If prior to an attempted revocation, an assignee is involved in the following situation, then a gratuitous assignment is rendered irrevocable. Choose two answers.
A. The assignee is sued by the obligor.
B. The assignee obtains a mortgage from a bank based on the interest assigned to the assignee.
C. The assignee receives payment of the claim from the obligor.
D. The assignee obtains a judgment against the obligor.
Answer (2)
A gratuitous assignment can become irrevocable if the assignee obtains a mortgage based on the assigned interest or obtains a judgment against the obligor. Both actions create a legal stake for the assignee, preventing revocation. Thus, the correct options are B and D.
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In the context of contract law, a gratuitous assignment refers to the transfer of rights or interests in a contract without receiving anything in return. Such assignments are generally revocable until certain actions or events occur, making them irrevocable.
For a gratuitous assignment to become irrevocable prior to any attempted revocation, certain conditions need to be met that suggest the assignee has a vested interest in the assignment.
Here are the options provided:
The assignee is sued by the obligor. This option would not typically render the assignment irrevocable, as being sued does not inherently show reliance or a vested interest based on the assignment itself.
The assignee obtains a mortgage from a bank based on the interest assigned to the assignee. This action indicates that the assignee has relied on the assignment to secure a mortgage, introducing reliance or the taking on of obligations based on this assignment. This can make the assignment irrevocable as it shows that the assignee has changed their position based on the assignment.
The assignee receives payment of the claim from the obligor. Payment acceptance signifies that the assignment has been acted upon, thereby solidifying the irrevocability because the benefit has already been received by the assignee.
The assignee obtains a judgment against the obligor. This indicates legal enforcement of the assignee's right, demonstrating a vested interest and solidifying the assignment, making it irrevocable.
Based on the above reasoning, the two actions that render a gratuitous assignment irrevocable prior to revocation are:
The assignee obtains a mortgage from a bank based on the interest assigned to the assignee.
The assignee receives payment of the claim from the obligor.
