Oregon Statutes 37.240 – Executory contracts
(1) A receiver may, upon order of the court, assume any executory contract of the owner. A receiver may, after giving notice, reject any executory contract of the owner. The court may condition assumption or rejection of any executory contract on terms and conditions that the court deems just and proper. A receiver’s performance of an executory contract does not constitute an assumption of the contract or an agreement by the receiver to assume it, nor otherwise preclude the receiver from rejecting it.
Terms Used In Oregon Statutes 37.240
- Contract: A legal written agreement that becomes binding when signed.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Lien: A claim against real or personal property in satisfaction of a debt.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
(2) If a receiver assumes an executory contract, the receiver must assume the contract in its entirety.
(3) Any obligation or liability incurred by a receiver due to the receiver’s assumption of an executory contract is an expense of the receivership. A receiver’s rejection of an executory contract is treated as a breach of the contract occurring immediately before the receiver’s appointment, and the receiver’s right to possess or use property pursuant to an executory contract terminates upon rejection of the contract. The other party to an executory contract that is rejected by a receiver may take any necessary steps to terminate or cancel the contract. Any claims resulting from a receiver’s rejection of an executory contract must be submitted to the receiver in the manner provided for by ORS § 37.350 within 30 days after the rejection.
(4) A receiver’s power under this section to assume an executory contract is not affected by any provision in the contract that would effect or permit a forfeiture, modification or termination of the contract on account of the receiver’s appointment, the financial condition of the owner or an assignment for the benefit of creditors by the owner.
(5) A receiver may not assume an executory contract of the owner without the consent of the other party to the contract if:
(a) Applicable law would excuse the other party from accepting performance from or rendering performance to anyone other than the owner even in the absence of any provisions in the contract expressly restricting or prohibiting an assignment of rights or duties;
(b) The contract is a contract to make a loan or extend credit or financial accommodations to or for the benefit of the owner, or to issue a security of the owner; or
(c) The contract expires by its own terms, or under applicable law, prior to the receiver’s assumption thereof.
(6) A receiver may not assign an executory contract lease without assuming it, unless the receiver obtains consent from all other parties to the contract.
(7) If the receiver rejects an executory contract for the sale of real property under which the owner is the seller and the purchaser is in possession of the real property, the sale of a real property timeshare interest under which the owner is the seller, the license of intellectual property rights under which the owner is the licensor or the lease of real property under which the owner is the lessor, then:
(a) The purchaser, licensee or lessee may:
(A) Treat the rejection as a termination of the contract, license agreement or lease; or
(B) Remain in possession and continue to perform all obligations arising under the contract, but offset against any payments any damages occurring on account of the rejection after it occurs.
(b) A purchaser of real property is entitled to receive from the receiver any deed or any other instrument of conveyance that the owner is obligated to deliver under the contract when the purchaser becomes entitled to receive it, and the deed or instrument has the same force and effect as if given by the owner.
(c) A purchaser, licensee or lessee who elects to remain in possession under the terms of this subsection has no claim or rights against the receiver on account of any damages arising from the receiver’s rejection except as expressly permitted by this subsection.
(d) A purchaser of real property who elects to treat rejection of an executory contract as a termination has a lien against the real property for the portion of the purchase price that the purchaser has paid.
(8)(a) If a receiver does not seek authorization from the court to assume an executory contract within 180 days after the receiver’s appointment, the receiver is deemed to have rejected the contract.
(b) The court may shorten or extend the time period described in paragraph (a) of this subsection for good cause shown.
(9) Nothing in this section affects the enforceability of prohibitions against assignment that exist under contract or applicable law. [2017 c.358 § 24]