Legal Memorandum: Obligations of Subsequent Assignees to a Contract

Issue: Under Florida law, is a holding company bound by the obligationsof its predecessors-in-interest?

           A subsequent assignee need not be one of the original contracting parties to be bound by an agreement; one can be bound to an original agreement by subsequent agreements or assignments from the original parties or their successors that indicates such intent.  See Jenkins v. City Ice & Fuel Co., 118 Fla. 795, 160 So. 215, 217 (1935).  See Fred S. Conrad Constr. Co.  v. Exchange Bank, 178 So. 2d 217, 219 (Fla. 5th Dist. Ct. App. 1965); see also 6A C.J.S. Assignments § 102 (1975) (“Subsequent or remote assignees generally acquire all the rights of the assignee under the original assignment and no more . . . .  Successive or remote assignees . . . take subject to the equities existing between the original assignor and his assignee as well as to equities existing between the original assignor and [the other original party].”).

The merger-by-deed doctrine provides that generally a preliminary agreement is merged into a deed, and the latter controls with respect to the seller’s warranties of sale with respect to real property.  See Volunteer Sec. Co. v. Dowl, 159 Fla. 767, 33 So. 2d 150 (1947); Stephan v. Brown, 233 So. 2d 140 (Fla. 2d Dist. Ct. App. 1970); Bennett v. Behring Corp., 466 F. Supp. 689 (S.D. Fla. 1979)). 

However, the merger doctrine “does not apply if there is uncertainty as to the extent of the undertaking.”  Jacksonville Paper Co. […]