Assigning a Contract and Any Accompanying Fraud Claims—Key Language for the Assignment

Fraud claims can be assigned, but the assignment of a contract does not automatically incorporate and include fraud claims relating to that contract. Contract rights are distinct from tort-related claims, such as fraud or misrepresentation. Courts look to the language of the assignment and the parties’ intent, and as a new Appellate Division, First Department, decision shows, circumstances surrounding the assignment when the language is not so precise. (BH 336 Partners LLC v Sentinel Real Estate Corp., 2026 NY Slip Op 00305 (1^st Dep’t Decided Jan. 22, 2026))

As explained below, the main takeaway is that adding simple language in the assignment can avoid disputes (and more importantly, costly and time-consuming litigation) over the issue.

The Need for Transactional Lawyers to Understand Case Developments

I often comment that transactional, contract-writing lawyers need to be mindful and aware of case law developments on contractual phraseology and concepts, lest they risk later adverse court determinations contrary to what they intended to implement in the subject contracts. As I have observed:

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