articles will be assumed in this article.

Basic Definitions and Concepts:

An assignment is the transfer of rights held by one party called the “assignor” to another party called the “assignee.” The legal nature of the assignment and the contractual terms of the agreement between the parties determines some additional rights and liabilities that accompany the assignment. The assignment of rights under a contract usually completely transfers the rights to the assignee to receive the benefits accruing under the contract. Ordinarily, the term assignment is limited to the transfer of rights that are intangible, like contractual rights and rights connected with property. Merchants Service Co. v. Small Claims Court , 35 Cal. 2d 109, 113-114 (Cal. 1950).

An assignment will generally be permitted under the law unless there is an express prohibition against assignment in the underlying contract or lease. Where assignments are permitted, the assignor need not consult the other party to the contract but may merely assign the rights at that time. However, an assignment cannot have any adverse effect on the duties of the other party to the contract, nor can it diminish the chance of the other party receiving complete performance. The assignor normally remains liable unless there is an agreement to the contrary by the other party to the contract.

The effect of a valid assignment is to remove privity between the assignor and the obligor and create privity between the obligor and the assignee. Privity is usually defined as a direct and immediate contractual relationship. See Merchants case above.

Further, for the assignment to be effective in most jurisdictions, it must occur in the present. One does not normally assign a future right; the assignment vests immediate rights and obligations.

No specific language is required to create an assignment so long as the assignor makes clear his/her intent to assign identified contractual rights to the assignee. Since expensive litigation can erupt from ambiguous or vague language, obtaining the correct verbiage is vital. An agreement must manifest the intent to transfer rights and can either be oral or in writing and the rights assigned must be certain.

Note that an assignment of an interest is the transfer of some identifiable property, claim, or right from the assignor to the assignee. The assignment operates to transfer to the assignee all of the rights, title, or interest of the assignor in the thing assigned. A transfer of all rights, title, and interests conveys everything that the assignor owned in the thing assigned and the assignee stands in the shoes of the assignor. Knott v. McDonald’s Corp ., 985 F. Supp. 1222 (N.D. Cal. 1997)

The parties must intend to effectuate an assignment at the time of the transfer, although no particular language or procedure is necessary. As long ago as the case of National Reserve Co. v. Metropolitan Trust Co ., 17 Cal. 2d 827 (Cal. 1941), the court held that in determining what rights or interests pass under an assignment, the intention of the parties as manifested in the instrument is controlling.

The intent of the parties to an assignment is a question of fact to be derived not only from the instrument executed by the parties but also from the surrounding circumstances. When there is no writing to evidence the intention to transfer some identifiable property, claim, or right, it is necessary to scrutinize the surrounding circumstances and parties’ acts to ascertain their intentions. Strosberg v. Brauvin Realty Servs., 295 Ill. App. 3d 17 (Ill. App. Ct. 1st Dist. 1998)

The general rule applicable to assignments of choses in action is that an assignment, unless there is a contract to the contrary, carries with it all securities held by the assignor as collateral to the claim and all rights incidental thereto and vests in the assignee the equitable title to such collateral securities and incidental rights. An unqualified assignment of a contract or chose in action, however, with no indication of the intent of the parties, vests in the assignee the assigned contract or chose and all rights and remedies incidental thereto.

More examples: In Strosberg v. Brauvin Realty Servs ., 295 Ill. App. 3d 17 (Ill. App. Ct. 1st Dist. 1998), the court held that the assignee of a party to a subordination agreement is entitled to the benefits and is subject to the burdens of the agreement. In Florida E. C. R. Co. v. Eno , 99 Fla. 887 (Fla. 1930), the court held that the mere assignment of all sums due in and of itself creates no different or other liability of the owner to the assignee than that which existed from the owner to the assignor.

And note that even though an assignment vests in the assignee all rights, remedies, and contingent benefits which are incidental to the thing assigned, those which are personal to the assignor and for his sole benefit are not assigned. Rasp v. Hidden Valley Lake, Inc ., 519 N.E.2d 153, 158 (Ind. Ct. App. 1988). Thus, if the underlying agreement provides that a service can only be provided to X, X cannot assign that right to Y.

Novation Compared to Assignment:

Although the difference between a novation and an assignment may appear narrow, it is an essential one. “Novation is a act whereby one party transfers all its obligations and benefits under a contract to a third party.” In a novation, a third party successfully substitutes the original party as a party to the contract. “When a contract is novated, the other contracting party must be left in the same position he was in prior to the novation being made.”

A sublease is the transfer when a tenant retains some right of reentry onto the leased premises. However, if the tenant transfers the entire leasehold estate, retaining no right of reentry or other reversionary interest, then the transfer is an assignment. The assignor is normally also removed from liability to the landlord only if the landlord consents or allowed that right in the lease. In a sublease, the original tenant is not released from the obligations of the original lease.

Equitable Assignments:

An equitable assignment is one in which one has a future interest and is not valid at law but valid in a court of equity. In National Bank of Republic v. United Sec. Life Ins. & Trust Co. , 17 App. D.C. 112 (D.C. Cir. 1900), the court held that to constitute an equitable assignment of a chose in action, the following has to occur generally: anything said written or done, in pursuance of an agreement and for valuable consideration, or in consideration of an antecedent debt, to place a chose in action or fund out of the control of the owner, and appropriate it to or in favor of another person, amounts to an equitable assignment. Thus, an agreement, between a debtor and a creditor, that the debt shall be paid out of a specific fund going to the debtor may operate as an equitable assignment.

In Egyptian Navigation Co. v. Baker Invs. Corp. , 2008 U.S. Dist. LEXIS 30804 (S.D.N.Y. Apr. 14, 2008), the court stated that an equitable assignment occurs under English law when an assignor, with an intent to transfer his/her right to a chose in action, informs the assignee about the right so transferred.

An executory agreement or a declaration of trust are also equitable assignments if unenforceable as assignments by a court of law but enforceable by a court of equity exercising sound discretion according to the circumstances of the case. Since California combines courts of equity and courts of law, the same court would hear arguments as to whether an equitable assignment had occurred. Quite often, such relief is granted to avoid fraud or unjust enrichment.

Note that obtaining an assignment through fraudulent means invalidates the assignment. Fraud destroys the validity of everything into which it enters. It vitiates the most solemn contracts, documents, and even judgments. Walker v. Rich , 79 Cal. App. 139 (Cal. App. 1926). If an assignment is made with the fraudulent intent to delay, hinder, and defraud creditors, then it is void as fraudulent in fact. See our article on Transfers to Defraud Creditors .

But note that the motives that prompted an assignor to make the transfer will be considered as immaterial and will constitute no defense to an action by the assignee, if an assignment is considered as valid in all other respects.

Enforceability of Assignments:

Whether a right under a contract is capable of being transferred is determined by the law of the place where the contract was entered into. The validity and effect of an assignment is determined by the law of the place of assignment. The validity of an assignment of a contractual right is governed by the law of the state with the most significant relationship to the assignment and the parties.

In some jurisdictions, the traditional conflict of laws rules governing assignments has been rejected and the law of the place having the most significant contacts with the assignment applies. In Downs v. American Mut. Liability Ins. Co ., 14 N.Y.2d 266 (N.Y. 1964), a wife and her husband separated and the wife obtained a judgment of separation from the husband in New York. The judgment required the husband to pay a certain yearly sum to the wife. The husband assigned 50 percent of his future salary, wages, and earnings to the wife. The agreement authorized the employer to make such payments to the wife.

After the husband moved from New York, the wife learned that he was employed by an employer in Massachusetts. She sent the proper notice and demanded payment under the agreement. The employer refused and the wife brought an action for enforcement. The court observed that Massachusetts did not prohibit assignment of the husband’s wages. Moreover, Massachusetts law was not controlling because New York had the most significant relationship with the assignment. Therefore, the court ruled in favor of the wife.

Therefore, the validity of an assignment is determined by looking to the law of the forum with the most significant relationship to the assignment itself. To determine the applicable law of assignments, the court must look to the law of the state which is most significantly related to the principal issue before it.

Assignment of Contractual Rights:

Generally, the law allows the assignment of a contractual right unless the substitution of rights would materially change the duty of the obligor, materially increase the burden or risk imposed on the obligor by the contract, materially impair the chance of obtaining return performance, or materially reduce the value of the performance to the obligor. Restat 2d of Contracts, § 317(2)(a). This presumes that the underlying agreement is silent on the right to assign.

If the contract specifically precludes assignment, the contractual right is not assignable. Whether a contract is assignable is a matter of contractual intent and one must look to the language used by the parties to discern that intent.

In the absence of an express provision to the contrary, the rights and duties under a bilateral executory contract that does not involve personal skill, trust, or confidence may be assigned without the consent of the other party. But note that an assignment is invalid if it would materially alter the other party’s duties and responsibilities. Once an assignment is effective, the assignee stands in the shoes of the assignor and assumes all of assignor’s rights. Hence, after a valid assignment, the assignor’s right to performance is extinguished, transferred to assignee, and the assignee possesses the same rights, benefits, and remedies assignor once possessed. Robert Lamb Hart Planners & Architects v. Evergreen, Ltd. , 787 F. Supp. 753 (S.D. Ohio 1992).

On the other hand, an assignee’s right against the obligor is subject to “all of the limitations of the assignor’s right, all defenses thereto, and all set-offs and counterclaims which would have been available against the assignor had there been no assignment, provided that these defenses and set-offs are based on facts existing at the time of the assignment.” See Robert Lamb , case, above.

The power of the contract to restrict assignment is broad. Usually, contractual provisions that restrict assignment of the contract without the consent of the obligor are valid and enforceable, even when there is statutory authorization for the assignment. The restriction of the power to assign is often ineffective unless the restriction is expressly and precisely stated. Anti-assignment clauses are effective only if they contain clear, unambiguous language of prohibition. Anti-assignment clauses protect only the obligor and do not affect the transaction between the assignee and assignor.

Usually, a prohibition against the assignment of a contract does not prevent an assignment of the right to receive payments due, unless circumstances indicate the contrary. Moreover, the contracting parties cannot, by a mere non-assignment provision, prevent the effectual alienation of the right to money which becomes due under the contract.

A contract provision prohibiting or restricting an assignment may be waived, or a party may so act as to be estopped from objecting to the assignment, such as by effectively ratifying the assignment. The power to void an assignment made in violation of an anti-assignment clause may be waived either before or after the assignment. See our article on Contracts.

Noncompete Clauses and Assignments:

Of critical import to most buyers of businesses is the ability to ensure that key employees of the business being purchased cannot start a competing company. Some states strictly limit such clauses, some do allow them. California does restrict noncompete clauses, only allowing them under certain circumstances. A common question in those states that do allow them is whether such rights can be assigned to a new party, such as the buyer of the buyer.

A covenant not to compete, also called a non-competitive clause, is a formal agreement prohibiting one party from performing similar work or business within a designated area for a specified amount of time. This type of clause is generally included in contracts between employer and employee and contracts between buyer and seller of a business.

Many workers sign a covenant not to compete as part of the paperwork required for employment. It may be a separate document similar to a non-disclosure agreement, or buried within a number of other clauses in a contract. A covenant not to compete is generally legal and enforceable, although there are some exceptions and restrictions.

Whenever a company recruits skilled employees, it invests a significant amount of time and training. For example, it often takes years before a research chemist or a design engineer develops a workable knowledge of a company’s product line, including trade secrets and highly sensitive information. Once an employee gains this knowledge and experience, however, all sorts of things can happen. The employee could work for the company until retirement, accept a better offer from a competing company or start up his or her own business.

A covenant not to compete may cover a number of potential issues between employers and former employees. Many companies spend years developing a local base of customers or clients. It is important that this customer base not fall into the hands of local competitors. When an employee signs a covenant not to compete, he or she usually agrees not to use insider knowledge of the company’s customer base to disadvantage the company. The covenant not to compete often defines a broad geographical area considered off-limits to former employees, possibly tens or hundreds of miles.

Another area of concern covered by a covenant not to compete is a potential ‘brain drain’. Some high-level former employees may seek to recruit others from the same company to create new competition. Retention of employees, especially those with unique skills or proprietary knowledge, is vital for most companies, so a covenant not to compete may spell out definite restrictions on the hiring or recruiting of employees.

A covenant not to compete may also define a specific amount of time before a former employee can seek employment in a similar field. Many companies offer a substantial severance package to make sure former employees are financially solvent until the terms of the covenant not to compete have been met.

Because the use of a covenant not to compete can be controversial, a handful of states, including California, have largely banned this type of contractual language. The legal enforcement of these agreements falls on individual states, and many have sided with the employee during arbitration or litigation. A covenant not to compete must be reasonable and specific, with defined time periods and coverage areas. If the agreement gives the company too much power over former employees or is ambiguous, state courts may declare it to be overbroad and therefore unenforceable. In such case, the employee would be free to pursue any employment opportunity, including working for a direct competitor or starting up a new company of his or her own.

It has been held that an employee’s covenant not to compete is assignable where one business is transferred to another, that a merger does not constitute an assignment of a covenant not to compete, and that a covenant not to compete is enforceable by a successor to the employer where the assignment does not create an added burden of employment or other disadvantage to the employee. However, in some states such as Hawaii, it has also been held that a covenant not to compete is not assignable and under various statutes for various reasons that such covenants are not enforceable against an employee by a successor to the employer. Hawaii v. Gannett Pac. Corp. , 99 F. Supp. 2d 1241 (D. Haw. 1999)

It is vital to obtain the relevant law of the applicable state before drafting or attempting to enforce assignment rights in this particular area.

Conclusion:

In the current business world of fast changing structures, agreements, employees and projects, the ability to assign rights and obligations is essential to allow flexibility and adjustment to new situations. Conversely, the ability to hold a contracting party into the deal may be essential for the future of a party. Thus, the law of assignments and the restriction on same is a critical aspect of every agreement and every structure. This basic provision is often glanced at by the contracting parties, or scribbled into the deal at the last minute but can easily become the most vital part of the transaction.

As an example, one client of ours came into the office outraged that his co venturer on a sizable exporting agreement, who had excellent connections in Brazil, had elected to pursue another venture instead and assigned the agreement to a party unknown to our client and without the business contacts our client considered vital. When we examined the handwritten agreement our client had drafted in a restaurant in Sao Paolo, we discovered there was no restriction on assignment whatsoever…our client had not even considered that right when drafting the agreement after a full day of work.

One choses who one does business with carefully…to ensure that one’s choice remains the party on the other side of the contract, one must master the ability to negotiate proper assignment provisions.

Founded in 1939, our law firm combines the ability to represent clients in domestic or international matters with the personal interaction with clients that is traditional to a long established law firm.

Can I Assign My Commercial Lease? (Part 2- Assignments By Operation Of Law)

Earlier this year, I wrote a blog post about assigning commercial leases generally. Sometimes, contractual rights or obligations get transferred without an express assignment. This can happen, for example, where a party to the contract gets acquired by someone else, or where the party’s ownership or control changes hands. An entity tenant under a commercial lease might be a corporation which gets bought up by another corporation, or an LLC tenant might have a change in its underlying membership. Such a transfer of rights under a contract occurs “by operation of law” rather than through an express assignment; under such circumstances, the law ordinarily presumes that someone who buys the tenant or acquires control of the tenant naturally acquires and assumes the tenant’s rights and obligations under the lease. We therefore refer to this succession as an assignment “by operation of law.”

But the landlord may not be happy with the new situation for a number of reasons. Perhaps the successor entity does not have the same financial strength as the original tenant; perhaps the new tenant has a different reputation or operates a business which would create an unpleasant or off-putting atmosphere for neighboring commercial tenants; perhaps the landlord has a specific objection to people or personalities who now control the tenant entity.

Sometimes, tenants intentionally structure transactions to avoid triggering the need to obtain the landlord’s consent for the transfer of tenant rights under the commercial lease. The landlord may see this as a de facto assignment which violates the spirit of an anti-assignment provision, while the tenant or successors with new control of the tenant view themselves as absolutely entitled to continue the lease over the landlord’s objection.

Under Washington law, even though they may be valid, lease provisions prohibiting or restricting rights to assignment are strictly construed as they are not favored in the law. Therefore, where the lease is silent regarding assignments by operation of law, and where there is otherwise no breach of the lease agreement, the landlord probably has no right to object to the de facto transfer of rights and may not unilaterally terminate the lease. In other jurisdictions, the majority view is that, “The fact that the members of the entity change, such as when the stockholders at the time the lease is made later transfer their stock, or a partner in the partnership drops out and a new partner replaces him, or the beneficiaries of the trust change, does not constitute an alienation by the landlord or the tenant that is in violation of a restraint on alienation, absent specific language in the restraint provision that covers such change in the nature of the entity involved.” There does not appear to be any Washington case expressly adopting or rejecting this view, but Washington case law on this subject generally appears consistent with this majority view.

All of this is to say that it is critical for parties to a commercial lease to specify when a lease can or cannot be assigned. If the landlord’s willingness to lease is based upon the personal reputation or relationship with key persons associated with an entity tenant, the landlord should carefully take the time to contemplate and negotiate an assignment provision to cover acceptable and unacceptable transfer scenarios.

Whether you are a commercial tenant looking to assign your lease, or you are a landlord being asked to consent to an assignment, the lawyers at Beresford Booth can help. We have extensive experience advising clients on real estate matters.

To learn more about commercial lease assignments, please contact Beresford Booth at [email protected] or by phone at (425) 776-4100 .

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“By Operation of Law” (Including Draft No-Assignment Language)

30 September 2021 23 June 2011 | Ken Adams

In Meso Scale Diagnostics, LLC v. Roche Diagnostics GMBH (go here for a PDF copy), the Delaware Court of Chancery held that it’s not clear whether for purposes of a no-assignment provision a reverse triangular merger constitutes an assignment “by operation of law.” (A reverse triangular merger is when Sub merges into Target.)

I’m not going to go into any detail regarding the case, as that information is readily available elsewhere. (Plucking a couple of examples at random, go here for Milbank’s analysis and go here for Shearman & Sterling’s analysis.)

Transfers by operation of law are generally considered involuntary transfers. They include court-ordered property transfers, bankruptcy-related transfers, and transfers to or from an executor or an administrator. Whether mergers and consolidations are transfers by operation of law is an open question. The cases reach inconsistent results.

That suggests that if you use the phrase by operation of law , you run the risk of getting into a fight over exactly what it means. And the Meso Scale Diagnostics case provides a great example of exactly that.

So what should you do instead? Koncision’s confidentiality-agreement template uses a bare-bones no-assignment provision that doesn’t get into by-operation-of-law territory, so here’s a more detailed version that I’ve just come up with:

Without the prior written consent of the other party, neither party may voluntarily or by court order (1) assign any of its rights under this agreement, whether by contract or by merger (whether that party is the surviving or disappearing entity), consolidation, dissolution, or otherwise, or (2) delegate any of its obligations under this agreement or its performance in satisfaction of any conditions to any obligations of the other party under this agreement. Any assignment or delegation in breach of this section X will be void.

Some observations:

I’m aware it doesn’t read very easily.
If you provide for the possibility of consent, it would be safest to assume that consent can’t be unreasonably withheld. If you have a problem with that, omit any mention of consent.
I think it’s helpful to distinguish the issue of volition (voluntary or or by court order) from the mechanism of assignment (by contract or something else).
I suggest that “by court order” is what’s left if you eliminate mergers, consolidations, and dissolution from by operation of law .
The reference to “the surviving or disappearing entity” covers both direct mergers, triangular mergers, and reverse triangular mergers.
Don’t simply prohibit assigning the entire contract—a court might construe that as prohibiting just delegation of duties.
The reference to “performance in satisfaction of any conditions” acknowledges that if you promise to pay me $50 if I mow your lawn, I might want to delegate the task of mowing your lawn to someone else. If I do so, I’m not delegating an obligation, I’m delegating performance aimed at satisfying a condition. I got this idea from Negotiating and Drafting Contract Boilerplate , but I’ve chosen to articulate it differently.
Saying that any assignment or delegation in breach will be void might be enough by itself. But including a prohibition too would provide a remedy if the other party nevertheless tries to assign or delegate, thereby causing you to incur legal fees.
Saying that a court-ordered assignment will be void won’t work if the law overrides any restriction on assignment. See this August 2006 post on AdamsDrafting on how that plays out in bankruptcy.
If you’re worried about a change of control, you might want to handle that by means of an event-of-default provision rather than a no-assignment provision: it’s a bit of a stretch to consider a change in Acme’s ownership as constituting assignment by Acme of its rights under a contract.

But once you have your broad no-assignment wording, you have to determine whether for a given transaction you need the full monty , something less, nothing at all, or a provision authorizing assignment. I won’t get into that here.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting , and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.

9 thoughts on ““By Operation of Law” (Including Draft No-Assignment Language)”

Ken, thanks for the mention of the book. Language involving “by operation of law”, seems a bit specialist for a confidentiality agreement. As to what it means, I think it is a sweep-up that may cover oddities, eg:

– contracts with an individual that may continue when he dies, eg copyright licence agreements? – contracts that become contracts with a new entity by virtue of a law.

In the latter category, I can cite my former client Royal Free Hospital School of Medicine, which was dissolved and whose assets transferred to University College London under the University College London Act 1996 (see section 5 which deals with automatic transfer of property without any assignment). See http://www.legislation.gov.uk/ukla/1996/3/contents/enacted

To tee up a potential Plan B, counsel for a non-assigning party might ask for a termination right — if the other party engages in a merger that the non-assigning party doesn’t like, and the merger would not be considered an “assignment” under applicable law, then the non-assigning party can terminate the agreement.[1] [2]

[1] Of course, the consequences of termination would have to be thought through and suitably addressed.

[2] I’ve never been 100% comfortable with the concept of terminating the Agreement. My late partner and mentor Tom Arnold was of the school of thought that contracts per se are historical facts and can never be terminated – only specific rights and duties can be terminated.

I have some nitpicks.

The Texas statute on the effect of a merger (section 10.008 at http://www.statutes.legis.state.tx.us/Docs/BO/pdf/BO.10.pdf ) specifically says that a merger vests rights in property in the successor organization without any assignment or transfer having occurred. Someone who knows this law better than me might be able to comment on whether that would include, for example, a lease to either real property or capital equipment. If you nonetheless want to prohibit the lease vesting int he successor, i think your language will have to use a word other than “assign.”

Along the same lines, the statute makes the successor entity be the primary obligor without calling it a delegation, so the non-delegation language might not be effective. The statute does allow a contract to specify additional obligors.

The two points above are important mainly because Texas law allows a merger to have multiple surviving or new entities result from the merger. So, your valuable lease might end up being held by a much less creditworthy entity. I don’t have a solution for this problem that would be generally applicable. I think instead, the drafter will have to look towards protections elsewhere, like warranties that the lessee would breach by becoming less creditworthy or a termination right that kicks in on any organic event.

You might want to change “court order” to “government action” to handle situations where regulatory bodies take control of a company (e.g. banks, insurers) and also have statutory, quasi-judicial power to transfer obligations to successors.

Finally, your construction of “neither party may” seems to run afoul of the guidance in MSCD 2.150. But the meaning of “may” in the construction remains consistent with MCSD and the alternative construction — each party shall not — is a clunky here, so I see why you chose the alternative.

Chris: Hmm. Regarding your first two points, I’ll have to put on my thinking cap. I might take a while to respond.

Yes, I will change “court order” to something that refers to “Government Body” or some such. I did something similar for purposes of Koncision’s confidentiality-agreement template.

I periodically fall foul of my own guidelines, and I’m delighted when people point that out. But regarding “neither party may,” have a look at MSCD 2.152.

“By operation of law” could also cover death, if one of the parties is an individual. I doubt it would be any more effective than trying to prohibit assignment by court order. There are, of course, ways of addressing the effect of death directly, if it’s a real issue.

Pingback: Koncision » Rethinking the “No Assignment” Provision

One senior lawyer advised me a one-sided transfer of shares from A to B under “operation of law” without any transfer deed or court order. He explained the following: 1. A breached the shareholders agreement. The agreement said that in case any shareholder breaches, his shares will be bought by other shareholders. 2. Since the agreement was breached, hence the shares were transferred to other shareholders under “operation of law”. 3. Since it came under operation of law, hence the transfer of shares became “transmission of shares” which needs no court order or transfer deed. I was shocked to listen this approach. Can you comment.

so does permanent disability fall under operation of the law and therefore Transmission applies?

Your page is very useful for us mortals to understand some technical language. I am grateful indeed.

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138. Assignment by operation of law.

The rights and liabilities 1 of either party to a contract may in certain circumstances be assigned by operation of law, as, for example, when a party

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operation of law

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A way in which someone gets certain rights (or sometimes responsibilities) automatically under the law without taking action, requiring cooperation from another person, or being the subject of a court order . This situation usually arises from the happening of an event, such as a death, that triggers a change in human affairs as created by functions of the law. Some examples of such actions by operation of law include a joint tenancy where any surviving joint tenants get title to the jointly owned property automatically when one joint tenant dies; asset transfers when someone dies without a will and that person's legal heirs automatically inherit property from their estate ; or the transfer of property from the debtor to a bankruptcy estate pursuant to the Bankruptcy Code . Just as the death in the first two examples automatically triggers the transfer of property title or assets, in the third example the mere commencement of the bankruptcy case triggers the transfer without the need for any transfer-related activity by the debtor.

Operation of law can also describe what a person can or cannot do, or what rights or interests a person has. For example, a prohibition created by statute , a business license granted by an agency , or a property rights determined by the judicial interpretation of a will. In each case, the outcome or effect is created by operation of law.

[Last updated in August of 2020 by the Wex Definitions Team ]

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Anti-Assignment Clause Prohibiting Assignment by Operation of Law Applies to Subsequent Merger

In MTA Canada Royalty v. Compania Minera Pangea, Judge Abigail LeGrow considered whether an agreement’s anti-assignment clause operated to void an assignment that occurred as a result of a subsequent merger between a contracting party to the agreement and a third party.

October 07, 2020 at 09:03 AM

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In MTA Canada Royalty v. Compania Minera Pangea, S.A. de C.V. , C.A. No. N19C-11-228 AML CCLD (Del. Super. Sept. 16, 2020), Judge Abigail LeGrow considered whether an agreement’s anti-assignment clause operated to void an assignment that occurred as a result of a subsequent merger between a contracting party to the agreement and a third party. She held that the anti-assignment clause prohibiting an assignment “by operation of law” without the other party’s consent applied to a subsequent merger in which the contracting party was not the surviving entity.

In 2016, the defendant, Compania Minera Pangea, S.A. de C.V. (CMP), purchased certain mineral rights in a mine located in Mexico from Alberta Ltd. They executed an assignment and assumption agreement that provided, in addition to a cash payment to Alberta of $5.25 million at closing, an additional $1 million payment to Alberta conditioned on the mine remaining in operation after a specified date. The agreement, which was governed by Delaware law, included an anti-assignment clause prohibiting Alberta from assigning its rights to any other party without CMP’s consent. The clause read, in part:

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UK – English High Court Finds That Assignment Of Arbitration Clause By Operation Of Law Prohibited By Anti-assignment Clause.

March 7, 2023 by Rohin Pujari

The English High Court has concluded that an anti-assignment clause can prevent the assignment of an arbitration clause to an insurer pursuing subrogation rights by operation of law.

The decision in Dassault Aviation SA v Mitsui Sumitomo Insurance Co Ltd [2022] EWHC 3287 (Comm) concluded that the relevant test for whether an assignment is in breach of an anti-assignment clause depends on whether the purported assignment by law is the result of voluntary decisions of the assigning party.

In this case, the assignor acted voluntarily in bringing about the assignment by operation of law, resulting in a breach of the anti-assignment clause. Consequently, the insurer could not establish jurisdiction for the arbitral tribunal to hear the subrogated claim.

While the judgment was specific to the construction of the clause in the case, it has significant ramifications for arbitration practitioners and the insurance industry. We note that permission to appeal has been granted.

The case concerned an English law contract to sell aircraft from Dassault to Mitsui Bussan Aerospace Co Ltd ( “MBA” ), with both an anti-assignment clause and an arbitration clause.

Without notice to Dassault, MBA entered into a separate contract of insurance with Mitsui Sumitomo Insurance Co Ltd ( “MSI” ) to insure against delayed delivery to MBA’s end customer. Delivery was delayed resulting in an insured event. Japanese statute provided for an automatic subrogation of any claim arising from the insured event upon the payment of the insurance proceeds from MSI to MBA. MSI subsequently filed a Request for Arbitration against Dassault.

When considering its own jurisdiction, the arbitral tribunal found in favour of MSI, holding that the anti-assignment clause was not breached by an assignment by operation of law. The dissenting arbitrator found the operation of law to arise from voluntary acts of MBA (i.e. by entering into the insurance policy) and thus inconsistent with the anti-assignment clause. Dassault brought a jurisdictional challenge under s67 of the English Arbitration Act.

The High Court concluded that: (i) a purported assignment of contractual rights in breach of contract is void; (ii) there is no blanket rule that an anti-assignment clause cannot apply to assignments by operation of law; (iii) the question is essentially one of construction of the anti-assignment clause itself; and (iv) where there is a clear textual construction – as was considered to be the case here – this generally takes precedence over commercial purpose or public policy.

Cockerill J took a broader approach when assessing the assignment in question, by looking beyond just the immediate cause of the assignment (such as whether it was by operation of law or not), and instead examined the level of voluntariness displayed by the assignor. The judge acknowledged that there was some uncertainty regarding the required level of voluntariness, but determined that in this case, the threshold was met by MBA voluntarily entering into the insurance contract, which ultimately led to the possibility of Japanese-law subrogation (i.e. the assignment by operation of law). This approach was deemed the general rule in English law and consistent with the specific clause at issue in this case.

The judge also considered MSI’s argument that if this had been an English law subrogation, then the anti-assignment clause may not have been applicable, as subrogation under English law is generally not seen as requiring a transfer or assignment. The judge accepted this potential divergence but did not consider it necessary to decide what the outcome would have been in that scenario. Cockerill J did however suggest that in certain cases, such as those with significant commercial or security concerns, even if the subrogation does not involve a legal transfer, the parties’ intentions and public policy may weigh more heavily against the assignability of the claim, including an arbitration clause, to a third party.

However, the assignment by operation of law in this case was prohibited by the anti-assignment clause and therefore the arbitral Tribunal possessed no jurisdiction to decide the dispute. The tribunal’s arbitration award on jurisdiction (which was dealt with as a preliminary issue) was to be varied accordingly.

The endorsement of the ‘voluntariness’ test for anti-assignment clauses in the context of arbitration is significant, and parties should be encouraged to review their anti-assignment provisions to explicitly include or exclude assignments by operation of law (whether voluntary or not).

The impact of this decision on subrogation under English law is uncertain, as the judge did not fully address the effects of anti-assignment clauses on subrogation under English law. However, parties who anticipate subrogating rights (including to insurers) should take care in assessing how the mechanisms in their contract will enable those rights to take effect. Similarly, parties (such as insurers or indemnifying parties) who are looking to rely on subrogation rights need to assess how any anti-assignment provisions might impact upon such subrogation.

For further information, please contact:

Craig Tevendale , Partner, Herbert Smith Freehills

[email protected]

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Southport-Fort Fisher Ferry operations resume

SOUTHPORT, N.C. (WECT) - Southport-Fort Fisher Ferry operations have resumed after being suspended Tuesday morning, June 25, according to an announcement from the North Carolina Department of Transportation.

Per the NCDOT, operations were suspended due to mechanical issues earlier in the morning.

“Good news! We have resumed normal ferry operations. If you have any questions or for more information, please call 910-477-5200,” an update states.

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Gardaí visit nail bars and fast-food outlets as part of anti-exploitation operation

Women involved in prostitution in the republic also identified and offered assistance during irish element of europol-coordinated week of action.

A high-visibility policing presence was put in place at railway stations, Dublin Port and airports as part of the operation. Photograph: Collins Photo Agency

Gardaí have visited nail bars, fast-food restaurants and agricultural businesses as part of an operation aimed at identifying foreign nationals trafficked into the Republic for the purposes of labour exploitation.

Women working in prostitution were also spoken to during the weeklong operation and offered information and advice.

A high visibility policing presence was put in place at railway stations, Dublin Port and airports aimed at reaching out to vulnerable people being exploited. Gardaí were trying to identify people arriving into the country, or being moved around, for the purposes of forced labour or the sex-for-sale market.

The emphasis of the Irish operation, which was effectively part of a wider global policing week of action, was on reaching vulnerable people and victims rather then executing search warrants or arresting perpetrators. The operation focused on mafia-type, ethnicity- and family-based crime organisations.

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It is understood gardaí visited a number of premises – including in Dublin, Clare and Limerick – with a view to detecting obvious signs of labour-based exploitation. These included foreign workers not being able to produce identity of travel documents because they were being held by others in control of them.

Det Supt Derek Maguire of the Garda National Protective Services Bureau said the co-ordinated operation, under Europol, on June 3rd-9th demonstrated the ability of the Garda and police forces from more than 40 other countries “to combat the organised crime gangs that target the most vulnerable in our society”.

He said: “We are committed to supporting victims of human trafficking, and to bringing persons intent on exploiting human beings for personal gain, to justice.”

The Garda operation involved members of the Human Trafficking Investigation and Coordination Unit being present at Dublin, Cork and Shannon airports, Connolly train station in Dublin and Dublin Port to identify possible victims of trafficking and exploitation and to raise awareness.

[ Human trafficking becoming ‘more prevalent’ in Ireland, says Depaul chief ]

Gardaí – including those from the protective services bureau and Garda National Immigration Bureau, as well as officials from the Workplace Relations Commission – visited premises in Dublin, Clare and Limerick.

[ Sex workers in Belgium to receive pension contributions and maternity leave under labour overhaul ]

“A number of potential victims of human trafficking were spoken to at the locations,” the Garda said in a statement. “A number of females were identified as working in the sex industry and all were provided with information on support organisations.”

While some of the other European police forces – and those in Nigeria, Vietnam, Laos, Thailand, Brazil and Colombia – unearthed extreme cases of exploitation, the Garda did not detect the same types of cases.

In Hungary, for example, the police arrested a couple who had sold their children for sex to people living locally, forced them into street begging and beat them as well as tying them up in a room.

In Laos a Chinese interpreter was found to have duped 14 Vietnamese nationals into working on online financial scams with the promise of high-paid jobs.

As part of the operation, some 219 suspects were arrested, mostly across Europe, with 1,221 adult victims and 153 child victims assisted. Some 363 documents were also seized and 276 investigations commenced.

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FY24 National Initiatives: Law Enforcement Training and Technical Assistance

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With this solicitation, BJA seeks to fund four national training and technical assistance (TTA) programs to support law enforcement and criminal justice stakeholders Task Force Leadership, Operations and Management (Category 1), Specialized Units TTA (Category 2), Crime Gun Intelligence Center TTA (Category 3) and Police Recruiting, and Retention Among Underrepresented Groups (Category 4).

Solicitation Categories:

Category 1 – Enhancing Task Force Leadership, Operations, and Management
Category 2 – Specialized Units TTA
Category 3 – Crime Gun Intelligence Center TTA
Category 4 – Police Recruiting and Retention Among Underrepresented Groups

Eligible Applicants:

Nonprofits having a 501(c)(3) status with the IRS, other than institutions of higher education
Nonprofits that do not have a 501(c)(3) status with the IRS, other than institutions of higher education
For-profit organizations other than small businesses
Small businesses
National nonprofit organizations
For-profit (commercial) organizations (including tribal non-profit or for-profit organizations)
Institutions of higher education (including tribal institutions of higher education) that have expertise and experience in managing TTA for evidence based criminal justice programs.
Public- and State-controlled institutions of higher education
Private institutions of higher education
Native American tribal governments (Federally recognized)
Native American tribal organizations (other than federally recognized tribal governments)
Private institutions of higher education
Public and state-controlled institutions of higher education
For-profit organizations other than small businesses

Solicitation Webinar

BJA will hold a webinar to provide a detailed overview of this solicitation and allow interested applicants to ask questions. Information on the webinar is forthcoming.

See the solicitation for additional opportunity and eligibility details, as well as directions on how to apply.

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FY24 Byrne State Crisis Intervention Program Formula Solicitation
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Press Release - 06-20-2024

FOR IMMEDIATE RELEASE June 20, 2024

DMV BEGINS ANNUAL SUMMER UNDERAGE DRINKING CRACKDOWN

Enforcement Effort Focuses on Fake ID Use at Concert Venues

The New York State Department of Motor Vehicles (DMV) is again working to prevent underage drinking by checking for fake IDs at concerts this summer throughout New York.

New York State Department of Motor Vehicles investigators will be joined by investigators from the State Liquor Authority, State Police, State Park Police, and local law enforcement for the annual Operation Prevent enforcement detail.

“One of the pleasures of the summer season is the many outdoor concert venues New Yorkers can enjoy, and nothing mars a fun summer day more than a tragic crash caused by underage drinking,” said Mark J.F. Schroeder, DMV Commissioner and Chair of the Governor’s Traffic Safety Committee. “This initiative is one of the key ways we are keeping everyone safe on the roads and at summer hot spots this season.”

The underage drinking enforcement details will continue through the summer at concert venues across the state.

New York State Police Superintendent Steven G. James said, “We urge all New Yorkers to take advantage of summer and all the fun activities in their communities – but please do so responsibly. We will be working diligently with our partners to discourage and prevent the use of fake IDs and the needless tragedies that can result from underage drinking.”

Chief Michael Daddona of the New York State Park Police said, "Our number one priority for our patrons and employees is safety and preventing underage drinking is no exception. By identifying fake IDs, we can ensure that concertgoers of all ages remain safe at our venues. The New York State Park Police are committed to the prevention of illegal use of alcohol and will continue to work in and around our state parks with our partners in New York State to get the word out.”

Last year, DMV investigators cited 312 concertgoers and bar patrons for attempting to use fake identification to purchase alcoholic beverages when they are below the legal drinking age. A total of 389 fake IDs were seized.

Operation Prevent enforcement sweeps will be conducted at the Saratoga Performing Arts Center, Northwell Health at Jones Beach Theater, Darien Lake Performing Arts Center, CMAC in Canandaigua, and the Empower FCU Amphitheater at Lakeview in Syracuse, as well as other locations where underage concertgoers are likely to gather.

If someone under 21 is found to be using a fake ID or someone else's ID to buy alcohol, they can be ticketed and their license can be suspended or revoked for a minimum of 90 days or up to one year.

“In order to exercise our mission and support Governor Kathy Hochul’s public safety priority, the State Liquor Authority will again join together with our agency partners this year to ensure a fun and safe summer concert series for everyone,” said State Liquor Authority Chair Lily Fan.

Operation Prevent is supported by the Governor's Traffic Safety Committee. The committee coordinates traffic safety activities in New York, and it awards federal highway safety grant funds to local, state, and not-for-profit agencies for projects to improve highway safety and reduce deaths and serious injuries due to crashes.

OASAS Commissioner Dr. Chinazo Cunningham said, “Underage drinking can cause both short-term and long-term health issues, and it is important to do all we can to keep alcohol out of the hands of people who are under 21. This annual effort is a way for New York State to send the message that underage alcohol use is not safe, and it is a vital part of the ongoing prevention efforts across New York State. We look forward to continuing our ongoing work with our partners to address this issue and keep New Yorkers safe.”

New Yorkers struggling with addiction, or whose loved ones are struggling, can find help and hope by calling the state's toll-free, 24-hour, 7-day-a-week HOPEline at 1-877-8-HOPENY (1-877-846-7369) or by texting HOPENY (Short Code 467369).

Available addiction treatment including crisis/detox, inpatient, residential, or outpatient care can be found using the New York State Office of Addiction Services and Supports Treatment Availability Dashboard at FindAddictionTreatment.ny.gov or through the New York State Office of Addiction Services and Supports website .

For more information about DMV, follow DMV on Facebook , X and Instagram .

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IMAGES

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Assignment by Operation of Law
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Operation of Law (Best Overview: Definition And Examples)
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COMMENTS

Mergers and Restrictions on Assignments by "Operation of Law"
Nonetheless, " [w]hen an anti-assignment clause includes language referencing an assignment 'by operation of law,' Delaware courts generally agree that the clause applies to mergers in which the contracting company is not the surviving entity.". [3] Here the anti-assignment clause in the original acquisition agreement did purport to ...
Anti-Assignment Provisions and Assignments by 'Operation of Law': What
Assignments by Operation of Law. In Canada, the assignment of a contract as part of an asset sale, or the change of control of a party to a contract pursuant to a share sale - situations not normally effected via legal statute or court-ordered proceeding in M&A transactions - will not in and of itself effect an assignment of that contract ...
Mergers and Restrictions on Assignments by "Operation of Law"
Mergers and Restrictions on Assignments by "Operation of Law". Weil Gotshal & Manges LLP. USA September 22 2020. Few things are more fundamental to M&A due diligence than determining whether ...
Assigning Contracts in the Context of M&A Transactions
Under this structure, the subsidiary obtains all of the target company's assets and liabilities by operation of law. Simple anti-assignment clauses are generally not triggered in a forward triangular merger because the rights are vested, and not assigned, by operation of law. Therefore, the target's contracts generally transfer ...
Anti-Assignment Provisions and Assignments by 'Operation of Law': What
Assignments by Operation of Law. In Canada, the assignment of a contract as part of an asset sale, or the change of control of a party to a contract pursuant to a share sale - situations not ...
Do Change of Control Transactions Constitute an Assignment by Operation
Commercial l andlords often rely on anti-assignment provisions to restrict the ability of tenants to assign their interest in a lease to a third party. Such provisions will often explicitly restrict assignments by " operation of law, " which are generally considered involuntary assignments mandated via a court order. Commercial landlords may assume that a change of control transaction ...
Spotting issues with assignment clauses in M&A Due Diligence
Assignment by Operation of Law. Assignments by operation of law typically occur in the context of transfers of rights and obligations in accordance with merger statutes and can be specifically included in or excluded from assignment provisions. An inclusion could be negotiated by the parties to broaden the anti-assignment clause and to ensure ...
Operation of Law (Best Overview: Definition And Examples)
The parties to a contract can include an operation of law clause where they define certain events to trigger certain legal consequences without the need of a party to act in any way. For example: "Operation of law" means the assignment of Party A's assets by the court order in the context of a merger.
A Guide to Understanding Anti-Assignment Clauses
The court noted that generally, mergers do not result in an assignment by operation of law of assets that began as property of the surviving entity and continued to be such after the merger. Thus ...
Anti-Assignment Provisions And Assignments By 'Operation Of Law': What
Assignments by Operation of Law. In Canada, the assignment of a contract as part of an asset sale, or the change of control of a party to a contract pursuant to a share sale - situations not normally effected via legal statute or court-ordered proceeding in M&A transactions - will not in and of itself effect an assignment of that contract ...
Anti-Assignment Provisions And Reverse Triangular Mergers
A recent Delaware Court of Chancery decision examined whether a reverse triangular merger ("RTM") qualified as a prohibited assignment by operation of law under Delaware law. In Meso Scale ...
Courts Consider Anti-Assignment Clauses And Reverse Triangular Mergers
On the other hand, I find Meso's arguments as to why language that prohibits "assignments by operation of law or otherwise" should be construed to encompass reverse triangular mergers unpersuasive and its related construction of Section 5.08 to be unreasonable. Meso Scale Diagnostics, LLC v. Roche Diagnostics GmbH, 62 A.3d 62, 88 (Del. Ch. 2013
Assignments: The Basic Law
Ordinarily, the term assignment is limited to the transfer of rights that are intangible, like contractual rights and rights connected with property. Merchants Service Co. v. Small Claims Court, 35 Cal. 2d 109, 113-114 (Cal. 1950). An assignment will generally be permitted under the law unless there is an express prohibition against assignment ...
Can I Assign My Commercial Lease? (Part 2- Assignments By Operation Of Law)
Therefore, where the lease is silent regarding assignments by operation of law, and where there is otherwise no breach of the lease agreement, the landlord probably has no right to object to the de facto transfer of rights and may not unilaterally terminate the lease. In other jurisdictions, the majority view is that, "The fact that the ...
"By Operation of Law" (Including Draft No-Assignment Language)
In Meso Scale Diagnostics, LLC v. Roche Diagnostics GMBH (go here for a PDF copy), the Delaware Court of Chancery held that it's not clear whether for purposes of a no-assignment provision a reverse triangular merger constitutes an assignment "by operation of law." (A reverse triangular merger is when Sub merges into Target.). I'm not going to go into any detail regarding the case, as ...
138. Assignment By Operation Of Law.
Halsbury's Laws Of England / Contract (Volume 22 (2019)) / 4. Consideration and Privity / (2) Privity / (ii) Exceptions to the Doctrine of Privity / a. At Common Law / 138. Assignment by operation of law. This comprehensive encyclopedia of the law covers all parts of Contract.
operation of law
operation of law. A way in which someone gets certain rights (or sometimes responsibilities) automatically under the law without taking action, requiring cooperation from another person, or being the subject of a court order . This situation usually arises from the happening of an event, such as a death, that triggers a change in human affairs ...
Operation of law
Operation of law. The phrase " by operation of law " is a legal term that indicates that a right or liability has been created for a party, irrespective of the intent of that party, because it is dictated by existing legal principles. For example, if a person dies without a will, their heirs are determined by operation of law. Similarly, if a ...
Anti-Assignment Clause Prohibiting Assignment by Operation of Law
When an anti-assignment clause contains language referencing an assignment by operation of law, Delaware courts generally find that the clause applies to mergers in which the contracting company ...
Anti-Assignment Clause Prohibiting Assignment by Operation of Law
Barry Klayman and Mark Felger writing in the Delaware Business Court Insider, discuss a recent decision by the Superior Court of Delaware holding that an anti-assignment clause prohibiting an assignment "by operation of law" without the other party's consent applied to a subsequent merger in which the contracting party was not the surviving entity.
UK
However, the assignment by operation of law in this case was prohibited by the anti-assignment clause and therefore the arbitral Tribunal possessed no jurisdiction to decide the dispute. The tribunal's arbitration award on jurisdiction (which was dealt with as a preliminary issue) was to be varied accordingly. ...
Assignment by Operation of Law Sample Clauses
Sample 1. Assignment by Operation of Law. The Parties acknowledge, agree and accept that this Agreement qualifies as the transfer of an undertaking under section 7:662-666 of the Dutch Civil Code (Burgerlijk Wetboek) ("DCC"). According to section 7:663 DCC, the following actions will occur by operation of law:
Assignment (law)
Assignment (law) Assignment [a] is a legal term used in the context of the laws of contract and of property. In both instances, assignment is the process whereby a person, the assignor, transfers rights or benefits to another, the assignee. [1] An assignment may not transfer a duty, burden or detriment without the express agreement of the assignee.
PDF Family Law Judicial Assignment Change at The Stanley Mosk Courthouse
FAMILY LAW JUDICIAL ASSIGNMENT CHANGE . AT THE STANLEY MOSK COURTHOUSE . Today, the Family Law Division implemented the following change to courtroom operations at the Stanley Mosk Courthouse located at 111 N. Hill St., Los Angeles: • Commissioner Latrice A. G. Byrdsong is now assigned to Department 8 as an additional judicial
Southport-Fort Fisher Ferry operations suspended
SOUTHPORT, N.C. (WECT) - Southport-Fort Fisher Ferry operations are suspended until further notice, according to an announcement from the North Carolina Department of Transportation. "We are currently suspending ferry operations due to mechanical issues. We will alert you when we resume normal ferry operations.
PDF Family Law Trial and Long Cause Evidentiary Hearing Assignment Calendar
an agreement a motion to continue must be properly filed with notice for consideration on a family law, law and motion (request for order) calendar. Please note: Family Code § 2105 requires the final declarations of disclosure to be filed no later than 45 days before the first assigned trial date for matters schedules for final adjudication.
Gardaí visit nail bars and fast-food outlets as part of anti
As part of the operation, some 219 suspects were arrested, mostly across Europe, with 1,221 adult victims and 153 child victims assisted. Some 363 documents were also seized and 276 investigations ...
MTA Bridge and Tunnel Officers, NYPD and Law
Two significant highlights from the weekend operations include arrests by two law enforcement partners, Port Authority Police Department (PAPD) and the NYPD: During Friday's operation on the George Washington Bridge, PAPD police officers' license plate reader system received a hit for a vehicle with a stolen license plate. Investigation ...
FY24 National Initiatives: Law Enforcement Training and Technical
With this solicitation, BJA seeks to fund four national training and technical assistance (TTA) programs to support law enforcement and criminal justice stakeholders Task Force Leadership, Operations and Management (Category 1), Specialized Units TTA (Category 2), Crime Gun Intelligence Center TTA (Category 3) and Police Recruiting, and Retention Among Underrepresented Groups (Category 4).
New York DMV
Operation Prevent is supported by the Governor's Traffic Safety Committee. The committee coordinates traffic safety activities in New York, and it awards federal highway safety grant funds to local, state, and not-for-profit agencies for projects to improve highway safety and reduce deaths and serious injuries due to crashes.

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Anti-Assignment Provisions and Assignments by ‘Operation of Law’: What Do I Have to Do? What Should I Do?

Understanding Anti-Assignment Provisions

Context of M&A Transactions: Asset Purchases and Share Purchases

Assignments by Operation of Law

Difference Between Mergers and Amalgamations

MTA Canada Royalty Corp. v. Compania Minera Pangea, S.A. de C.V.

Practical Considerations

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“By Operation of Law” (Including Draft No-Assignment Language)

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138. Assignment by operation of law.

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