How to handle assignments in commercial contracts
10/11/2016 | Author: TAR Legal Staff
Has anyone instructed you to add “and/or assigns” after the buyer’s name in the Parties Paragraph of commercial real estate contracts? That’s not the correct way to proceed when using TAR’s commercial contracts for improved and unimproved properties (TAR 1801, TAR 1802).
Paragraph 22E addresses assignments. It provides two checkboxes—one that states that the buyer may assign the contract and the other to indicate that the buyer may not. This paragraph also provides that if the buyer assigns the contract, the buyer will be relieved of any future liability under the contract if the assignee assumes the buyer’s obligations in writing.
TAR’s Commercial Contract Assignment of Buyer’s Interest (TAR 1943) should be used to capture the details of an assignment in writing.
Reprinted from the September/October 2016 issue of Texas REALTOR®. Get even more legal content, including a frequently asked hotline question, an errors and omissions insurance tip, and a quiz on the Code of Ethics in the latest issue of the magazine.
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