This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
A contract for the construction of a building has been held to be personal in character so that it can not be assigned to one who is to perform such contract.1 As a matter of fact the personality of the building contractor is generally regarded as material. The contract is not always given to the lowest bidder, even by private property owners. The skill and integrity of a contractor who has not put in the lowest bid are often thought to be worth more than the difference in bids. The theory that such a contract is so personal that it can not be assigned as to performance conforms to the actual understanding of persons who let such contracts.2 At the same time, in the absence of a specific covenant to the contrary, the contractor may perform through subcontractors,3 and he may employ another person to supervise the construction.4 There is, however, no inconsistency in these different views. It is not ordinarily intended, in the absence of specific covenants, that the contractor must do the work himself. It is his ability and honesty as the general contractor and not his personal skill in physical performance of the contract that the property owner is seeking to obtain.
5 Board of Education v. State Board of Education, 81 N. J. L. 211, 81 Atl. 163 [affirmed, Glazer v. Flemington, 85 N. J. L. 384, 91 Atl. 1068].
6 Griffith v. Publishing Co. , 1 Ch. 21; Foster v. Callaghan, 248 Fed. 944; Wooster v. Crane, 73 N. J. Eq. 22, 66 Atl. 1093. (Even if the promisee is a corporation and the assignee is a corporation formed by the stockholders of the first corporation under the laws of another state.)
7 Ellis v. State, 4 Ind. 1; Campbell v. Sumner Co., 64 Kan. 376, 67 Pac. 866.
8 Parker v. Evening News Publ. Co.. 54 Fla. 544, 45 So. 309.
9 Edison v. Babka, 111 Mich. 235, 69 N. W. 499.
1 Schlesinger v. Forest Products Co., 78 N. J. L. 637, 30 L. R. A. (N.S.) 347, 76 Atl. 1024.
"The injustice of permitting an assignment of a contract for personal services, for the painting of a picture for a partnership, is obvious. A corn-tract for the sale of goods to be manufactured stands on similar grounds where the vendee relies upon the skill and experience of the manufacturer, as well as upon the implied warranty of quality. No man who has employed a tailor to make a suit of clothes ought to be compelled to accept a suit made by the tailor's assignee * * *. In the present case, Gaffinel relied in fact upon Freeman's personal performance of the contract, and was careful to stipulate that the staves should be hand-finished by European workmen. We think he was not compelled to accept performance from a corporation to whom it had been assigned." Schlesinger v. Forest Products Co., 78 N. J. L. 637, 30 L. R. A. (N.S.) 347, 76 Atl. 1024.
2Schultz v. Johnson, 44 Ky. (5 B. Mon.) 497. A contract by A to grow trees and to deliver them to B may be assigned. Parsons v. Woodward, 22 N. J. L. 196.
1Johnson v. Vickers, 139 Wis. 145, 21 L. R. A. (N.S.) 359, 120 N. W. 837.
A contract to install an electric system under the personal supervision of the contractor,5 or to furnish an electric system, including switchboards for a battleship,6 or to design, manufacture and install fixtures in a store,7 can not be assigned. In accordance with these general principles a public contract has been held to be assignable, where by statute it must be let to the lowest bidder, without conferring any discretion upon the public corporation to reject the lowest bid in favor of a higher bid of a more reliable bidder.8 If the recognition of the assignment will operate as a discharge of a surety on the bond of the original contractor, the contract is nonassignable.9
2 "This contract obligated the Industrial Construction Company to build and equip a canning factory according to specifications attached to the contract that seem to be complete as to details. The performance of the work undoubtedly required skill and experience, and upon its proper execution, the success of the enterprise might well depend. The assignees were wholly inexperienced in constructing plants of this character, while the assignor apparently followed the business of so doing. This contract manifestly imposed a liability upon the assignor of the plaintiffs, and involved a relation of personal confidence which the subscribers must have intended would be exercised by the party in whom they confided. In the construction of a complex plant, subscribers, having no knowledge themselves as to how such a plant should be constructed, would naturally prefer to make their contract with a party having the requisite knowledge and experience rather than with persons having neither. Good business judgment would dictate that such a course should be pursued. They had the right to select the party with whom they would deal, and when the selection was made and the contract was executed, there could be no substitution of contractors in the case before us without the assent of the subscribers. The authorities are quite uniform in holding that such a contract is not assignable by the contractor without the consent of the other party thereto." Johnson v. Vickers, 130 Wis. 146, 21 L. R. A. (N.S.) 369, 120 N. W. 837.
3Neeley v. Searight, 113 Ind. 316, 15 N. £. 606; Drumheller v. American Surety Co., 30 Wash. 630, 71 Pac. 25.
4 Council v. Teal, 122 Ga. 61, 49 S. E. 806.
5Swarts v. Narragansett Electric Lighting Co., 26 R. I. 388, 69 Atl. 77.
6 Walker Electric Co. v. New York Shipbuilding Co., 241 Fed. 669, 164 C. C. A. 346.