Real estate contracts, like most other contracts, are generally assignable unless (i) assignment is prohibited by the contract, (ii) assignment would materially alter the duties of or increase the risk to the non-assigning party, particularly where the skill, character, or credit of the assigning party is important, or (iii) the assignment is prohibited by law or public policy. Lancaster v. Greer, 572 S.W.2d 787, 789 (Tex. Civ. App. -- Tyler 1978, writ ref'd n.r.e.); Zale Corp. v. Decorama, 470 S.W.2d 406, 408 (Tex. Civ. App. -- Waco 1971, writ ref'd n.r.e.).
In our opinion, the character or credit of the buyer is usually important to a seller. A buyer should not presume that they can freely assign, and they risk a lawsuit by a seller if they do so without written consent, either from the seller or in the contract.
Putting “and/or assigns” following the buyer’s name in the contract is the quick and dirty method to expressly permit the assignment of the contract by a buyer. Is the Seller released after assignment ?
Probably not unless the contract expressly says so. However it is not totally clear – a good assignment clause which makes this issue clear would be better. In these instances, both assignor and assignee are probably jointly and severally liable to the seller.
When it is time to assign, an assignment of contract form can usually be provided by the title company or their counsel. This form is signed only by original buyer (the “assignor”) and the new buyer (“assignee”). A copy is then provided to title company, all brokers, and the seller. The assignee generally / usually agrees to indemnify and hold the assignor harmless from breach of contract claims that arise from conduct post-assignment. The assignor generally / usually agrees to indemnify and hold the assignee harmless from breach of contract claims that arise from conduct pre-assignment.