Allhusen v. Caristo Construction Corporation

New York Court of Appeals · 1952 · Contracts

303 N.Y. 446 (1952)

Updated July 26, 2026

ContractsAssignmentAnti-assignment clausesanti-assignment clausevoid assignmentmoney due under contractfreedom to contractclear language

Facts

Defendant general contractor entered into subcontracts with Kroo Painting Company for painting work in New York City public schools. Each subcontract stated that any assignment by Kroo of the contract, any interest in it, or any money due or to become due under it, without defendant's written consent, 'shall be void.' Kroo later assigned rights to money due and to become due under the contracts to Marine Midland Trust Company, which then assigned those rights to plaintiff, but no written consent was obtained from defendant. The contracts themselves were not assigned, and no issue of delegation of contractual duties was involved.

Issue

Whether a contract clause providing that any assignment of the contract, any interest in it, or any money due or to become due under it without the obligor's written consent 'shall be void' is effective to bar an assignee from recovering the assigned contract proceeds.

Rule

Contract rights, including claims for money due under a contract, are generally assignable unless the contract creating the right uses clear, definite, and appropriate language prohibiting assignment. When the parties use the plainest words to provide that an assignment shall be 'void,' the clause is not merely a personal covenant not to assign but an effective restriction rendering the attempted assignment void as against the obligor.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Cleveland, North Shore Interiors agreed to install fixtures for Lakefront Build Group. Their subcontract stated: "Any assignment of this subcontract, any interest therein, or any money due or to become due hereunder without the written consent of Lakefront Build Group shall be void." North Shore later assigned its right to payment to Harbor Ledger Finance without obtaining written consent, and Harbor sued for the unpaid balance after the work was completed.

Is Harbor likely to recover from Lakefront Build Group as assignee?

Explanation. The assignee should not recover. The governing rule is that contract rights are generally assignable unless the contract uses clear, definite, and appropriate language prohibiting assignment. Where the contract states that an assignment of the contract, any interest in it, or any money due or to become due without written consent "shall be void," the clause is an effective restriction, not merely a personal covenant not to assign. Here, the attempted assignment of payment rights is ineffective against the obligor.