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I have had an ongoing contract with a non-US company, let's call it A. Now a US company B has purchased the A's asset — a software product I have been working on for A. A is now telling me that B has purchased the contract with me as well, and therefore I should now bill B and not A.

A quote from here says:

contracts held by a target, and acquired by a purchaser, will often require the consent of the counterparty in the context of an asset deal

B has not yet approached me in regards to the contract. Am I right assuming that I cannot therefore bill B yet and should continue billing A until they negotiate signing of my contract with B?

  • The legal question is whether your contract is "assignable" or not, which isn't always an easy legal question to answer and can be fact intensive. – ohwilleke Aug 31 '17 at 22:25
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You have a contract with A. You do not have a contract with B.

B can replace A in the contract if A, B and you all agree - this is called novation. It is possible that the contract has a clause allowing novation in which case you agreed to be novated when signing the contract.

Alternatively, A can assign their rights under the contract to B without your permission, however, A still remains liable for their obligations under the contract i.e. B is entitled to the benefit of your work but A has to pay you.

  • With the caveat that some contracts are assignable (e.g. landlord rights, most creditor's rights), while others are not (e.g. contracts to perform personal services or many real estate tenancies or duties to pay money to a creditor). Some assignable contracts (e.g. negotiable instruments assigned to a holder in due course) even give greater rights to the assignee than the assignor had. – ohwilleke Sep 1 '17 at 7:04

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