Bewley v. Miller
1975 D.C. App. LEXIS 409, 341 A.2d 428 (1975)
Rule of Law:
Clauses restricting contract assignability are ineffective unless phrased in express, precise language, and a party's acceptance of substitute performance without objection may waive any claim of non-delegability of a contractual duty.
Facts:
- Appellee Miller entered into a standard 'Student Enrollment Agreement' in March 1973 with the Fred Astaire Dance Studio, which was then operated by James Hash.
- The contract required Miller to take 200 hours of dancing lessons within one year for a total cost of $1,430, with $1,100 to be paid in 11 equal monthly installments.
- The agreement included clauses stating that 'the studio obligates itself to furnish me with a qualified instructor and facilities' and that 'this agreement is made solely between myself and the licensee' and that 'neither Fred Astaire nor any person or corporation other than the licensee and myself shall be bound by this agreement.'
- In August 1973, Hash sold his license to operate the Studio to appellant (Fred Astaire Dance Studios) and, as an integral part of the sale, assigned all pending contracts for instruction, including Miller's, to appellant.
- Miller accepted lessons from the appellant, the new licensee, without objection to the change, and continued making payments pursuant to the contract until December 1973.
- Miller stopped making payments in December 1973, having completed 180¼ hours of instruction, with an unpaid contract balance of $600.
- The one-year period within which Miller was obligated to complete his lessons expired on March 30, 1974.
Procedural Posture:
- Appellant Fred Astaire Dance Studios sued appellee Miller in the Small Claims and Conciliation Branch, claiming an unpaid contract balance.
- The trial court, sua sponte, raised the issue of whether appellant, as the assignee, was precluded from suing on the contract by what it considered a nonassignability clause.
- The trial court granted appellee's oral motion to dismiss on the ground that the agreement only bound the original licensee, Hash, and Miller.
- Appellant filed an application for allowance of appeal, which the District of Columbia Court of Appeals granted.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a contract clause stating that no party other than the original licensee and the student 'shall be bound by this agreement' preclude the assignment of a claim for money due under the contract, or prevent the delegation of performance, particularly when the student accepts the substitute performance without protest?
Opinions:
Majority - HARRIS, Associate Judge
No, such a clause does not preclude the assignment of a claim for money or prevent the delegation of performance, especially when substitute performance is accepted without protest. The court found that the contractual clause, which merely stated that no party other than the licensee and the student 'shall be bound by this agreement,' was not phrased in the express, precise language required to restrict the assignment of an otherwise assignable contract or a claim for money. The court further held that a contention that the assignor's obligation to provide dancing lessons was personal and therefore non-delegable was invalid for two reasons. First, the contract itself stated that 'the studio obligates itself to furnish me with a qualified instructor and facilities for taking lessons,' making a promise of personal performance by the assignor untenable. Second, and more importantly, Miller accepted performance by the new licensee without protest, continuing lessons and payments for several months, which constituted a waiver of any claim of non-delegability of the original obligor’s duty. The court also considered the practical aspect that assignments of accounts receivable are common and necessary elements of the sale of a going business.
Analysis:
This case significantly clarifies the interpretation of contractual anti-assignment clauses, requiring strict construction and explicit language to be effective. It establishes that vague phrasing purporting to limit who is 'bound' by an agreement is insufficient to prevent the assignment of rights, particularly claims for money due. Furthermore, the decision emphasizes the principle of waiver, demonstrating that a party's acceptance of substitute performance without objection can negate any claim that a duty was non-delegable, thereby supporting the free flow of commercial transactions and business transfers. This ruling is crucial for businesses selling assets that include ongoing contracts and for understanding the limitations of general anti-assignment language.
