STATUTE OVERRIDES CONTRACTUAL PROHIBITION ON ASSIGNMENT

Co-operative Group (CWS) Ltd v Stansell Ltd [2006] EWCA Civ 538; [2006] BLR 233

In Co-operative Group (CWS) Ltd v Stansell Ltd [2006] EWCA Civ 538; [2006] BLR 233 the Court of Appeal held that s51(1) of the Industrial and Provident Societies Act 1965 overrode a contractual prohibition on assignment. Thus it held that a resolution of a society registered under the Act to transfer the whole of its property and assets and all its engagements to a transferee society was effective to transfer contractual rights to the transferee despite the fact that the contract concluded between the transferor society and the defendant contractor contained a provision which prohibited the assignment of the contract without the consent of the contractor (which consent had not been obtained). The defendant contractor was therefore held not to be entitled to dispute the transferee’s right to bring a claim against it under the contract.