An inventor assigns rights under a licensing agreement to a corporation without consideration. The inventor dies years later and devises the rights to his son. To whom should the manufacturer make payments under the licensing agreement?

• A. A The corporation
• B. B The inventor’s daughter
• C. C The inventor’s son
• D. D No one

Answer: (C)

The key idea is that a gratuitous assignment of contract rights is typically revocable. Because the inventor gave away the rights under the licensing agreement to a corporation without any consideration, that transfer isn’t supported by value and can be revoked. When the inventor dies, the rights revert to his estate, and his heirs step in. Since he devised the rights to his son, the ongoing payments under the licensing agreement belong to the son.

If there had been consideration or if the assignment had been made irrevocable (for example, a license tied to valuable consideration or a separate irrevocable arrangement), then the corporation could be entitled to the payments. But in this scenario, the lack of consideration makes the transfer revocable, so the rightful recipient is the inventor’s heir.