III. — 5:118 Effect of initial invalidity, subsequent avoidance, withdrawal, termination and revocation

This Article applies where the assignee's entitlement for the purposes of III. — 5:104 (Basic requirements) paragraph (1)(d) arises from a contract or other juridical act (the underlying contract or other juridical act) whether or not it is followed by a separate act of assignment for the purposes of paragraph (1)(e) of that Article.

Where the underlying contract or other juridical act is void from the beginning, no assignment takes place.

Where, after an assignment has taken place, the underlying contract or other juridical act is avoided under Book II, Chapter 7, the right is treated as never having passed to the assignee (retroactive effect on assignment).

Where, after an assignment has taken place, the underlying contract or other juridical act is withdrawn in the sense of Book II, Chapter 5, or the contractual relationship is terminated under any rule of Book III, or a donation is revoked in the sense of Book IV. H Chapter 4, there is no retroactive effect on the assignment.

This Article does not affect any right to recover based on other provisions of these model rules.