Business and Legal Insights

Introduction: The Provision That Decides Who Holds the Contract

Every commercial contract answers, expressly or by default, a deceptively simple question: if one party sells its business, merges, or restructures, does the deal travel with it? Assignment and delegation provisions supply that answer. They determine whether contractual rights can be transferred to a third party (assignment) and whether contractual duties can be handed off to someone else to perform (delegation). Handled carelessly, these provisions become the reason a valuable right — e.g., a non-compete, a supply commitment, a stream of payments — evaporates in the very transaction meant to capture its value.

Nowhere is that risk sharper than in employment agreements containing restrictive covenants. As the Florida cases below illustrate, a buyer who acquires a business and its goodwill may find that it cannot enforce the seller’s non-compete agreements against departing employees, simply because the drafters never said so clearly. The lesson tracks the theme of this blog series: precision in drafting is risk allocation, and ambiguity is an invitation to litigate.

The General Rule: Rights Are Assignable and Duties Are Delegable, With Exceptions

Florida follows the general rule that contractual rights are freely assignable. That default gives way in three recurring situations: where the contract itself prohibits assignment, where assignment would violate a statute or public policy, and where the contract is one for personal services or personal confidence. The last exception matters most in the employment context. A contract for personal services is not assignable absent consent, and a covenant restricting competition after such a contract ends is unenforceable by an assignee “unless the party who is burdened by the restriction agrees.” Strehlow v. Legend Equities Corp., 727 So. 2d 1076, 1077 (Fla. 4th DCA 1999).

Delegation of duties is governed by a related principle: a party may not delegate performance that the counterparty had a substantial interest in receiving from that specific party. Assignment moves the benefit; delegation moves the burden. Well-drafted provisions address both, and say plainly which transfers are permitted, which require consent, and which are barred.

Restrictive Covenants: The Statutory Overlay

For non-compete and non-solicitation covenants, Florida layers a statutory requirement on top of ordinary assignment law. Section 542.335(1)(f), Florida Statutes, governs agreements entered into after July 1, 1996, and provides that a court shall not refuse enforcement on the ground that the person seeking it is an assignee or successor, “provided . . . the restrictive covenant expressly authorized enforcement by a party’s assignee or successor.” § 542.335(1)(f)2., Fla. Stat. (2025). This was a deliberate change from the predecessor statute, section 542.33, under which a non-compete could be assigned only with the employee’s consent. See DePuy Orthopaedics, Inc. v. Waxman, 95 So. 3d 928, 936 (Fla. 1st DCA 2012). The operative word in the statute is “expressly.” A successor cannot inherit a restrictive covenant by implication or by virtue of the sale alone. The contract must authorize assignee enforcement on its face. Three Florida decisions show where that line falls.

When Assignment Fails: Marx and Strehlow

In Marx v. Clear Channel Broadcasting, Inc., 887 So. 2d 405 (Fla. 4th DCA 2004), a radio personality’s employment agreement with the prior station owner contained a post-employment non-compete and a three-sentence assignment provision. The first sentence bound the parties’ successors and assigns; the second provided that, upon a sale, the agreement would bind and inure only to the employee’s benefit; and the third stated that “[n]o party . . . may assign its rights or obligations under this Agreement.” Id. at 406. Reading the sentences sequentially and giving them their plain meaning, the court held that the parties meant that “no executory benefit under the agreement may be assigned and that only the original parties may enforce any vested benefits.” Id. at 407. The non-compete was therefore personal to the original employer and could not be transferred in the sale. Id. Because the agreement did not expressly authorize enforcement by an assignee, the successor could not enforce it “under either statute.” Id. at 408. The court also rejected the successor’s attempt to justify interfering with the employee’s job prospects on a claimed good-faith belief that the clause was ambiguous, noting the enduring policy in favor of competition. Id.

Strehlow reaches the same destination by a different route. There, sales representatives had signed contracts containing non-solicitation clauses years earlier, while working for a different company; those contracts were assigned when the appellee bought the business, but the representatives never consented. Strehlow, 727 So. 2d at 1077. Applying the personal-services rule, the court reversed a temporary injunction, holding the covenants unenforceable by the assignee absent the burdened parties’ agreement. Id. Together, Marx and Strehlow mark the two classic failure modes: contractual language that bars or fails to authorize assignment, and personal-services covenants transferred without consent.

When Assignment Succeeds: DePuy

DePuy Orthopaedics, Inc. v. Waxman shows the same statute working in the enforcing party’s favor. DePuy sold orthopedic products through an independent distributor, Joint Venture, whose sales representatives signed two-year non-compete agreements. Each agreement’s assignment paragraph stated, “[Joint Venture’s] rights and obligations under this Agreement shall inure to the benefit of and be binding upon [Joint Venture’s] assigns and successors,” followed by a sentence barring the employee from assigning his obligations. DePuy, 95 So. 3d at 931–32. When Joint Venture ceased distributing for DePuy, it assigned its intangible assets — “all intellectual property, goodwill, customer lists and the like” — and DePuy retained the sole right to enforce the covenants. Id. at 932.

The court in DePuy held that the employee-facing restriction did not limit the employer’s right to assign, and that the “shall inure” language, coupled with the transfer of goodwill and the express retention of enforcement rights, effectively assigned the covenants to DePuy. Id. at 934. Critically, it held that a general assignment clause satisfies section 542.335(1)(f)’s “expressly authorized” requirement, reasoning that “an unqualified assignment transfers to the assignee all the interests and rights of the assignor in and to the thing assigned.” Id. at 937–38. Because the employment agreements were terminable at will, continued employment by the assignee was not a prerequisite to a valid assignment. Id. at 934. Having found the covenants enforceable, the court concluded DePuy had established a legitimate business interest and the statutory presumption of irreparable injury, and it reversed and remanded for entry of a temporary injunction. Id. at 938–40. The dissent in DePuy would have held that a general assignment clause is not enough — that the employee must be specifically informed of the right to assign the covenant — a reminder that the sufficiency of general language is not free from debate. Id. at 940–42 (Wolf, J., dissenting).

Consent-Based Assignment Clauses 

Many commercial contracts neither permit nor prohibit assignment outright but instead condition it on the counterparty’s consent, often adding that consent “shall not be unreasonably withheld.” Such clauses trade a bright-line rule for a standard, and they invite disputes over what “reasonable” means in context. Drafters who use such clauses should define the criteria that govern consent — financial qualifications of the proposed assignee, permitted uses, and the like — so that the reasonableness of a refusal is measured against agreed benchmarks rather than litigated after the fact. Silence on standards does not eliminate the obligation to act in good faith — it merely defers the fight to a courtroom.

Practical Drafting Tips

• State the rule for both rights and duties. Address assignment of rights and delegation of duties separately, and specify whether each is freely permitted, permitted with consent, or prohibited.
• For restrictive covenants, authorize assignee enforcement expressly. Do not rely on a general “successors and assigns” clause alone. Say, within or as to the covenant itself, that it may be enforced by the employer’s assignees and successors. DePuy upheld general language, but the DePuy dissent and Marx show why explicit covenant-specific language is the safer course.
• Define consent conditions. If assignment requires consent, define the standards for granting or withholding it and any deadline for responding.
• Coordinate the sale documents. As DePuy illustrates, transferring goodwill and customer lists and expressly retaining enforcement rights in the transaction documents reinforces the assignment. Conflicting or piecemeal language, as in Marx, defeats it.
• Confirm consent for personal-services contracts. Where covenants are tied to personal-services agreements, one should obtain the burdened party’s consent to assignment; Strehlow holds that without it, the assignee cannot enforce.

Conclusion

Assignment and delegation provisions decide who ultimately holds — and can enforce — the bargain. In Florida, the difference between DePuy and Marx was not the strength of the business interest, but the clarity of a few sentences of contract language, read against a statute that demands express authorization. A buyer paying for goodwill and restrictive covenants should never have to litigate whether it bought the right to enforce them. The takeaway is simple: if you intend the deal to travel, say so — expressly.

As part of their mentorship plan for the year, Eric and Melodie will be authoring 10 articles throughout the year on the 10 most impactful contract provisions in commercial litigation. The blog post above serves as Article 4 in their 10-part blog post series.