Which of the following could be a reason for an assignment of rights to be invalid?

Study for the Business Senior Exam. Use flashcards and multiple-choice questions with hints and explanations. Prepare confidently!

The correct answer highlights a significant principle in contract law regarding assignments of rights. An assignment of rights can be considered invalid if it would materially increase the risk to the obligor. The obligor is the party who has the duty to perform under the contract, and if a new party is introduced through the assignment, it could alter the risk dynamics or obligations in a way that the obligor did not originally consent to. This could occur, for example, if the assignee has different capabilities or reliability than the original obligor anticipated when entering into the contract. In essence, maintaining the original risk profile for all parties involved is critical for the validity of an assignment.

The potential risks and liabilities for the obligor must remain consistent; if the assignment would create a fundamentally different situation, it can lead to disputes and challenges regarding the enforceability of the assignment. Thus, protecting the obligor from unexpected changes in risk is a key reason assignments may be disallowed.

The other options present various scenarios that do not inherently invalidate an assignment. Disagreements on contract terms between parties might affect negotiations or the execution of a contract but do not directly affect the validity of the assignment itself. Similarly, the fact that a contract does not benefit the assignor does not impact

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