Will Buyer's Nominee or And/or assign protect me? - Posted by Adrienne

Posted by Redline on April 23, 1999 at 12:54:03:

This discussion has taken place several times here, and some are of the opinion (especially when there’s owner financing involved) that you should get a separate document signed that basically states that the seller is accepting the new buyer (you’ll have to provide docs on your new buyer) and understands he will be releasing you from this transaction. This is further protection.


Will Buyer’s Nominee or And/or assign protect me? - Posted by Adrienne

Posted by Adrienne on April 23, 1999 at 11:22:05:

I asked about my liability in an assignment of a real estate
sales contract and wanted to continue the disscussion. My assignment contract shifts the responsibility to the assignee. Some of the replies to my post said that the seller may still be able to come after me if the assignee
does not settle as agreed.

My real estate sales contract has Buyer’s Nominee in the contrac5t and I always put and/or assigns by my name where ever it may appear in the contract. Is this adequate protection or should I get the seller to sign a consent form(or add as a clause on the addendum).

Any and all comments appreciated my friends.

Sincerely Yours,


Re: Will Buyer’s Nominee or And/or assign protect me? - Posted by SCook85

Posted by SCook85 on April 25, 1999 at 11:38:33:

The advice given by all is very good. It is very important that you know, an assignment agreement between you and your buyer does not relieve you of liability to the seller regardless of what is in your assignment agreement. You signed the contract, you are responsible for settling. If you do get the seller to accept in writing that you are doing an assignment and being relieved of all liability then you can get off the hook, but it will not happen any other way.
Sean also makes a good point when referring to liquidated damages. Take his advice and you can limit your liability to your earnest money deposit.


My opinion: Liquidated Damages - Posted by Sean

Posted by Sean on April 25, 1999 at 24:07:11:

My opinion simply is that you should rely heavily on your liquidated damages clause. Example: You put down a deposit of $500.00 then assign the contract to someone else for $3,000.00 profit but then the guy doesn’t perform.

The most the seller can do is keep the deposit if you have a liquidated damages clause. I even supplement this in an addendum by saying that even if no deposit is paid Buyer may cancel the contract without cause by payment of $500.00 as liquidated damages.

Re: Will Buyer’s Nominee or And/or assign protect me? - Posted by Russ, IL

Posted by Russ, IL on April 24, 1999 at 08:34:48:

When I approached my attorney with my first assignment contract he was very concerned about using “and/or assigns”. He felt that no matter what my buyer signed his name to, if he did’nt follow through with his end of the deal, my seller would definitly try to come after me. Having my name or my trusts name appear on a sale agreement left me open to problems if I assigned it. Now we always do simultaneous closings. One: It keeps me from worrying about my seller coming after me. Two: My buyer doesn’t know what my profit is. Three: Not having “and/or assigns” in my contracts helps me get more of my offers accepted because it’s one less contingency that my seller needs to be concerned about.

There’s my two cents. I hope it is of some help.
Good Luck

Re: Will Buyer’s Nominee or And/or assign protect me? - Posted by Stacy (AZ)

Posted by Stacy (AZ) on April 23, 1999 at 11:54:45:

Just stating within the contract that the sale can be assigned is not enough protection. If your buyer does not perform, the seller can come after you. I state in my purchase contract that the contract is assignable, and that once assigned the seller holds me harmless.

I also have an assignment contract between me and the assignee that “shifts the responsibility to the assignee”, as you stated. Within this assignment contract I think it’s important to state that the buyer “holds you harmless” if the deal goes south.

Doesn’t mean the seller won’t try to come after me, but I’ve got proof that he agreed to this clause by virtue of the signed contract. It’s very important that you discuss what the clause means at the signing.

My take…


Re: Will Buyer’s Nominee or And/or assign protect me? - Posted by Stacy (AZ)

Posted by Stacy (AZ) on April 24, 1999 at 11:25:20:


I think this careful approach is a good idea when you don’t know or trust your buyer. However, if you have done deals in the past with a wholesale buyer (rehabber) and you are confident he will perform, an assignment is fine, in my opinion. Simul. closings are typically more expensive.

By the way, in AZ every contract is assignable, whether or not the “and/or assigns” appears in the contract, unless specifically stated in the contract. I really think this is true in many, if not all states, although I certainly haven’t researched it (beyond getting the opinions of five attorneys). Even LeGrand said this at the CREOnline convention. Of course, assigning a contract does NOT relieve the flipper from liability unless the seller agrees to hold him harmless, in writing. Being especially cautious when seller financing is involved is prudent, as my friend JPiper has mentioned.

Anyway, just my personal take…