I realize that when a wholesaler assigns a contract, he/she needs to keep an eye on the process leading to a closing, just to make sure it goes smoothly to a completion. Makes sense.

Is that a matter of courtesy / ethics OR the wholesaler will be legally liable to an original seller, if the end buyer / assignee fails to close (for any reason)?
Will the wholesaler then be obligated to close himself to avoid losing the deposit, or even worse, to be pressed into a specific performance?

In other words, does the sale contract assignment releases the wholesaler / assignor from his legal responsibilities to an original seller?

The contract for the assignee will usually state that they now assume the full responsibility for the transaction. From the assignments we've done and talking with the lawyers, other person is completely stepping out and is not responsible. If the deal busts after we assign it, it's between the new buyer and seller.

First any time your involved in any part of a real estate contract being assigned... no matter what part you play... you can find yourself involved in legal actions if the deal falls through.... that should not be of any surprise.

How you would fare in such an event would depend on how your contract with the seller and buyer was worded. Our State Association Approved and the BAR approved standard contracts for REALTORS has a specific clause that states the contract is 1) not assignable 2) Assignable but original buyer is not released 3) Assignable but original buyer is fully released from contract. Item 3) often has a stipulation that the seller agree to the 2nd buyers assignment.

Make your contracts as clear as possible as to each parties intent and responsibility and you will be on better grounds if legal problems do develop.

To Realty Check:
In California, as I understand, the contract is unconditionally assignable if it doesn't say, explicitly, otherwise.
I am just curious, why would anybody agree to an option that says: "Assignable but original buyer is fully released from contract. Item 3) often has a stipulation that the seller agree to the 2nd buyers assignment".

Want or need to sale a property... or too dumb to read the contract