Assignment of rights and delegation of duties under the UCC · Next Generation Bar Exam

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CONTRACTS

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Bramble Industries and Cobalt Retail entered into a contract under which Bramble agreed to sell and deliver 20,000 branded ceramic mugs to Cobalt's central warehouse. The contract states: "This agreement is personal to Bramble. Neither this agreement nor any right or duty under it may be assigned or delegated by Bramble without Cobalt's prior written consent." Bramble manufactured and delivered all 20,000 mugs on time, and Cobalt's payment obligation is now due. To obtain working capital, Bramble assigned to Northgate Bank "all of Bramble's rights under the contract to receive payment for the delivered mugs." Bramble notified Cobalt, and Northgate demanded payment. Cobalt refused, arguing that the assignment violated the anti-assignment clause. The governing statute, UCC § 2-210(2), provides in relevant part: "Unless otherwise agreed, all rights of either seller or buyer can be assigned except where the assignment would materially change the duty of the other party, or increase materially the burden or risk imposed on him by his contract, or impair materially his chance of obtaining return performance. A right to damages for breach of the whole contract or a right arising out of the assignor's due performance of his entire obligation can be assigned despite agreement otherwise."

Who is correct as to Northgate's right to collect the payment?

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