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Evening News Association v. Peterson

    Brief Fact Summary.

    Plaintiff sued, seeking a declaration that Defendant’s contract with the previous news station was assignable without Defendant’s consent.

    Synopsis of Rule of Law.

    A personal services contract is not assignable if the performance required by the party’s duty is a personal performance and an attempt to perform by an assigned-to, substituted person would not discharge the party’s underlying duty.

    Facts.

    Gordon Peterson (Defendant) was a news anchorman for WDVM-TV (Channel 9), under contract with Channel 9’s owner, Post-Newsweek Stations, Inc. (Post-Newsweek). The contract did not contain a clause authorizing or prohibiting assignment of the contract. The contract did, however, contain a merger clause stating that the entire agreement of the parties was contained in the contract. Post-Newsweek sold Channel 9 to Evening News Association (Plaintiff) while Defendant was still under contract. Subsequently, Defendant resigned from Channel 9—now owned by Plaintiff—while he was still under the same contract. Plaintiff sued, seeking a declaration that Defendant’s contract with Post-Newsweek was assignable by Post-Newsweek without Defendant’s consent. Defendant argued that the contract was for his personal services and thus not assignable.

    Issue.

    Whether a personal services contract is assignable if the performance required by the party’s duty is such that an attempt to perform by an assigned-to, substituted person would discharge the party’s underlying duty.

    Held.

    Yes. The court rules in favor of Plaintiff.A personal services contract is not assignable if the performance required by the party’s duty is a personal performance and an attempt to perform by an assigned-to, substituted person would not discharge the party’s underlying duty.

    Discussion.

    Contracts are generally assignable, subject to certain exceptions. One such exception is certain personal services contracts. A contract is not assignable under the personal services exception where the performance required by the party’s duty is a personal performance and an attempt to perform by a substituted person would not discharge the party’s underlying duty. In other words, performance under the contract can only be done by the party to the contract. This exception to the general rule allowing assignment does not apply in this case. Essentially, Defendant is looking at the contractual relationship backwards. The pertinent issue is not whether Defendant’s services are delegable, but whether Post-Newsweek’s right to receive Defendant’s services is assignable. In other words, for Defendant’s argument to win the day, Post-Newsweek would have had to perform some sort of personal service under the contract; not the other way around. Post-Newsweek did not contract to perform any personal services for Defendant. Post-Newsweek only contracted to pay him, a performance under the contract that Plaintiff is equally capable of performing. Moreover, under the management of Plaintiff, Defendant is still a newscaster for Channel 9, undertaking exactly the same duties as he did for Post-Newsweek. His performance under the contract was not materially altered by Plaintiff’s acquisition of Channel 9. As a result of the foregoing, the court finds that the contract was assignable and validly assigned by Post-Newsweek. Plaintiff’s performance discharges Post-Newsweek’s duty under the original contract. 


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