                                 CODE OF VIRGINIA

TRANSFER OF CONTRACTUAL INTEREST (§ 59.1-505.3)

The following rules apply to a transfer of a contractual interest:

1. A party&#8217;s contractual interest may be transferred unless the transfer:

   A. is prohibited by other law; or

   B. except as otherwise provided in paragraph (3), would materially change the
   duty of the other party, materially increase the burden or risk imposed on the
   other party, or materially impair the other party&#8217;s property or its
   likelihood or expectation of obtaining return performance.

2. Except as otherwise provided in paragraph (3) and § 59.1-505.8 (a) (1) (B),
a term prohibiting transfer of a party&#8217;s contractual interest is
enforceable, and a transfer made in violation of that term is a breach of
contract and is ineffective to create contractual rights in the transferee
against the nontransferring party, except to the extent that:

   A. the contract is a license for incorporation or use of the licensed
   information or informational rights with information or informational rights
   from other sources in a combined work for public distribution or public
   performance and the transfer is of the completed, combined work;

   B. the transfer is of a right to payment arising out of the transferor&#8217;s
   due performance of less than its entire obligation and the transfer would be
   enforceable under paragraph (1) in the absence of the term prohibiting
   transfer; or

   C. the term is in a mass-market license, the transfer is made along with a
   computer, and the transfer is a gift or a donation (i) to a public elementary
   or secondary school, (ii) to a public library, (iii) to an organization exempt
   from taxation under &#xA7; 501(c) (3) of the Internal Revenue Code, or (iv)
   from a consumer to another consumer.

   D. [Repealed.]

3. A right to damages for breach of the whole contract or a right to payment
arising out of the transferor&#8217;s due performance of its entire obligation
may be transferred notwithstanding an agreement otherwise.

4. A term that prohibits transfer of a contractual interest under a mass-market
license by the licensee must be conspicuous.

HISTORY: 2000, cc. 101, 996; 2001, cc. 762, 763; 2002, c. 403.