This week I revisited my 2012 post on rethinking the “no assignment” provision (here). It reminded me that there’s a general point buried in that post. Here it is:
It’s commonplace for contracts to contain something along the following lines: Neither party may assign this agreement without the consent of the other party. In Negotiating and Drafting Contract Boilerplate (Tina Stark ed. 2003), Tina Stark says that it makes more sense to refer to assigning rights and delegating obligations: “An assignment is a transfer of a right to performance to a third party,” whereas “delegation is the appointment by one person of another to perform either a duty or a condition to the other party’s performance.” So her recommended language includes No party may assign and No party may delegate.
By contrast, I use only the verb transfer with respect to both rights and obligations. That’s because using assignment with respect to rights and delegation with respect to obligations might serve some purpose for scholarship and judicial opinions, but it serves no purpose for contracts, other than to add unnecessary fussiness.
That’s because if I say I’m transferring rights and transferring obligations, there’s no question that that’s what I’m transferring. I’m in effect assigning those rights and delegating those obligations without my having to use the words assign and delegate. To hold otherwise would be to require that the drafter wield magic words—in other words, code. That’s not the way courts work.
It’s appropriate that contract language be as simple as possible—contracts are complicated enough as it is without our adding unnecessary complexity.
By using transfer, am I dumbing contracts down? No—what’s dumb is insisting on distinctions that have no practical significance.
This is hardly an isolated example. Traditional contract language contains other terms of art used in a way that’s pointless or downright confusing. Why say attorn when you can say consent? (See MSCD 13.57.) Why say that an amendment “does not serve to effect a novation” when you could say that it “will not result in any of the Obligations being replaced.” (See MSCD 13.479–.480.) Why say represents and warrants when you can say states? (See this article.) I could go on.
Continued use of unnecessary terms of art is a function not of their utility but of inertia.