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Assignments: The Basic Law

The assignment of a right or obligation is a common contractual event under the law and the right to assign (or prohibition against assignments) is found in the majority of agreements, leases and business structural documents created in the United States.

As with many terms commonly used, people are familiar with the term but often are not aware or fully aware of what the terms entail. The concept of assignment of rights and obligations is one of those simple concepts with wide ranging ramifications in the contractual and business context and the law imposes severe restrictions on the validity and effect of assignment in many instances. Clear contractual provisions concerning assignments and rights should be in every document and structure created and this article will outline why such drafting is essential for the creation of appropriate and effective contracts and structures.

The reader should first read the article on Limited Liability Entities in the United States and Contracts since the information in those articles will be assumed in this article.

Basic Definitions and Concepts:

An assignment is the transfer of rights held by one party called the “assignor” to another party called the “assignee.” The legal nature of the assignment and the contractual terms of the agreement between the parties determines some additional rights and liabilities that accompany the assignment. The assignment of rights under a contract usually completely transfers the rights to the assignee to receive the benefits accruing under the contract. Ordinarily, the term assignment is limited to the transfer of rights that are intangible, like contractual rights and rights connected with property. Merchants Service Co. v. Small Claims Court , 35 Cal. 2d 109, 113-114 (Cal. 1950).

An assignment will generally be permitted under the law unless there is an express prohibition against assignment in the underlying contract or lease. Where assignments are permitted, the assignor need not consult the other party to the contract but may merely assign the rights at that time. However, an assignment cannot have any adverse effect on the duties of the other party to the contract, nor can it diminish the chance of the other party receiving complete performance. The assignor normally remains liable unless there is an agreement to the contrary by the other party to the contract.

The effect of a valid assignment is to remove privity between the assignor and the obligor and create privity between the obligor and the assignee. Privity is usually defined as a direct and immediate contractual relationship. See Merchants case above.

Further, for the assignment to be effective in most jurisdictions, it must occur in the present. One does not normally assign a future right; the assignment vests immediate rights and obligations.

No specific language is required to create an assignment so long as the assignor makes clear his/her intent to assign identified contractual rights to the assignee. Since expensive litigation can erupt from ambiguous or vague language, obtaining the correct verbiage is vital. An agreement must manifest the intent to transfer rights and can either be oral or in writing and the rights assigned must be certain.

Note that an assignment of an interest is the transfer of some identifiable property, claim, or right from the assignor to the assignee. The assignment operates to transfer to the assignee all of the rights, title, or interest of the assignor in the thing assigned. A transfer of all rights, title, and interests conveys everything that the assignor owned in the thing assigned and the assignee stands in the shoes of the assignor. Knott v. McDonald’s Corp ., 985 F. Supp. 1222 (N.D. Cal. 1997)

The parties must intend to effectuate an assignment at the time of the transfer, although no particular language or procedure is necessary. As long ago as the case of National Reserve Co. v. Metropolitan Trust Co ., 17 Cal. 2d 827 (Cal. 1941), the court held that in determining what rights or interests pass under an assignment, the intention of the parties as manifested in the instrument is controlling.

The intent of the parties to an assignment is a question of fact to be derived not only from the instrument executed by the parties but also from the surrounding circumstances. When there is no writing to evidence the intention to transfer some identifiable property, claim, or right, it is necessary to scrutinize the surrounding circumstances and parties’ acts to ascertain their intentions. Strosberg v. Brauvin Realty Servs., 295 Ill. App. 3d 17 (Ill. App. Ct. 1st Dist. 1998)

The general rule applicable to assignments of choses in action is that an assignment, unless there is a contract to the contrary, carries with it all securities held by the assignor as collateral to the claim and all rights incidental thereto and vests in the assignee the equitable title to such collateral securities and incidental rights. An unqualified assignment of a contract or chose in action, however, with no indication of the intent of the parties, vests in the assignee the assigned contract or chose and all rights and remedies incidental thereto.

More examples: In Strosberg v. Brauvin Realty Servs ., 295 Ill. App. 3d 17 (Ill. App. Ct. 1st Dist. 1998), the court held that the assignee of a party to a subordination agreement is entitled to the benefits and is subject to the burdens of the agreement. In Florida E. C. R. Co. v. Eno , 99 Fla. 887 (Fla. 1930), the court held that the mere assignment of all sums due in and of itself creates no different or other liability of the owner to the assignee than that which existed from the owner to the assignor.

And note that even though an assignment vests in the assignee all rights, remedies, and contingent benefits which are incidental to the thing assigned, those which are personal to the assignor and for his sole benefit are not assigned. Rasp v. Hidden Valley Lake, Inc ., 519 N.E.2d 153, 158 (Ind. Ct. App. 1988). Thus, if the underlying agreement provides that a service can only be provided to X, X cannot assign that right to Y.

Novation Compared to Assignment:

Although the difference between a novation and an assignment may appear narrow, it is an essential one. “Novation is a act whereby one party transfers all its obligations and benefits under a contract to a third party.” In a novation, a third party successfully substitutes the original party as a party to the contract. “When a contract is novated, the other contracting party must be left in the same position he was in prior to the novation being made.”

A sublease is the transfer when a tenant retains some right of reentry onto the leased premises. However, if the tenant transfers the entire leasehold estate, retaining no right of reentry or other reversionary interest, then the transfer is an assignment. The assignor is normally also removed from liability to the landlord only if the landlord consents or allowed that right in the lease. In a sublease, the original tenant is not released from the obligations of the original lease.

Equitable Assignments:

An equitable assignment is one in which one has a future interest and is not valid at law but valid in a court of equity. In National Bank of Republic v. United Sec. Life Ins. & Trust Co. , 17 App. D.C. 112 (D.C. Cir. 1900), the court held that to constitute an equitable assignment of a chose in action, the following has to occur generally: anything said written or done, in pursuance of an agreement and for valuable consideration, or in consideration of an antecedent debt, to place a chose in action or fund out of the control of the owner, and appropriate it to or in favor of another person, amounts to an equitable assignment. Thus, an agreement, between a debtor and a creditor, that the debt shall be paid out of a specific fund going to the debtor may operate as an equitable assignment.

In Egyptian Navigation Co. v. Baker Invs. Corp. , 2008 U.S. Dist. LEXIS 30804 (S.D.N.Y. Apr. 14, 2008), the court stated that an equitable assignment occurs under English law when an assignor, with an intent to transfer his/her right to a chose in action, informs the assignee about the right so transferred.

An executory agreement or a declaration of trust are also equitable assignments if unenforceable as assignments by a court of law but enforceable by a court of equity exercising sound discretion according to the circumstances of the case. Since California combines courts of equity and courts of law, the same court would hear arguments as to whether an equitable assignment had occurred. Quite often, such relief is granted to avoid fraud or unjust enrichment.

Note that obtaining an assignment through fraudulent means invalidates the assignment. Fraud destroys the validity of everything into which it enters. It vitiates the most solemn contracts, documents, and even judgments. Walker v. Rich , 79 Cal. App. 139 (Cal. App. 1926). If an assignment is made with the fraudulent intent to delay, hinder, and defraud creditors, then it is void as fraudulent in fact. See our article on Transfers to Defraud Creditors .

But note that the motives that prompted an assignor to make the transfer will be considered as immaterial and will constitute no defense to an action by the assignee, if an assignment is considered as valid in all other respects.

Enforceability of Assignments:

Whether a right under a contract is capable of being transferred is determined by the law of the place where the contract was entered into. The validity and effect of an assignment is determined by the law of the place of assignment. The validity of an assignment of a contractual right is governed by the law of the state with the most significant relationship to the assignment and the parties.

In some jurisdictions, the traditional conflict of laws rules governing assignments has been rejected and the law of the place having the most significant contacts with the assignment applies. In Downs v. American Mut. Liability Ins. Co ., 14 N.Y.2d 266 (N.Y. 1964), a wife and her husband separated and the wife obtained a judgment of separation from the husband in New York. The judgment required the husband to pay a certain yearly sum to the wife. The husband assigned 50 percent of his future salary, wages, and earnings to the wife. The agreement authorized the employer to make such payments to the wife.

After the husband moved from New York, the wife learned that he was employed by an employer in Massachusetts. She sent the proper notice and demanded payment under the agreement. The employer refused and the wife brought an action for enforcement. The court observed that Massachusetts did not prohibit assignment of the husband’s wages. Moreover, Massachusetts law was not controlling because New York had the most significant relationship with the assignment. Therefore, the court ruled in favor of the wife.

Therefore, the validity of an assignment is determined by looking to the law of the forum with the most significant relationship to the assignment itself. To determine the applicable law of assignments, the court must look to the law of the state which is most significantly related to the principal issue before it.

Assignment of Contractual Rights:

Generally, the law allows the assignment of a contractual right unless the substitution of rights would materially change the duty of the obligor, materially increase the burden or risk imposed on the obligor by the contract, materially impair the chance of obtaining return performance, or materially reduce the value of the performance to the obligor. Restat 2d of Contracts, § 317(2)(a). This presumes that the underlying agreement is silent on the right to assign.

If the contract specifically precludes assignment, the contractual right is not assignable. Whether a contract is assignable is a matter of contractual intent and one must look to the language used by the parties to discern that intent.

In the absence of an express provision to the contrary, the rights and duties under a bilateral executory contract that does not involve personal skill, trust, or confidence may be assigned without the consent of the other party. But note that an assignment is invalid if it would materially alter the other party’s duties and responsibilities. Once an assignment is effective, the assignee stands in the shoes of the assignor and assumes all of assignor’s rights. Hence, after a valid assignment, the assignor’s right to performance is extinguished, transferred to assignee, and the assignee possesses the same rights, benefits, and remedies assignor once possessed. Robert Lamb Hart Planners & Architects v. Evergreen, Ltd. , 787 F. Supp. 753 (S.D. Ohio 1992).

On the other hand, an assignee’s right against the obligor is subject to “all of the limitations of the assignor’s right, all defenses thereto, and all set-offs and counterclaims which would have been available against the assignor had there been no assignment, provided that these defenses and set-offs are based on facts existing at the time of the assignment.” See Robert Lamb , case, above.

The power of the contract to restrict assignment is broad. Usually, contractual provisions that restrict assignment of the contract without the consent of the obligor are valid and enforceable, even when there is statutory authorization for the assignment. The restriction of the power to assign is often ineffective unless the restriction is expressly and precisely stated. Anti-assignment clauses are effective only if they contain clear, unambiguous language of prohibition. Anti-assignment clauses protect only the obligor and do not affect the transaction between the assignee and assignor.

Usually, a prohibition against the assignment of a contract does not prevent an assignment of the right to receive payments due, unless circumstances indicate the contrary. Moreover, the contracting parties cannot, by a mere non-assignment provision, prevent the effectual alienation of the right to money which becomes due under the contract.

A contract provision prohibiting or restricting an assignment may be waived, or a party may so act as to be estopped from objecting to the assignment, such as by effectively ratifying the assignment. The power to void an assignment made in violation of an anti-assignment clause may be waived either before or after the assignment. See our article on Contracts.

Noncompete Clauses and Assignments:

Of critical import to most buyers of businesses is the ability to ensure that key employees of the business being purchased cannot start a competing company. Some states strictly limit such clauses, some do allow them. California does restrict noncompete clauses, only allowing them under certain circumstances. A common question in those states that do allow them is whether such rights can be assigned to a new party, such as the buyer of the buyer.

A covenant not to compete, also called a non-competitive clause, is a formal agreement prohibiting one party from performing similar work or business within a designated area for a specified amount of time. This type of clause is generally included in contracts between employer and employee and contracts between buyer and seller of a business.

Many workers sign a covenant not to compete as part of the paperwork required for employment. It may be a separate document similar to a non-disclosure agreement, or buried within a number of other clauses in a contract. A covenant not to compete is generally legal and enforceable, although there are some exceptions and restrictions.

Whenever a company recruits skilled employees, it invests a significant amount of time and training. For example, it often takes years before a research chemist or a design engineer develops a workable knowledge of a company’s product line, including trade secrets and highly sensitive information. Once an employee gains this knowledge and experience, however, all sorts of things can happen. The employee could work for the company until retirement, accept a better offer from a competing company or start up his or her own business.

A covenant not to compete may cover a number of potential issues between employers and former employees. Many companies spend years developing a local base of customers or clients. It is important that this customer base not fall into the hands of local competitors. When an employee signs a covenant not to compete, he or she usually agrees not to use insider knowledge of the company’s customer base to disadvantage the company. The covenant not to compete often defines a broad geographical area considered off-limits to former employees, possibly tens or hundreds of miles.

Another area of concern covered by a covenant not to compete is a potential ‘brain drain’. Some high-level former employees may seek to recruit others from the same company to create new competition. Retention of employees, especially those with unique skills or proprietary knowledge, is vital for most companies, so a covenant not to compete may spell out definite restrictions on the hiring or recruiting of employees.

A covenant not to compete may also define a specific amount of time before a former employee can seek employment in a similar field. Many companies offer a substantial severance package to make sure former employees are financially solvent until the terms of the covenant not to compete have been met.

Because the use of a covenant not to compete can be controversial, a handful of states, including California, have largely banned this type of contractual language. The legal enforcement of these agreements falls on individual states, and many have sided with the employee during arbitration or litigation. A covenant not to compete must be reasonable and specific, with defined time periods and coverage areas. If the agreement gives the company too much power over former employees or is ambiguous, state courts may declare it to be overbroad and therefore unenforceable. In such case, the employee would be free to pursue any employment opportunity, including working for a direct competitor or starting up a new company of his or her own.

It has been held that an employee’s covenant not to compete is assignable where one business is transferred to another, that a merger does not constitute an assignment of a covenant not to compete, and that a covenant not to compete is enforceable by a successor to the employer where the assignment does not create an added burden of employment or other disadvantage to the employee. However, in some states such as Hawaii, it has also been held that a covenant not to compete is not assignable and under various statutes for various reasons that such covenants are not enforceable against an employee by a successor to the employer. Hawaii v. Gannett Pac. Corp. , 99 F. Supp. 2d 1241 (D. Haw. 1999)

It is vital to obtain the relevant law of the applicable state before drafting or attempting to enforce assignment rights in this particular area.

Conclusion:

In the current business world of fast changing structures, agreements, employees and projects, the ability to assign rights and obligations is essential to allow flexibility and adjustment to new situations. Conversely, the ability to hold a contracting party into the deal may be essential for the future of a party. Thus, the law of assignments and the restriction on same is a critical aspect of every agreement and every structure. This basic provision is often glanced at by the contracting parties, or scribbled into the deal at the last minute but can easily become the most vital part of the transaction.

As an example, one client of ours came into the office outraged that his co venturer on a sizable exporting agreement, who had excellent connections in Brazil, had elected to pursue another venture instead and assigned the agreement to a party unknown to our client and without the business contacts our client considered vital. When we examined the handwritten agreement our client had drafted in a restaurant in Sao Paolo, we discovered there was no restriction on assignment whatsoever…our client had not even considered that right when drafting the agreement after a full day of work.

One choses who one does business with carefully…to ensure that one’s choice remains the party on the other side of the contract, one must master the ability to negotiate proper assignment provisions.

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assignments contracts law

Ultimate Checklist for Understanding Contract Assignment Rules

  • February 28, 2024
  • Moton Legal Group

assignments contracts law

In contracts, understanding assignment is key. Simply put, an assignment in contract law is when one party (the assignor) transfers their rights and responsibilities under a contract to another party (the assignee). This can include anything from leasing agreements to business operations. But why is this important? It’s because it allows for flexibility in business and personal dealings, a critical component in our world.

Here’s a quick rundown: – Contract Basics: The foundational agreements between parties. – Assignment Importance: Allowing the transfer of obligations and benefits to keep up with life’s changes.

Contracts are a staple in both personal and business worlds, acting as the backbone to many transactions and agreements encountered daily. Understanding the nuances, like assignments, can empower you to navigate these waters with confidence and ease. Whether you’re a business owner in the Southeast looking to expand or an individual managing personal agreements, grasp these basics, and you’re on the right path.

Detailed infographic on the concept of contract assignment in law, explaining the roles of the assignor and assignee, the process of an actual assignment, and a visual representation of the transfer of rights and obligations under a contract. - assignment in contract law infographic process-5-steps-informal

Understanding Contract Assignment

Contract Assignment sounds complicated, right? But, let’s break it down into simple terms. In contracts and legal agreements, knowing about assignment can save you a lot of headaches down the road. Whether you’re a business owner, a landlord, or just someone who deals with contracts, this is for you.

Legal Definition

At its core, contract assignment is about transferring rights or obligations under a contract from one party to another. Think of it as passing a baton in a relay race. The original party (the assignor) hands off their responsibilities or benefits to someone else (the assignee). But, there’s a twist – the race keeps going with the new runner without starting over.

Contract Law

In contract law, assignment comes into play in various ways. For example, if you’re a freelancer and you’ve agreed to complete a project but suddenly find yourself overbooked, you might assign that contract to another freelancer. This way, the job gets done, and your client is happy. However, not all contracts can be freely assigned. Some require the other party’s consent, and others can’t be assigned at all, especially if they involve personal skills or confidential trust.

Property Law

When it comes to property law, assignment often surfaces in landlord-tenant relationships. Say you’re renting a shop for your business, but you decide to move. If your lease allows it, you might assign your lease to another business. This means they take over your lease, stepping into your shoes, with all the rights and obligations that come with it.

The concept might seem straightforward, but there are important legal requirements and potential pitfalls to be aware of. For instance, an assignment could be prohibited by the contract itself, or it may significantly change the original deal’s terms in a way that’s not allowed. Plus, when you’re dealing with something that requires a unique skill set, like an artist or a consultant, those services typically can’t be passed on to someone else without agreement from all parties involved.

To navigate these complexities, understanding the fundamentals of assignment in contract law and property law is crucial. It ensures that when you’re ready to pass that baton, you’re doing it in a way that’s legal, effective, and doesn’t leave you tripping up before you reach the finish line.

The goal here is to make sure everyone involved understands what’s happening and agrees to it. That way, assignments can be a useful tool to manage your contracts and property agreements, keeping things moving smoothly even when changes come up.

For more detailed exploration on this topic, consider checking the comprehensive guide on Assignment (law)). This resource dives deeper into the nuances of contract assignment, offering insights and examples that can help clarify this complex area of law.

By grasping these basics, you’re well on your way to mastering the art of contract assignment. Whether you’re dealing with leases, business deals, or any agreement in between, knowing how to effectively assign a contract can be a game-changer.

Key Differences Between Assignment and Novation

When diving into contracts, two terms that often cause confusion are assignment and novation . While both deal with transferring obligations and rights under a contract, they are fundamentally different in several key aspects. Understanding these differences is crucial for anyone involved in contract management or negotiation.

Rights Transfer

Assignment involves the transfer of benefits or rights from one party (the assignor) to another (the assignee). However, it’s important to note that only the benefits of the contract can be assigned, not the burdens. For instance, if someone has the right to receive payments under a contract, they can assign this right to someone else.

Novation , on the other hand, is more comprehensive. It involves transferring both the rights and obligations under a contract from one party to a new party. With novation, the original party is completely released from the contract, and a new contractual relationship is formed between the remaining and the new party. This is a key distinction because, in novation, all parties must agree to this new arrangement.

Obligations Transfer

Assignment doesn’t transfer the original party’s obligations under the contract. The assignor (the original party who had the rights under the contract) might still be liable if the assignee fails to fulfill the contract terms.

In contrast, novation transfers all obligations to the new party. Once a novation is complete, the new party takes over all rights and obligations, leaving the original party with no further legal liabilities or rights under the contract.

Written Agreement

While assignments can sometimes be informal or even verbal, novation almost always requires a written agreement. This is because novation affects more parties’ rights and obligations and has a more significant impact on the contractual relationship. A written agreement ensures that all parties are clear about the terms of the novation and their respective responsibilities.

In practice, the need for a written agreement in novation serves as a protection for all parties involved. It ensures that the transfer of obligations is clearly documented and legally enforceable.

For example, let’s say Alex agrees to paint Bailey’s house for $1,000. Later, Alex decides they can’t complete the job and wants Chris to take over. If Bailey agrees, they can sign a novation agreement where Chris agrees to paint the house under the same conditions. Alex is then relieved from the original contract, and Chris becomes responsible for completing the painting job.

Understanding the difference between assignment and novation is critical for anyone dealing with contracts. While both processes allow for the transfer of rights or obligations, they do so in different ways and with varying implications for all parties involved. Knowing when and how to use each can help ensure that your contractual relationships are managed effectively and legally sound.

For further in-depth information and real-life case examples on assignment in contract law, you can explore detailed resources such as Assignment (law) on Wikipedia).

Next, we’ll delve into the legal requirements for a valid assignment, touching on express prohibition, material change, future rights, and the rare skill requirement. Understanding these will further equip you to navigate the complexities of contract assignments successfully.

Legal Requirements for a Valid Assignment

When dealing with assignment in contract law , it’s crucial to understand the legal backbone that supports a valid assignment. This ensures that the assignment stands up in a court of law if disputes arise. Let’s break down the must-know legal requirements: express prohibition, material change, future rights, and rare skill requirement.

Express Prohibition

The first stop on our checklist is to look for an express prohibition against assignment in the contract. This is a clause that outright states assignments are not allowed without the other party’s consent. If such language exists and you proceed with an assignment, you could be breaching the contract. Always read the fine print or have a legal expert review the contract for you.

Material Change

Next up is the material change requirement. The law states that an assignment cannot significantly alter the duties, increase the burdens, or impair the chances of the other party receiving due performance under the contract. For instance, if the contract involves personal services tailored to the specific party, assigning it to someone else might change the expected outcome, making such an assignment invalid.

Future Rights

Another important aspect is future rights . The rule here is straightforward: you can’t assign what you don’t have. This means that a promise to assign rights you may acquire in the future is generally not enforceable at present. An effective assignment requires that the rights exist at the time of the assignment.

Rare Skill Requirement

Lastly, let’s talk about the rare skill requirement . Some contracts are so specialized that they cannot be assigned to another party without compromising the contract’s integrity. This is often the case with contracts that rely on an individual’s unique skills or trust. Think of an artist commissioned for a portrait or a lawyer hired for their specialized legal expertise. In these scenarios, assignments are not feasible as they could severely impact the contract’s intended outcome.

Understanding these legal requirements is pivotal for navigating the complexities of assignment in contract law. By ensuring compliance with these principles, you can effectively manage contract assignments, safeguarding your interests and those of the other contracting party.

For anyone looking to delve deeper into the intricacies of contract law, you can explore detailed resources such as Assignment (law) on Wikipedia).

Moving forward, we’ll explore the common types of contract assignments, from landlord-tenant agreements to business contracts and intellectual property transfers. This will give you a clearer picture of how assignments work across different legal landscapes.

Common Types of Contract Assignments

When we dive into assignment in contract law , we find it touches nearly every aspect of our business and personal lives. Let’s simplify this complex topic by looking at some of the most common types of contract assignments you might encounter.

Landlord-Tenant Agreements

Imagine you’re renting a fantastic apartment but have to move because of a new job. Instead of breaking your lease, you can assign your lease to someone else. This means the new tenant takes over your lease, including rent payments and maintenance responsibilities. However, it’s crucial that the landlord agrees to this switch. If done right, it’s a win-win for everyone involved.

Landlord and tenant shaking hands - assignment in contract law

Business Contracts

In the business world, contract assignments are a daily occurrence. For example, if a company agrees to provide services but then realizes it’s overbooked, it can assign the contract to another company that can fulfill the obligations. This way, the project is completed on time, and the client remains happy. It’s a common practice that ensures flexibility and efficiency in business operations.

Business contract signing - assignment in contract law

Intellectual Property

Intellectual property (IP) assignments are fascinating and complex. If an inventor creates a new product, they can assign their patent rights to a company in exchange for a lump sum or royalties. This transfer allows the company to produce and sell the invention, while the inventor benefits financially. However, it’s critical to note that with trademarks, the goodwill associated with the mark must also be transferred to maintain its value.

Patent documents and invention sketches - assignment in contract law

Understanding these types of assignments helps clarify the vast landscape of contract law. Whether it’s a cozy apartment, a crucial business deal, or a groundbreaking invention, assignments play a pivotal role in ensuring these transitions happen smoothly.

As we navigate through the realm of contract assignments, each type has its own set of rules and best practices. The key is to ensure all parties are on the same page and that the assignment is executed properly to avoid any legal pitfalls.

Diving deeper into the subject, next, we will explore how to execute a contract assignment effectively, ensuring all legal requirements are met and the process runs as smoothly as possible.

How to Execute a Contract Assignment Effectively

Executing a contract assignment effectively is crucial to ensure that all legal requirements are met and the process runs smoothly. Here’s a straightforward guide to help you navigate this process without any hiccups.

Written Consent

First and foremost, get written consent . This might seem like a no-brainer, but it’s surprising how often this step is overlooked. If the original contract requires the consent of the other party for an assignment to be valid, make sure you have this in black and white. Not just a handshake or a verbal agreement. This ensures clarity and avoids any ambiguity or disputes down the line.

Notice of Assignment

Next up, provide a notice of assignment to all relevant parties. This is not just common courtesy; it’s often a legal requirement. It informs all parties involved about the change in the assignment of rights or obligations under the contract. Think of it as updating your address with the post office; everyone needs to know where to send the mail now.

Privity of Estate

Understanding privity of estate is key in real estate transactions and leases. It refers to the legal relationship that exists between parties under a contract. When you assign a contract, the assignee steps into your shoes, but the original terms of the contract still apply. This means the assignee needs to be aware of and comply with the original agreement’s requirements.

Secondary Liability

Lastly, let’s talk about secondary liability . Just because you’ve assigned a contract doesn’t always mean you’re off the hook. In some cases, the original party (the assignor) may still hold some liability if the assignee fails to perform under the contract. It’s essential to understand the terms of your assignment agreement and whether it includes a release from liability for the assignor.

Executing a contract assignment effectively is all about dotting the I’s and crossing the T’s . By following these steps—securing written consent, issuing a notice of assignment, understanding privity of estate, and clarifying secondary liability—you’re setting yourself up for a seamless transition.

The goal is to ensure all parties are fully informed and agreeable to the changes being made. This not only helps in maintaining good relationships but also in avoiding potential legal issues down the line.

We’ll dive into some of the frequently asked questions about contract assignment to clear any lingering doubts.

Frequently Asked Questions about Contract Assignment

When navigating contracts, questions often arise, particularly about the concepts of assignment and novation. Let’s break these down into simpler terms.

What does assignment of a contract mean?

In the realm of assignment in contract law , think of assignment as passing the baton in a relay race. It’s where one party (the assignor) transfers their rights and benefits under a contract to another party (the assignee). However, unlike a relay race, the original party might still be on the hook for obligations unless the contract says otherwise. It’s like handing off the baton but still running alongside the new runner just in case.

Is an assignment legally binding?

Absolutely, an assignment is as binding as a pinky promise in the playground – but with legal muscle behind it. Once an assignment meets the necessary legal criteria (like not significantly changing the obligor’s duties or having express consent if required), it’s set in stone. This means both the assignee and the assignor must honor this transfer of rights or face potential legal actions. It’s a serious commitment, not just a casual exchange.

What is the difference between assignment and novation?

Now, this is where it gets a bit more intricate. If assignment is passing the baton, novation is forming a new team mid-race. It involves replacing an old obligation with a new one or adding a new party to take over an old one’s duties. Crucially, novation extinguishes the old contract and requires all original and new parties to agree. It’s a clean slate – the original party walks away, and the new party steps in, no strings attached.

While both assignment and novation change the playing field of a contract, novation requires a unanimous thumbs up from everyone involved, completely freeing the original party from their obligations. On the other hand, an assignment might leave the original party watching from the sidelines, ready to jump back in if needed.

Understanding these facets of assignment in contract law is crucial, whether you’re diving into a new agreement or navigating an existing one. Knowledge is power – especially when it comes to contracts.

As we wrap up these FAQs, the legal world of contracts is vast and sometimes complex, but breaking it down into bite-sized pieces can help demystify the process and empower you in your legal undertakings.

Here’s a helpful resource for further reading on the difference between assignment and cession.

Now, let’s continue on to the conclusion to tie all these insights together.

Navigating assignment in contract law can seem like a daunting task at first glance. However, with the right information and guidance, it becomes an invaluable tool in ensuring that your rights and obligations are protected and effectively managed in any contractual relationship.

At Moton Legal Group, we understand the intricacies of contract law and are dedicated to providing you with the expertise and support you need to navigate these waters. Whether you’re dealing with a straightforward contract assignment or facing more complex legal challenges, our team is here to help. We pride ourselves on our ability to demystify legal processes and make them accessible to everyone.

The key to successfully managing any contract assignment lies in understanding your rights, the obligations involved, and the potential impacts on all parties. It’s about ensuring that the assignment is executed in a way that is legally sound and aligns with your interests.

If you’re in need of assistance with a contract review, looking to understand more about how contract assignments work, or simply seeking legal advice on your contractual rights and responsibilities, Moton Legal Group is here for you. Our team of experienced attorneys is committed to providing the clarity, insight, and support you need to navigate the complexities of contract law with confidence.

For more information on how we can assist you with your contract review and other legal needs, visit our contract review service page .

In the constantly evolving landscape of contract law, having a trusted legal partner can make all the difference. Let Moton Legal Group be your guide, ensuring that your contractual dealings are handled with the utmost care, professionalism, and expertise. Together, we can navigate the complexities of contract law and secure the best possible outcomes for your legal matters.

Thank you for joining us on this journey through the fundamentals of assignment in contract law. We hope you found this information helpful and feel more empowered to handle your contractual affairs with confidence.

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Understanding Considerations in Contract Law

Assignment of Contract

Jump to section, what is an assignment of contract.

An assignment of contract is a legal term that describes the process that occurs when the original party (assignor) transfers their rights and obligations under their contract to a third party (assignee). When an assignment of contract happens, the original party is relieved of their contractual duties, and their role is replaced by the approved incoming party.

How Does Assignment of Contract Work?

An assignment of contract is simpler than you might think.

The process starts with an existing contract party who wishes to transfer their contractual obligations to a new party.

When this occurs, the existing contract party must first confirm that an assignment of contract is permissible under the legally binding agreement . Some contracts prohibit assignments of contract altogether, and some require the other parties of the agreement to agree to the transfer. However, the general rule is that contracts are freely assignable unless there is an explicit provision that says otherwise.

In other cases, some contracts allow an assignment of contract without any formal notification to other contract parties. If this is the case, once the existing contract party decides to reassign his duties, he must create a “Letter of Assignment ” to notify any other contract signers of the change.

The Letter of Assignment must include details about who is to take over the contractual obligations of the exiting party and when the transfer will take place. If the assignment is valid, the assignor is not required to obtain the consent or signature of the other parties to the original contract for the valid assignment to take place.

Check out this article to learn more about how assigning a contract works.

Contract Assignment Examples

Contract assignments are great tools for contract parties to use when they wish to transfer their commitments to a third party. Here are some examples of contract assignments to help you better understand them:

Anna signs a contract with a local trash company that entitles her to have her trash picked up twice a week. A year later, the trash company transferred her contract to a new trash service provider. This contract assignment effectively makes Anna’s contract now with the new service provider.

Hasina enters a contract with a national phone company for cell phone service. The company goes into bankruptcy and needs to close its doors but decides to transfer all current contracts to another provider who agrees to honor the same rates and level of service. The contract assignment is completed, and Hasina now has a contract with the new phone company as a result.

Here is an article where you can find out more about contract assignments.

assignments contracts law

Assignment of Contract in Real Estate

Assignment of contract is also used in real estate to make money without going the well-known routes of buying and flipping houses. When real estate LLC investors use an assignment of contract, they can make money off properties without ever actually buying them by instead opting to transfer real estate contracts .

This process is called real estate wholesaling.

Real Estate Wholesaling

Real estate wholesaling consists of locating deals on houses that you don’t plan to buy but instead plan to enter a contract to reassign the house to another buyer and pocket the profit.

The process is simple: real estate wholesalers negotiate purchase contracts with sellers. Then, they present these contracts to buyers who pay them an assignment fee for transferring the contract.

This process works because a real estate purchase agreement does not come with the obligation to buy a property. Instead, it sets forth certain purchasing parameters that must be fulfilled by the buyer of the property. In a nutshell, whoever signs the purchase contract has the right to buy the property, but those rights can usually be transferred by means of an assignment of contract.

This means that as long as the buyer who’s involved in the assignment of contract agrees with the purchasing terms, they can legally take over the contract.

But how do real estate wholesalers find these properties?

It is easier than you might think. Here are a few examples of ways that wholesalers find cheap houses to turn a profit on:

  • Direct mailers
  • Place newspaper ads
  • Make posts in online forums
  • Social media posts

The key to finding the perfect home for an assignment of contract is to locate sellers that are looking to get rid of their properties quickly. This might be a family who is looking to relocate for a job opportunity or someone who needs to make repairs on a home but can’t afford it. Either way, the quicker the wholesaler can close the deal, the better.

Once a property is located, wholesalers immediately go to work getting the details ironed out about how the sale will work. Transparency is key when it comes to wholesaling. This means that when a wholesaler intends to use an assignment of contract to transfer the rights to another person, they are always upfront about during the preliminary phases of the sale.

In addition to this practice just being good business, it makes sure the process goes as smoothly as possible later down the line. Wholesalers are clear in their intent and make sure buyers know that the contract could be transferred to another buyer before the closing date arrives.

After their offer is accepted and warranties are determined, wholesalers move to complete a title search . Title searches ensure that sellers have the right to enter into a purchase agreement on the property. They do this by searching for any outstanding tax payments, liens , or other roadblocks that could prevent the sale from going through.

Wholesalers also often work with experienced real estate lawyers who ensure that all of the legal paperwork is forthcoming and will stand up in court. Lawyers can also assist in the contract negotiation process if needed but often don’t come in until the final stages.

If the title search comes back clear and the real estate lawyer gives the green light, the wholesaler will immediately move to locate an entity to transfer the rights to buy.

One of the most attractive advantages of real estate wholesaling is that very little money is needed to get started. The process of finding a seller, negotiating a price, and performing a title search is an extremely cheap process that almost anyone can do.

On the other hand, it is not always a positive experience. It can be hard for wholesalers to find sellers who will agree to sell their homes for less than the market value. Even when they do, there is always a chance that the transferred buyer will back out of the sale, which leaves wholesalers obligated to either purchase the property themselves or scramble to find a new person to complete an assignment of contract with.

Learn more about assignment of contract in real estate by checking out this article .

Who Handles Assignment of Contract?

The best person to handle an assignment of contract is an attorney. Since these are detailed legal documents that deal with thousands of dollars, it is never a bad idea to have a professional on your side. If you need help with an assignment of contract or signing a business contract , post a project on ContractsCounsel. There, you can connect with attorneys who know everything there is to know about assignment of contract amendment and can walk you through the whole process.

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Contract Assignments

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  What is a Contract Assignment?

In a contract assignment, one of the two parties to a contract may transfer their right to the other’s performance to a third party. This is known as “contract assignment.” Generally, all rights under a contract may be assigned. A provision in the contract that states the contract may not be assigned usually refers to the delegation of the assignor’s (person who assigns) duties under that contract, not their rights under the contract. 

In modern law, the phrase “assignment of contract” usually means assignment of both rights and duties under a contract.

Who are the Various Parties Involved in a Contract Assignment?

How is a contract assignment created, when is a contract assignment prohibited, which parties are liable to each other in a contract assignment, are there issues with multiple assignments, should i hire a lawyer for contract assignments.

In a contract, there are two parties to the agreement, X and Y. The parties may agree to let X assign X’s rights to a third party . Once the third party enters the picture, each party has a special name. For instance, suppose X, a seller of bookmarks, contracts with Y, a purchaser of bookmarks. Y desires to have Y’s right to X’s performance (the sale of bookmarks on a monthly basis) to another person. 

This third person, Z, is called the assignee. X is called the obligor , and Y is called the assignor , since Y has assigned its right to X’s performance . X, the obligor, is obligated to continue to perform its duties under the agreement.

There are no “magic words” needed to create an assignment. The law simply requires that the would-be assignor have an intent to immediately and completely transfer their rights in the agreement. In addition, writing is typically not required to create an assignment. As long as X and Y both adequately understand what right is being assigned, an assignment is created. 

Words that indicate a transfer is to take place suffice, such as “I intend to transfer my rights under this agreement,” or, “I intend to give my rights to Z,” or “I intend to confer an assignment on Z.” In addition,consideration,which is a bargained-for exchange required for a contract to be valid, is not required for assignment.

In certain instances, an assignment of contract rights can be prohibited. If the contract contains a clause prohibiting assignment of “the contract,” without specifying more, the law construes this language as barring only delegation of the assignor’s duties, not their rights. If the assignment language states “assignment of contractual rights are prohibited,” the obligor may sue for damages if the assignor attempts to assign the agreement. If the contract language states that attempts to assign “will be void,” the parties can bar assignment.of rights.

Under modern contract law, the phrase “I assign the contract” is usually interpreted to mean that one is assigning rights and duties. What is an assignment of duties? An assignment of duties occurs where Y, called the obligor or delegator, promises to perform for X, the obligee. Y then delegates their duty to perform to Z, the delegate. Under the law, most duties can be delegated. 

There are exceptions to this rule. Delegation can be prohibited when:

  • The duties to be performed involve personal judgment and special skill (e.g., a portrait, creation of a custom-made dress). 
  • “Personal judgment” is the exercise of some kind of superior judgment when it comes to determining how, when, or where to do something. Examples of individuals who exercise personal judgment include talent scouts and financial advisors.  Special skill is the unique ability to create a good or perform a service. A delegator can be prohibited from delegating duties when it is that specific delegator’s services are sought. For example, if the services of a specific famous chef are sought, and the original agreement was entered into on the understanding that the chef was hired for their specific talent, the delegator may not delegate the services;
  • The assignment fundamentally changes risks or responsibilities under the agreement;
  • The assignment is over future rights associated with a future contract that does not currently exist;
  • Delegation would increase the obligation of the obligee. For example, if a shoe manufacturer contracts to deliver soles to a store in the same town as the shoe factory, the other party cannot assign the delivery to a different store in another state. Doing so would impose a greater obligation on the obligee than was originally contemplated;
  • The obligee had placed special trust in the delegator. For example, assume that you have hired a patent attorney, based on that attorney’s significant skill and expertise, to obtain a valuable patent. You have placed special trust in this person, hiring them instead of other patent attorneys, because of their unique expertise. In such a situation, the attorney may not delegate his duties to another attorney (delegate), since the attorney was hired because of one person’s special capabilities;
  • The delegation is of a promise to repay a debt; or
  • The contract itself restricts or prohibits delegation. If the contract states, “any attempt to delegate duties under this contract is void,” a delegation will not be permitted.

In a contract involving assignment of rights, the assignee may sue the obligor. This is because the assignee, once the assignee has been assigned rights, is entitled to performance under the contract. If the obligor had a defense that existed in the original contract between obligor and assignor, the obligor may assert that defense against the assignee. Examples of such defenses include the original contract was not valid because of lack of consideration, or because there was never a valid offer or acceptance).

An assignee may also sue an assignor. Generally, if an assignment is made for consideration,it is irrevocable. Assignments not made for consideration, but under which an obligor has already performed, are also irrevocable. If an assignor attempts to revoke an irrevocable assignment,the assignee may sue for “wrongful revocation.” 

In circumstances involving delegation of duties,an obligee must accept performance from the delegate of all duties that may be delegated. The delegator remains liable on the agreement. Therefore, the obligee may sue the delegator for nonperformance by the delegate. The obligee may sue the delegate for nonperformance, but can only require the delegate to perform if there has been an assumption by the delegate. An assumption by the delegate is a promise that the delegate will perform the delegated duty, which promise is supported by consideration. 

Assignments that are not supported by consideration are revocable. If an initial assignment is revocable, a subsequent assignment can revoke it. If a first assignment is irrevocable, because consideration was present,the first assignment will usually prevail over a subsequent assignment. This means the person who can claim the assignment was first made to them will prevail over someone who claims a subsequent assignment. 

If, however, the second person paid value for the assignment, and entered into the assignment without knowing of the first assignment, the “subsequent”assignee is entitled to proceeds the first judgment against the obligor (the original party who still must perform), in the event such a judgment is issued,

If you have an issue with assignment of rights or duties under a contract, you should contact a contract lawyer  for advice. An experienced business lawyer near you can review the facts of your case, advise you of your rights, and represent you in court proceedings.

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6.4: Assignment, Delegation, and Commonly Used Contracts Clauses

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Learning Objectives

  • Learn about assignment and delegation.
  • Examine novation.
  • Explore restrictions on assignment, exculpatory clauses, noncompete clauses, mandatory arbitration clauses, acceleration clauses, and liquidated damages clauses.
  • Explore the parol evidence rule.

What if you formed a contract with a rock ’n’ roll band for its services? Specifically, you wanted the band to play at your nightclub, because you thought that your customers would enjoy the band enough to pay to see it perform. You hired this specific band because you heard that it drew large crowds of paying customers. Imagine your surprise when, as you anticipate the band’s performance, you discover that another band—one you have never heard of—has come to play instead of the original contracting band. On inquiry, you learn that the original band transferred its duties to perform to a lesser-known band. Can it do that?

Contract elements—the terms of the contract—are important. They may, among other things, foreclose your ability to bring a complaint in court, they may render you unable to be hired in your profession (at least within certain boundaries), or they may limit liability to a party that had a role in causing injury to you. If you are not aware of these elements, then you may face an unpleasant surprise if you act in a way contrary to the restrictions imposed by those terms. Likewise, contracts possess certain qualities that prohibit parties from acting in certain ways, unless those qualities are expressly waived. This section identifies common properties of contracts, as well as commonly used elements of contracts. If you are negotiating a contract and you do not like a term, then you should not agree to it. In law, there is a presumption that you have read, understood, and agreed to each and every term of any contract to which you are a party. Arguing that you did not understand or that you did not approve of a particular term in the contract will not be a valid excuse to performance. You should know what you can expect when you enter into a contract. Are you getting the band that you wanted to hire to play in your nightclub, or are you really getting any band that the original band happens to transfer its duties to?

As a preliminary matter, it is important to realize that contracts are, by law, assignable and delegable. This means that the rights conveyed by the contract may be transferred to another party by assignment, unless an express restriction on assignment exists within the contract, or unless an assignment would violate public policy. Likewise, the duties imposed on a party may be transferred to another party by delegation, unless the contract expressly restricts delegation, or there is a substantial interest in personal performance by the original party to the contract, or if delegation would violate public policy. In the case of a band hired to perform at a nightclub, an argument could be made that the original band cannot delegate its duties under the contract because there was a substantial interest in personal performance by the original band. This would render the contract nondelegable. To be on the safe side, your contract with that band should have had a clause expressly prohibiting delegation.

Many students have seen restrictions on assignment in the form of no-sublease clauses in leases with landlords. Do you have a no-sublease clause in your lease? If so, that is a restriction on assignment. This clause is necessary to prevent you from assigning your rights under the lease—your rights to inhabit the premises—to another party. It is necessary for the landlord to include that provision expressly if she wishes to prevent you from subleasing the unit, because there is a presumption in law that assignment is permitted unless it is expressly prohibited by the contract or unless the assignment would violate public policy. Since it is unlikely that letting someone else live in your housing unit in your absence would violate public policy, then the landlord must expressly prohibit the assignment within the original contract if she wishes to prevent tenants from subleasing. A landlord may have a very good reason to wish to prevent subleasing; she may wish to ensure that each tenant is creditworthy prior to allowing the tenant to live in the property.

Note that in delegation and in assignment, the original contracting party is not “off the hook” if it transfers its duties or rights to another party. For instance, if subleasing was not prohibited, and the new tenant assumed the rights and duties imposed by the original contract, the original party to the contract is still liable for the payment of rent. If the subleasing tenant does not pay the rent, the original party to the lease is still liable. The way to excuse oneself from this liability is to form a three-way novation with the original party and the new party, thereby excusing the exiting party from future liability arising under the contract. A novation is essentially a new contract that transfers all rights and duties to the new party to the contract and releases the previous party from any further obligation arising from the original contract.

Restrictions on assignment or delegation are not the only common elements that can be found in contracts. For example, you have probably encountered exculpatory clauses. An exculpatory clause is an express limitation on potential or actual liability arising under the subject matter of the contract. In short, exculpatory clauses are often employed when risk of injury exists. They seek to limit one party’s liability to another. You most certainly have signed exculpatory agreements or contracts containing exculpatory clauses if you have participated in any potentially dangerous activity at a club or with an organized group that could incur liability from injuries suffered by its patrons or members. For example, if you join a kayaking club, you will most likely be asked to sign such an agreement to “hold harmless” the club in the event of any accident or injury. However, despite the existence of an exculpatory clause, liability will not be limited (that is, the liability limitations will be unenforceable) when the party who would benefit from the limitation on liability acted with gross negligence, committed an intentional tort, or possessed greatly unequal bargaining power, or if the limitation on liability violates public policy. Imagine that you signed an agreement to engage in kayaking activities with a kayaking group, but the leader of the group battered you with her oar because she was angry with you for mishandling your kayak. Since battery is an intentional tort, the exculpatory clause will not protect the kayaking organization from liability it incurred through the actions of its employee.

Another common contract element that you may have encountered is a noncompete clause. A noncompete clause attempts to restrict competition for a specified period of time, within a certain geographic region, and for specified activities. Noncomplete clauses are generally valid against the party who signed it if the time, place, and scope are reasonable. These are very common clauses in employment contracts, particularly where the duties involved in employment are likely to involve trade secrets or other proprietary information that the company wishes to protect.

A mandatory arbitration clause is very common in consumer contracts and employment contracts. You have certainly subjected yourself to the restrictions imposed by these clauses if you have signed a contract for a credit card. Mandatory arbitration clauses require parties to a contract that contains such a clause to submit to mandatory arbitration in the event of a dispute arising under the contract. Mandatory arbitration clauses frequently foreclose any possibility of appealing arbitration awards in court.

An acceleration clause commonly exists in contracts where periodic payments are contemplated by the agreement. For example, if you signed a lease for your housing unit, then you most likely pay rent on a month-to-month basis. If you breached your lease, you would still owe rent for each subsequent month contemplated by the lease agreement. This means that your landlord would have new injury every month that you did not pay. An acceleration clause accelerates all payments due under the contract on breach. This allows the injured party—in this case, the landlord—to sue for all damages due for unpaid rent under that contract at once, rather than having to bring a new suit each month to seek monthly unpaid rent.

A liquidated damages clause allows parties to set the amount of damages in the event of breach. Agreeing to a damage amount before any breach occurs can save money and time spent litigating. Providing that the liquidated damages clause does not look like a penalty, the clause will be valid and enforced by a court that hears a dispute arising under the contract. For example, imagine that you entered into a contract for the sale of your car. If the liquidated damages clause provided for two thousand dollars of damages in the event of breach, that will probably be a valid liquidated damages clause, providing that your car is an “average” car. However, if the liquidated damages clause provided for one million dollars of damages payable by the breaching party, then that would not be enforceable by the court because it looks like a penalty. The proposed liquidated damages far exceed the value of the car that is the subject of the agreement.

Of course, there are additional common elements to contracts. This is not an exhaustive study of possible provisions, though it is a list of commonly encountered elements. For example, time of performance is often included as a separate provision. However, time for performance is an essential element in common-law contract formation, and without it, the contract may fail due to lack of definite and certain terms in formation.

A major assumption made about a written contract is that it is integrated, which means that it contains the entire expression of the parties’ agreement. That means that any statements made before the parties signed the contract are not part of the contract, unless those statements are memorialized in the contract itself. In fact, any statements or actions that are not captured within the four corners of the contract are considered parol evidence, and they will not be used to interpret the meaning of the contract.

Key Takeaways

Parties to contracts must not only take care to form the agreement so that it is legally enforceable, but they must also be aware of the properties of contracts in general, as well as specific provisions contained within contracts to which they are a party. Properties of contracts include ability to assign, delegate, and exclude parol evidence. Several types of contracts clauses are commonly used to restrict rights and limit liability.

Exercise \(\PageIndex{1}\)

  • Think of an example of an exculpatory clause that you have signed. For what type of activity would you be unwilling to sign an exculpatory clause? If your refusal to sign the exculpatory clause or agreement prevented you from participating in that activity, would you still refuse to sign it?
  • Do you think that too many limitations and restrictions can be placed on parties in a contract? Should there be more government regulation and standardization of contract terms between private parties? Why or why not?

Assessing Assignability: Transferring Contractual Rights or Obligations | Practical Law

assignments contracts law

Assessing Assignability: Transferring Contractual Rights or Obligations

Practical law legal update 5-546-6326  (approx. 7 pages).

  • An intended transfer is of the type that is prohibited by law or public policy (see Practice Note, Assignability of Commercial Contracts: Statutory and Public Policy Exceptions ).
  • The parties expressly agree to restrict transferability (see Practice Note, Assignability of Commercial Contracts: Contractual Anti-assignment and Anti-delegation Clauses ).
  • Breaching the contract.
  • Making an ineffective and invalid transfer.

Distinguishing Between Assignment and Delegation

  • The assignment of rights to receive performance.
  • The delegation of duties to perform.

Characteristics of Assignments

  • The right to receive performance from the assignor.
  • Its remedies against the assignor for any failure to perform.

Characteristics of Delegation

The general rule governing assignment and delegation.

  • Most assignments of contractual rights.
  • Many delegations of contractual performance.
  • Assignments and delegations that violate public policy or law.
  • Assignments of rights or delegations of performance that are personal in nature.
  • Contracts with anti-assignment or anti-delegation clauses.

Contracts That Present the Greatest Challenges

  • Personal services contracts (see Personal Services Contracts ).
  • Non-exclusive intellectual property licenses (see Intellectual Property Licenses ).
  • Contracts with anti-assignment and anti-delegation clauses (see Contracts With Anti-assignment and Anti-delegation Contract Clauses ).

Personal Services Contracts

Intellectual property licenses, contracts with anti-assignment and anti-delegation clauses, is a change of control an assignment.

  • Contains an anti-assignment and anti-delegation clause expressly restricting a change of control.
  • States that a change in management or equity ownership of the contracting party is deemed to be an assignment.

When Does an Involuntary Transfer Trigger a Restricted Transfer?

  • A contractual anti-assignment and anti delegation clause applies to a specific type or transfer.
  • The transfer is permissible, with or without a contractual anti-assignment and anti-delegation provision.

Drafting and Negotiating Anti-assignment and Anti-delegation Clauses

  • Directly addressing assignment of rights and delegation of performance.
  • Clarifying the universe of restricted transfers.
  • Designating the non-transferring party's consent rights.
  • Specifying any exceptions to non-transferability.
  • Requiring notification of a permitted transfer.
  • Including a declaration that impermissible transfers are void.
  • Adding a novation to the anti-assignment and anti-delegation provision.

Primary tabs

Assignee is a person to whom a right is transferred by the person holding such rights under the transferred contract (the “assignor”).  The act of transferring is referred to as “ assigning ” or “ assignment ” and is a concept found in both  contract  and  property  law. 

Contract Law  

Under contract law, when one party assigns a contract, the assignment represents both: (1) a transfer of rights; and (2) a delegation of  duties .  For example, if A contracts with B to teach B guitar for $50, A can assign this contract to C.  Here, A has both: assigned A’s rights under the contract to receive the $50 to C, and delegated A’s  duty  to teach guitar to C.  In this example, A is the “assignor” because he/she assigns the contract to C. A is also the “primary obligor ,” meaning he/she will still be liable to B if C fails to teach B guitar. C is the “assignee,” since C is the party to whom A transfers the contract. C is also the “secondary obligor,” since he/she must perform the  obligations  to B. B is the ultimate recipient of the duty under the assignment, and is the “ obligee .”

There are a few notable rules regarding assignments under  contract  law.  First, if an individual has not yet secured the contract to perform duties to another, he/she cannot assign his/her future right to an assignee.  That is, if A has not yet contracted with B to teach B guitar, A cannot  assign  his/her rights to C.  Second, rights cannot be assigned when they materially change the obligor’s duty and rights.  Third, the primary  obligor  can sue the  assignee directly if the  assignee  does not perform the assigned duty. In guitar assignment example, if C does not teach B guitar, A can sue C for any liability that A incurs as a result of C’s failure to perform the assigned contract. Fourth, if the promised performance requires a rare genius or skill, then the primary obligor cannot assign the contract.  

Lastly, a related concept is  novation , which is when the secondary obligor substitutes and releases the primary obligor.  If  novation  occurs, then the primary obligor’s duties are extinguished under the contract. However,  novation  requires the obligee’s  consent . In the guitar example, if A, B, and C agree to novation, then A would not be liable if C fails to teach B guitar.

Property Law

Under  property  law, assignment typically arises in landlord-tenant situations.  For example, A might be renting from landlord B but wants C, a new tenant, to take over the lease.  In this scenario, A might be able to choose between  assigning  and  subleasing  the property to C.  If  assigning , A would be giving C the entire balance of the term, with no reversion to anyone. If subleasing , A would be giving C for a limited period of the remaining term.  Significantly, under assignment, C would have  privity  of  estate  with the landlord, while under a sublease, C would not.

[Last updated in December of 2021 by the Wex Definitions Team ]

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What Is an Assignment of Contract?

Assignment of Contract Explained

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Assignment of contract allows one person to assign, or transfer, their rights, obligations, or property to another. An assignment of contract clause is often included in contracts to give either party the opportunity to transfer their part of the contract to someone else in the future. Many assignment clauses require that both parties agree to the assignment.

Learn more about assignment of contract and how it works.

What Is Assignment of Contract?

Assignment of contract means the contract and the property, rights, or obligations within it can be assigned to another party. An assignment of contract clause can typically be found in a business contract. This type of clause is common in contracts with suppliers or vendors and in intellectual property (patent, trademark , and copyright) agreements.

How Does Assignment of Contract Work?

An assignment may be made to anyone, but it is typically made to a subsidiary or a successor. A subsidiary is a business owned by another business, while a successor is the business that follows a sale, acquisition, or merger.

Let’s suppose Ken owns a lawn mowing service and he has a contract with a real estate firm to mow at each of their offices every week in the summer. The contract includes an assignment clause, so when Ken goes out of business, he assigns the contract to his sister-in-law Karrie, who also owns a lawn mowing service.

Before you try to assign something in a contract, check the contract to make sure it's allowed, and notify the other party in the contract.

Assignment usually is included in a specific clause in a contract. It typically includes transfer of both accountability and responsibility to another party, but liability usually remains with the assignor (the person doing the assigning) unless there is language to the contrary.

What Does Assignment of Contract Cover?

Generally, just about anything of value in a contract can be assigned, unless there is a specific law or public policy disallowing the assignment.

Rights and obligations of specific people can’t be assigned because special skills and abilities can’t be transferred. This is called specific performance.   For example, Billy Joel wouldn't be able to transfer or assign a contract to perform at Madison Square Garden to someone else—they wouldn't have his special abilities.

Assignments won’t stand up in court if the assignment significantly changes the terms of the contract. For example, if Karrie’s business is tree trimming, not lawn mowing, the contract can’t be assigned to her.

Assigning Intellectual Property

Intellectual property (such as copyrights, patents, and trademarks) has value, and these assets are often assigned. The U.S. Patent and Trademark Office (USPTO) says patents are personal property and that patent rights can be assigned. Trademarks, too, can be assigned. The assignment must be registered with the USPTO's Electronic Trademark Assignment System (ETAS) .  

The U.S. Copyright Office doesn't keep a database of copyright assignments, but they will record the document if you follow their procedure.

Alternatives to Assignment of Contract

There are other types of transfers that may be functional alternatives to assignment.

Licensing is an agreement whereby one party leases the rights to use a piece of property (for example, intellectual property) from another. For instance, a business that owns a patent may license another company to make products using that patent.  

Delegation permits someone else to act on your behalf. For example, Ken’s lawn service might delegate Karrie to do mowing for him without assigning the entire contract to her. Ken would still receive the payment and control the work.

Do I Need an Assignment of Contract?

Assignment of contract can be a useful clause to include in a business agreement. The most common cases of assignment of contract in a business situation are:

  • Assignment of a trademark, copyright, or patent
  • Assignments to a successor company in the case of the sale of the business
  • Assignment in a contract with a supplier or customer
  • Assignment in an employment contract or work for hire agreement

Before you sign a contract, look to see if there is an assignment clause, and get the advice of an attorney if you want to assign something in a contract.

Key Takeaways

  • Assignment of contract is the ability to transfer rights, property, or obligations to another.
  • Assignment of contract is a clause often found in business contracts.
  • A party may assign a contract to another party if the contract permits it and no law forbids it.

Legal Information Institute. " Assignment ." Accessed Jan. 2, 2021.

Legal Information Institute. " Specific Performance ." Accessed Jan. 2, 2021.

U.S. Patent and Trademark Office. " 301 Ownership/Assignability of Patents and Applications [R-10.2019] ." Accessed Jan. 2, 2021.

Licensing International. " What is Licensing ." Accessed Jan. 2, 2021.

Assignment Law: Everything You Need to Know

In legal terms, the meaning of an assignment is a contractual obligation to transfer a property title or right from one party to another. 3 min read updated on February 01, 2023

The term assignment law is used in the law of real estate and in the law of contracts. In both instances, it relates to the transfer of rights held by one party (the assignor) to another party (the assignee).

Assignment Law

In legal terms, the meaning of an assignment is a contractual obligation to transfer a property title or right from one party to another. Generally, the assignment is transferred based on an entire interest in the property, chattel, estate, or other item assigned.

A grant is different from an assignment in that an assignment refers to the right to transfer the property. This is considered an intangible right. On the other hand, the grant is concerned about the physical transfer of property. This is a tangible right. For example, a payee can assign their rights to collect a note payment to a bank. 

The terms of the contract must be analyzed to determine if the right of assignment is prohibited. For example, a property owner may allow a lease to be assigned, ordinarily along with an assumption agreement, where the new tenant is now responsible for the payments and duties of the lease.

The holder of a trademark may transfer it, either by giving or selling their interest in the trademark to another party. This is referred to as an assignment. The party that receives the benefit is called the assignee. Once transferred, the assignee has the ability to exclude others from using their trademark.

In order for the assignment to be enforceable, it must be in writing and have the goodwill of the company attached to the mark. For an assignment to be effective, it must contain the fundamental aspects of a contract, such as:

  • Parties with legal capacity
  • Legality of object
  • Consideration consent

A contract assignment occurs when a party assigns their contractual rights to a third party. The benefit the issuing party would have received from the contract is now assigned to the third party. The party appointing their rights is referred to as the assignor, while the party obtaining the rights is the assignee. Essentially, the assignor prefers that the assignee reverses roles and assumes the contractual rights and obligations as stated in the contract. Before this can occur, all parties to the original contract must be notified.

How Assignments Work

The specific language used in the contract will determine how the assignment plays out. For example , one contract may prohibit assignment, while another contract may require that all parties involved agree to it before proceeding. Remember, an assignment of contract does not necessarily alleviate an assignor from all liability. Many contracts include an assurance clause guaranteeing performance. In other words, the initial parties to the contract guarantee the assignee will achieve the desired goal.

When Assignments Will Not Be Enforced

The following situations indicate when an assignment of a contract is not enforced:

  • The contract specifically prohibits assignment
  • The assignment drastically changes the expected outcome
  • The assignment is against public policy or illegal

Delegation vs. Assignment

Occasionally, one party in a contract will desire to pass on or delegate their responsibility to a third party without creating an assignment contract. Some duties are so specific in nature that they cannot be delegated. Adding a clause in the contract to prevent a party from delegating their responsibilities and duties is highly recommended.

Three Steps to Follow if You Want to Assign a Contract

There are three main steps to take if you're looking to assign a contract:

  • Make sure the current contract does not contain an anti-assignment clause
  • Officially execute the assignment by transferring the parties' obligations and rights
  • Notify the obligor of the changes made

Once the obligor is notified, the assignor will effectively be relieved of liability.

Anti-Assignment Clauses

If you'd prefer not to allow the party you're doing business with to assign a contract, you may be able to prevent this from occurring by clearly stating anti-assignment clauses in the original contract. The three most common anti-assignment clauses are:

  • Consent required for assignment
  • Consent not needed for new owners or affiliates
  • Consent not unreasonably withheld

Based on these three clauses, no party in the contract is allowed to delegate or assign any obligations or rights without prior written consent from the other parties. Any delegation or assignment in violation of this passage shall be deemed void. It is not possible to write an anti-assignment clause that goes against an assignment that is issued or ordered by a court.

If you need help with assignment law, you can  post your job  on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb. 

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  • Assignment of Rights and Obligations Under a Contract
  • Assignment of Rights Example
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Next City Lawyer

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The complete guide to training contracts for international students.

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Who are Next CIty Lawyer?

We are a team of qualified lawyers from US, Magic Circle and Silver Circle law firms law firms.  We publish articles like this one every fortnight to give you the inside scoop on how to secure your training contract.

With years of experience analysing and reviewing documents for some of the world's most sophisticated clients, we've channeled the same level of care and attention into curating our database of successful applications to world's best commercial law firms.

Introduction

We hate to say it, but a sad truth in the legal world is that being an international student makes it harder to get a training contract .  Many law firms do not want to incur the additional expense and administrative burden of sponsoring trainees and so miss out on the amazing international talent that exists in the UK.

We have prepared this guide to teach you how to maximise your training contract chances as an international student by explaining:

  • The Visa System
  • Differences for EU/EEA/Swiss Students
  • Visa Options
  • Which Firms DO and DO NOT Hire International Students
  • Advice for All Other Firms
  • Using Your International Status as a Strength

1. The Visa System

As of 2019 there were c.560k international students in the UK ( Higher Education Statistics Agency ).  Of those, c.5k international students are enrolled in undergraduate law degrees ( Law Society ). We expect this number to continue to grow as UK universities are world renowned and the City offers arguably the best legal training on the planet (without requiring the extortionate tuition fees of US universities).

Foreign students already in the UK will be familiar with the visa process for studying and will need to then transfer visas once their degree has been completed if they want to stay and work.  Similarly, international candidates who have studied abroad but want to now train as a solicitor in the UK will also require a visa.

2. Differences for EU/EEA/Swiss Students

Prior to Brexit, EU, Swiss, Norwegian, Icelandic and Liechtenstein citizens had equal rights to those of UK citizens to study and work in the UK.  

Citizens from these countries (“Eligible Persons”) had until 30 June 2021 to apply for indefinite leave to remain in the UK or Northern Ireland under the free EU Settlement Scheme ( GOV.UK ).

If you did not apply in time, you can still apply if either:

  • you are a family member of an Eligible Person who was living in the UK by 31 December 2020
  • the relevant Eligible Person has settled or pre-settled status, have applied and are waiting for a decision or are eligible for settled or pre-settled status
  • you are joining them in the UK or or after 1 April 2021
  • you have reasonable grounds for being unable to apply by 30 June 2021 (e.g., you had an illness,  were the victim of domestic abuse, you did not have internet access or access to the relevant documents, etc.)

If you qualify under one of these exceptional categories, it is free to apply.

Under the EU Settlement Scheme, successful applicants can:

  • work in the UK (after 30 June 2021)
  • use the NHS for free
  • enrol in education or continue studying
  • access public funds such as benefits and pensions, if you’re eligible for them
  • travel in and out of the UK

3. Visa Options

A number of options exist for all other international students to work in the UK.  The below options are the ones most commonly used by international (i.e. non-EU/EEA/Swiss) students, but a full list can be seen on the UK government’s website ( GOV.UK ).

  • Graduate Visa
  • Youth Mobility Scheme visa
  • Ancestry Visa
  • Skilled Worker Visa

(A) Graduate Visa

A UK Graduate visas is intended for international students that are studying in the UK on a valid student visa who wish to work in the UK for a short period after graduating.

You can apply for a Graduate route visa ( GOV.UK ) if:

  • you are based in the UK at the time of applying
  • your current visa is a Student visa or a Tier 4 (General) student visa
  • you studied a UK undergraduate, post-graduate, Graduate Diploma in Law, the Legal Practice Court or the Bar Practice Course for at least 12 months or the full length of the course (whichever is shorter)
  • your education provider has told you that you have successfully completed your course

As of December 2021, the cost to apply is £700.  You must also pay a health surcharge of £624 for each year that you stay in the UK.

You do not need to have a job offer in order to apply for this visa.  This is helpful if you do not yet have a training contract secured as it will allow you to work in another role (e.g., as a paralegal) in the meantime.

The Graduate visa lasts for two years. If you have a PHD or doctoral qualification, it will last for three years.

In theory, this is sufficient time to carry out a training contract.  In practice, it is unlikely to be viable for use during your training contract because the date on which the application is approved is unlikely to coincide exactly with your training contract period.  Moreover, law firms recruit trainees on the basis that they will stay following qualification .  As such, they are likely to require that you have a Skilled Worker visa (see below) or alternative long-term right to work in the UK.

(B) Youth Mobility Scheme visa

You can apply for a Youth Mobility Scheme visa ( GOV.UK ) if you:

  • want to live and work in the UK for up to two years
  • are aged 18 to 30
  • have £2,530 in savings
  • are a citizen of of one of the following countries:
  • New Zealand
  • are a citizen of one of the following countries and are successfully selected in the Youth Mobility Scheme ballot (c.800 places available per country):
  • South Korea
  • or, instead of being a citizen of the above countries, are a:
  • British overseas citizen
  • British overseas territories citizen
  • British national (overseas)

This visa allows you to stay and work in the UK for two years. As of June 2020 the cost to apply for this visa is £244.  You must also pay a healthcare surcharge which is usually £470 per year that you stay in the UK. The decision usually takes around three weeks.

You can work for any employer you choose with this visa.  This visa will last for two years.  In theory, this is sufficient to carry out a training contract, but in practice it is unlikely that the dates will perfectly coincide.  

Most future trainees apply instead for a Skilled Worker visa (see below).  However, this is a good option if you do not yet have a job offer secured as it will allow you to work as a paralegal or in other role while you try to obtain a training contract.

(C) Ancestry Visa

A UK Ancestry Visa ( GOV.UK ) may be available if you:

  • are a Commonwealth citizen, a British overseas citizen, a British overseas territories citizen or a citizen of Zimbabwe
  • are applying from outside the UK
  • are able to prove that one of your grandparents was born in the UK
  • are able and planning to work in the UK
  • meet the other eligibility requirements:
  • you are over 17
  • you have enough money to support yourself
  • plan to work in the UK

This visa allows you to stay and work in the UK for five years.  You can then either apply to extend your visa for a further five years or apply for indefinite leave to remain.

As of December 2021, the cost to apply for this visa is £516 and the decision usually takes around three weeks.

You can work for any employer you choose with this visa.

(D) Skilled Worker Visa

As a future trainee solicitor, you can apply for a Skilled Worker visa ( GOV.UK ) if you:

  • have a confirmed job offer by a UK employer for a job as a trainee solicitor that pays at least £34,300 per year (which is listed as the “going rate” for solicitors, including trainee solicitors, on GOV.UK under code 2413)*
  • have a certificate of sponsorship from your employer with information about the role you have been offered in the UK
  • prove your knowledge of English
  • have at least £1,270 in savings to support yourself when you arrive in the UK

*Note that there are other roles which are eligible for the Skilled Worker visa on the GOV.UK website

You need the law firm to sponsor you in order to be offered this visa, which is an additional financial and administrative burden that some smaller commercial law firms are not willing to meet.  The cost to the firm for acting as a sponsor is in addition to the fee that you have to pay (unless your employer agrees to pay it on your behalf, which many larger law firms will do).

As of December 2021, the cost to apply for this visa is £1,408 (which is the fee for a visa of more than three years).  There is also a healthcare surcharge to pay which is usually £624 per year that you stay in the UK.  The decision usually takes around three weeks.

You will be eligible for a small fee reduction (£55) if you come from one of the EU countries listed here .

This is the most common visa that international trainees use.  However, it comes with a couple of drawbacks:

  • You can only work for the employer who is sponsoring you. Any new employer will need to take over that sponsorship (which many law firms are not willing to do)
  • You need to update the Home Office of any changes in employment, address or serious personal circumstances

Another major issue with procuring these visas on the employer side is that in order for a law firm to be approved as able to sponsor you it must show that you meet a certain number of ‘points’, as the UK uses a points test when vetting visa applications.  Anecdotally we have heard that post-Brexit it has become increasingly difficult to attain the required points.  Employers currently have to demonstrate that the foreign candidate is filling a job no UK candidate is able to.  While this is obviously not the case at trainee level (no offence!), it often means the law firm will need to advertise the role on job boards and undertake HR work to show this.  So it comes as no surprise that many firms aren’t willing to go through all of this work in order to sponsor.

Group of international students graduating

4. Which Firms DO and DO NOT Hire International Students

Fortunately you do NOT have to waste hours roaming through Google or emailing graduate recruitment teams to find out who will or will not sponsor international applicants!

As of December 2021, here is a list of verified firms that will sponsor international applicants :

  • Slaughter & May
  • Clifford Chance
  • Freshfields
  • Allen & Overy (We have heard from a source they are no longer sponsoring applicants but are sceptical this is true)
  • Travers Smith
  • Hogan Lovells
  • Norton Rose
  • Baker McKenzie
  • Holman Fenwick Williams
  • Watson Farley Williams
  • Stephenson Harwood
  • Fieldfisher
  • Burgess Salmon
  • Farrer & Co

Please note that a number of other firms will sponsor applicants but we have only included ones we have verified .  Also note that most US law firms in London will also sponsor (as they have, or still do, sponsor a number of American lawyers in their London office already) but they are not included in this list.  And a final warning is that while all of these firms do sponsor applicants, you would expect that the bigger firms on this list are even more likely to do (e.g. Clifford Chance will routinely sponsor far more trainees and lawyers than DWF will).

5. Advice for All Other Firms

Before you apply to ANY other law firm you should email their graduate recruitment team to check if they are willing to sponsor trainees . If they are not, this should be an immediate red flag because sorting out your own visa situation per the ancestry visa or Tier 5 visa will be less appealing to them - and feel like an extra risk on their part - and greatly reduces your chances of getting a training contract with that firm.  

We would recommend you simply do not apply to firms who do not sponsor .  Even if you get very clear guidance from their graduate recruitment team that your application will still be considered and will not be disadvantaged, is it really worth spending 8-10 hours of your time on the application when there are so many other great firms out there?

6. Using Your International Status as a Strength

Group of international students chatting while enjoying a drink

If you know the firm will sponsor trainees then this is excellent news! This means the firm understands the value of international talent and is willing to pay a price to get the best people available.

UK law firms are less likely to be familiar with your grades if they deviate from the GCSE/A-Level construct.  While most law firms are familiar with IB scores, you will need to explain how your grades equate to the UK equivalent.  

Moreover, while many UK applicants will have fairly similar extracurriculars and work experience, you can leverage your experience to stand out from the crowd.  Knowing how to flush out the key details here without showing off is a bit of an art, but there are some easy tips to excel.  For instance, you should put your achievements in context to help the recruiter understand how to evaluate them .  It’s meaningless to say you were awarded a scholarship; you must say “X scholarship awarded to the top 4 students out of a class of 1,000 students”.  This is true for all applications regardless of your background, but it’s particularly helpful as an international student where the recruiter may not be familiar with your achievements.

So, what next?

If you are ready to move from research to action, you should look at our application database BEFORE you put pen to paper on your applications. You wouldn't walk into an exam hall without carefully reviewing past papers.  It's exactly the same with applications to law firms. If you fail to prepare, you prepare to fail.

Most candidates read a few well-intentioned but obvious articles on how to apply to law firms.  Most candidates then spend a couple of hours writing an application before optimistically submitting it.  But most candidates don't even get an interview.  Every year, thousands of candidates are part of the 90% that are rejected at first round.

Join us as part of the successful 10% instead. Let us give you an unfair advantage: through our comprehensive analysis of successful applications to every major law firm, our qualified lawyers will break down the ingredients of a phenomenal application.  We will help you beat the odds, secure your interview and then avoid final-round failure at your assessment centre.

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Hong Kong's Chief Executive John Lee Ka-chiu applauds with lawmakers following the passing of the Basic Law Article 23 legislation in Hong Kong.

Article 23: China hits back at criticism of Hong Kong’s hardline new security law

Beijing dismisses chorus of concern from western governments over punitive new law as slander

China has accused western governments and the United Nations of slander after they criticised Hong Kong’s new national security law , which was rushed through the city’s pro-Beijing parliament this week.

The law, known as Article 23 , covers newly defined acts of treason, espionage, theft of state secrets, sedition and foreign interference. Critics said it was ushering in a “new era of authoritarianism”, would further erode the rights and freedoms of residents, and would scare off international business and investment.

US state department deputy spokesperson Vedant Patel said on Tuesday the US believes the law has the potential to accelerate the closing of a once open society. Patel said the crimes outlined in the legislation are poorly defined and that Washington was analysing the potential risks to US citizens and American interests.

The UK, Australia, Japan, Canada and the UN also lodged concerns, while the EU said in a statement the new law had the potential to “significantly” affect the work of its office in the city, as well other organisations and companies.

But the criticisms were dismissed by Beijing’s diplomats. China’s ambassador to the US, Liu Pengyu, said the new law was “legitimate, lawful and beyond reproach”.

Liu said it was aimed only at “a tiny minority of individuals that are involved in offences seriously jeopardising national security”.

“Foreign institutions, enterprises and personnel’s normal activities will be fully protected,” he said, saying the US criticism was unfair because it too has many domestic national security laws.

At a regular ministry of foreign affairs press briefing on Wednesday, spokesperson Lin Jian said China’s leadership “strongly deplore and firmly oppose individual countries and organisations’ slandering and smears against the safeguarding national security bill of Hong Kong”.

Lin said the law “upholds the fundamental principle of respecting and protecting human rights and protects in accordance with the law the rights and freedoms which the residents of Hong Kong enjoy”.

The law was passed unanimously in Hong Kong’s opposition-free parliament on Tuesday, after an unusually short 12-day legislative process and a limited public consultation period of just one month. Hong Kong’s chief executive, John Lee, had called for the law to be processed “at full speed”.

Authorities said the vast majority of responses from the public were positive, and dismissed many of the negative submissions as coming from “overseas anti-China organisations” or fugitives.

Emily Lau, a veteran pro-democracy politician and former legislator, told the Guardian on Thursday she felt the low number of negative responses were likely due to “self-censorship” in the city, after a years-long crackdown on opposition. “My feeling is there are people who have other views but dare not speak out,” she said.

Jeffrey Wasserstrom, a professor of Chinese history at the University of California, said the new law seemed to be the government adding “more levers” to their crackdown.

Reuters contributed to this report

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assignments contracts law

‘Love Is Blind’ Contestant Contract Suit Sent to Arbitrator (1)

By Maia Spoto

Maia Spoto

A California state judge sent “Love Is Blind” Season Five contestant Renee Poche’s case against Netflix Inc. and the show’s production company into arbitration on Friday after a heated back-and-forth with Poche’s attorneys.

Poche sued Delirium and Netflix in Los Angeles County Superior Court, alleging that her NDA is unlawful because it seeks to bar her from discussing illegal behavior during the show’s production. Judge Bruce G. Iwasaki said that the section of Poche’s agreement that directs an arbitrator to decide whether her claims should be arbitrated isn’t substantively unconscionable, saying that Poche’s argument centered on the validity of the arbitration agreement as a whole, not the delegation clause specifically.

“You can argue the release is vague, overbroad, doesn’t apply, is against public policy,” Iwasaki said, but those arguments, according to Poche’s contract, should be made in front of an arbitrator.

“I don’t like those kinds of clauses,” Iwasaki said. “I understand what the presumption of the law is. But the court is stuck with the contract. That’s the contract.”

The case is a reckoning for the reality TV industry, Poche’s attorneys said in court filings, where workplace protections are slim, excessive alcohol use abounds, and participants are bound by “draconian” contracts. “Love Is Blind” has already drawn multiple lawsuits from former contestants, whose allegations include labor law violations and false imprisonment.

Poche’s attorney, Bryan Freedman, pushed back hard on Iwasaki, saying that because the contract directs an arbitrator to decide on all claims except those that are barred and released, and “the agreement releases every claim under the sun,” Poche’s claims can’t be sent to an arbitrator.

Iwasaki said from the bench that Freedman’s argument was “backwards,” and that it would apply if the contract’s delegation clause instead said that no claims could go to an arbitrator.

Freedman, of Freedman Taitelman & Cooley LLP, plans to appeal. He made the point multiple times in court that the parties were speaking on a record that an appeals court would review.

“I think it went phenomenally,” Freedman said to reporters after the hearing. “I think the Court of Appeals will absolutely enjoy the argument here.”

Poche Goes Public

Poche said her match, Carter Wall, was a “walking red flag” who never should been allowed on the show. He was violent and emotionally abusive, and used drugs and alcohol heavily, Poche said in her January complaint. Poche and Wall were forced to spend long periods of time alone together, she said.

After Poche went public about her experience on the show, its production company, Delirium TV, started arbitration against her, seeking $4 million because she allegedly broke her non-disclosure agreement, according to the complaint.

Poche, in seeking the preliminary injunction, argues that the NDA left her to “suffer in silence” with the belief that she couldn’t even speak with a therapist about her experience on the show.

Those conditions, coupled with the $4 million bid from Delirium when she did speak out, created a physical, mental, and emotional toll for Poche that requires a preliminary injunction to be lifted, her attorneys said in court filings. Iwasaki denied this motion on Friday.

Delirium in court filings characterized Poche’s decision to break her NDA, which came after she learned she would mostly be edited out of her ‘Love is Blind’ season, as Poche’s “backup plan.”

Poche’s goal on the show “was not long term employment, but love and marriage, and perhaps a bit of fame,” Netflix said in court filings. This goal, coupled with Poche’s existing career as a veterinarian, demonstrate that her arbitration agreement was fair, because Poche wasn’t relying on ‘Love is Blind’ to make a living, Netflix said.

Freedman Taitelman & Cooley LLP and Geragos & Geragos APC represent Poche. Latham & Watkins LLP represents Netflix Inc. Kinsella Holley Iser Kump Steinsapir LLP represents Delirium TV LLC.

The case is Poche v. Delirium TV LLC, Cal. Super. Ct., No. 24STCV00088, hearing 3/22/24.

To contact the reporter on this story: Maia Spoto in Los Angeles at [email protected]

To contact the editors responsible for this story: Stephanie Gleason at [email protected] ; Patrick L. Gregory at [email protected]

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Michigan Senate votes to overhaul state surrogacy law, allow paid contracts

assignments contracts law

Lansing — The Michigan Senate voted Tuesday to revamp the state's law on surrogacy, allowing for agreements, featuring compensation, between women who are willing to become pregnant and those planning to become parents.

Democrats who championed the proposals argued that Michigan needed to update its policies to match new technology and to do away with a criminal ban on paid surrogacy contracts , which made the state an outlier nationally.

But some Republican lawmakers blasted the bills, saying the measures would leave vulnerable women at risk of exploitation. At one point Tuesday, Sen. Thomas Albert, R-Lowell, argued in a speech on the Senate floor that the legislation "fundamentally redefines the family."

Senators in the state Capitol gave speeches on the bills for about an hour on Tuesday amid a national political discussion on in vitro fertilization. That national debate played out after the Alabama Supreme Court ruled in February that frozen embryos can be considered children under Alabama law.

The main bills in the surrogacy package were approved in votes of 22-15, with two Republicans, Sens. Mark Huizenga of Walker and Jon Bumstead of North Muskegon, crossing over to join Democrats in support.

Senate Majority Leader Winnie Brinks, D-Grand Rapids, said the votes were the result of years of hard work.

"It is well past the time that our laws reflect the advancements in assisted reproductive technology that allow Michiganders to have the freedom of fulfilling their dreams of becoming parents and growing their families through surrogacy," Brinks said.

Speaking in the Senate, Brinks shared the story of Tammy and Jordan Myers of Grand Rapids, who used a surrogate to give birth to their twins. But because of Michigan's current law, Tammy and Jordan Myers had to formally adopt their twins, through a two-year legal process, to gain full parental rights .

"There is no good reason to continue subjecting families in our communities to this kind of stress and unnecessary legal hoops," Brinks said. "There is no good reason why parents like Tammy and Jordan should have to adopt their own babies."

The Michigan House has already approved the surrogacy bills, meaning they will likely soon head to Gov. Gretchen Whitmer's for final signatures.

The proposals set up a legal framework and minimum standards for a "surrogacy agreement," which would be able to include "payment of compensation, support and reasonable expenses," according to the text of the bills. Those involved in a "surrogacy agreement" would have to be at least 21 years old and undergo a mental health consultation.

Earlier this month, before a Senate committee, state Rep. Samantha Steckloff, D-Farmington Hills, the lead sponsor of the new Michigan bills, said the state can't ignore recent court decisions that have "seriously imperiled reproductive health for families across the U.S."

The bills would update Michigan law to provide better access to fertility health care and safeguard parents whose babies are born through assisted reproduction, such as in vitro fertilization, Steckloff said in committee.

Steckloff herself is a breast cancer survivor.

"Due to chemotherapy, I, unfortunately, am unable to conceive naturally. But I was lucky. I was able to put off chemo by one month in order to go through IVF and egg harvesting so that one day, I might be able to have a family of my own," Steckloff said at a committee hearing on March 7 .

Leah Zientek, who served as a surrogate for her friends, also testified in favor of the bills at a Senate hearing. Michigan's current policies are complicated and don't support parents, she told lawmakers.

"The biggest challenge that I experienced was fear and confusion caused by Michigan's unclear legal process," Zientek said at a hearing.

However, opponents of the bills, including Right to Life of Michigan, have criticized the proposed legislative language allowing for compensation to go to surrogates.

"Providing payment for services rendered turns the generous acts of being an altruistic surrogate into a money-making proposition which in turn creates a market that can and does exploit poor and vulnerable women," wrote Genevieve Marnon, legislative director for Right to Life of Michigan, in her Senate committee testimony .

Albert, one of the Republican no votes, described the bills as a "revolutionary departure from the natural order" and contended their language attempted to provide a path to recognizing joint parents outside of marriage.

"These bills create whole new paths to parenthood," Albert said at one point.

"It doesn't matter what their relationship is, if they have one at all," he said. "Effectively, the order of a child-parent relationship, as it has existed since the dawn of mankind, is rewritten."

Albert spoke against the bills for about 24 minutes on Tuesday.

[email protected]

Staff Writer Hannah Mackay contributed.

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COMMENTS

  1. Assignments: The Basic Law

    Ordinarily, the term assignment is limited to the transfer of rights that are intangible, like contractual rights and rights connected with property. Merchants Service Co. v. Small Claims Court, 35 Cal. 2d 109, 113-114 (Cal. 1950). An assignment will generally be permitted under the law unless there is an express prohibition against assignment ...

  2. assignment

    assignment. Assignment is a legal term whereby an individual, the "assignor," transfers rights, property, or other benefits to another known as the " assignee .". This concept is used in both contract and property law. The term can refer to either the act of transfer or the rights /property/benefits being transferred.

  3. What Is an Assignment of Contract?

    By Richard Stim, Attorney · University of San Francisco School of Law. An assignment of contract occurs when one party to an existing contract (the "assignor") hands off the contract's obligations and benefits to another party (the "assignee"). Ideally, the assignor wants the assignee to step into his shoes and assume all of his contractual ...

  4. Ultimate Checklist for Understanding Contract Assignment Rules

    When dealing with assignment in contract law, it's crucial to understand the legal backbone that supports a valid assignment. This ensures that the assignment stands up in a court of law if disputes arise. Let's break down the must-know legal requirements: express prohibition, material change, future rights, and rare skill requirement. ...

  5. Assignment of Contract: What Is It? How It Works

    An assignment of contract is a legal term that describes the process that occurs when the original party (assignor) transfers their rights and obligations under their contract to a third party (assignee). When an assignment of contract happens, the original party is relieved of their contractual duties, and their role is replaced by the ...

  6. assign

    This concept is used in both contract and property law. Contract Law Under contract law, when one party assigns a contract, the assignment represents both: (1) an assignment of rights; and (2) a delegation of duties. For example, if A contracts with B to teach B guitar for $50, A can assign this contract to C.

  7. Assignment Contract Law

    Assignment contract law occurs when a party assigns their contractual rights to a third party. The benefit that the issuing party would have received from the contract is now assigned to the third party. The party appointing their rights is referred to as the assignor, while the party obtaining the rights is the assignee.

  8. Contract Assignments

    This is known as "contract assignment.". Generally, all rights under a contract may be assigned. A provision in the contract that states the contract may not be assigned usually refers to the delegation of the assignor's (person who assigns) duties under that contract, not their rights under the contract. In modern law, the phrase ...

  9. 14.1: Assignment of Contract Rights

    The one who makes the assignment is both an obligee and a transferor. The assignee acquires the right to receive the contractual obligations of the promisor, who is referred to as the obligor (see Figure 14.1 "Assignment of Rights" ). The assignor may assign any right unless (1) doing so would materially change the obligation of the obligor ...

  10. 6.4: Assignment, Delegation, and Commonly Used Contracts Clauses

    Exercise 6.4.1 6.4. 1. Learning Objectives. Learn about assignment and delegation. Examine novation. Explore restrictions on assignment, exculpatory clauses, noncompete clauses, mandatory arbitration clauses, acceleration clauses, and liquidated damages clauses. Explore the parol evidence rule.

  11. Litigation, Overview

    PRACTICE TIP: Assignment is related to the concept of novation, where one party to a contract is substituted for a new party. See Overview - Substituted Contract/Novation.Unlike assignment, all parties must consent to a novation. Assignment does not require the consent of the non-assigning party, however, consent or notice of assignment might be required by a contractual provision.

  12. Assignment (Chapter 8)

    Assignment has four effects (here, A is the promisor, B is the promisee, and C is the assignee): (2) To enforce the obligation created by the assignment in C's favour, C can sue A directly, without joining B as a party to the claim. This is true of statutory assignment (8.04) and of equitable assignment (8.05) of equitable choses in action.

  13. Assignment of Contract Rights: Everything You Need to Know

    Assignment of rights changes the foundational terms of the agreement. The assignment is illegal in some way. If assignment of contract takes place, but the contract actually prohibits it, the assignment will automatically be voided. When a transfer of contract rights will somehow change the basics of the contract, assignment cannot happen.

  14. Assessing Assignability: Transferring Contractual Rights or Obligations

    Parties to a commercial contract often desire to transfer their rights or obligations to a non-party. However, even though the general rule permits the unilateral assignment or delegation of contractual rights and obligations, there are certain key exceptions to the general rule. This update provides guidance on selected issues to consider when assessing the assignability of a commercial ...

  15. assignee

    The act of transferring is referred to as "assigning" or "assignment" and is a concept found in both contract and property law. Contract Law Under contract law, when one party assigns a contract, the assignment represents both: (1) a transfer of rights; and (2) a delegation of duties. For example, if A contracts with B to teach B guitar ...

  16. What Is an Assignment of Contract?

    Assignment of contract is the ability to transfer rights, property, or obligations to another. Assignment of contract is a clause often found in business contracts. A party may assign a contract to another party if the contract permits it and no law forbids it.

  17. Assignment (law)

    Assignment [1] is a legal term used in the context of the laws of contract and of property. In both instances, assignment is the process whereby a person, the assignor, transfers rights or benefits to another, the assignee. [2] An assignment may not transfer a duty, burden or detriment without the express agreement of the assignee.

  18. Assignment Law: Everything You Need to Know

    Assignment Law. In legal terms, the meaning of an assignment is a contractual obligation to transfer a property title or right from one party to another. Generally, the assignment is transferred based on an entire interest in the property, chattel, estate, or other item assigned. A grant is different from an assignment in that an assignment ...

  19. Contracts/Assignment

    An assignment [1] is a legal term used in the context of the law of contract and of property. In both instances, assignment is the process whereby a person, the assignor, transfers rights or benefits to another, the assignee. [2] An assignment may not transfer a duty, burden or detriment without the express agreement of the assignee.

  20. Anti-Assignment Provisions and Assignments by 'Operation of Law': What

    Assignments by Operation of Law. In Canada, the assignment of a contract as part of an asset sale, or the change of control of a party to a contract pursuant to a share sale - situations not ...

  21. Guide to Artist Contracts and Agreements

    A consignment agreement is a contract between an artist and gallery, in which the artist — sometimes similar to a loan — provides the gallery with artwork, often for a fixed period of time. Under a consignment agreement, the work is typically provided by the artist free of charge. And if the gallery sells the work while on consignment, they ...

  22. Next City Lawyer

    Introduction. We hate to say it, but a sad truth in the legal world is that being an international student makes it harder to get a training contract.. Many law firms do not want to incur the additional expense and administrative burden of sponsoring trainees and so miss out on the amazing international talent that exists in the UK.

  23. Creditor Rights Assignment Agreement Definition

    Examples of Creditor Rights Assignment Agreement in a sentence. This Creditor Rights Assignment Agreement shall be regulated by the Russian law.. This Creditor Rights Assignment Agreement is signed in three (3) copies, one copy for each Party to the Creditor Rights Assignment Agreement.. All payments under this Creditor Rights Assignment Agreement shall be made by bank transfer using the ...

  24. Pa. Court Revives Contract Claims Against 2 Lawyers Accused of

    NEWS. Pa. Court Revives Contract Claims Against 2 Lawyers Accused of Providing Ineffective Counsel "The agreement is for you to do the job at a professional standard.

  25. Court of Appeals Issues Rare 'Unconscionable Contract' Ruling in

    NEWS. Court of Appeals Issues Rare 'Unconscionable Contract' Ruling in Language Barrier Dispute "As Georgia brings in more and more international businesses and we become an even stronger place ...

  26. Unfamiliar Territory: Lawsuit Calls Mandatory Pro Bono Assignments

    NEWS. Unfamiliar Territory: Lawsuit Calls Mandatory Pro Bono Assignments Unconstitutional "The reason the attorneys don't like it is because attorneys don't want to be put into a situation where ...

  27. Article 23: China hits back at criticism of Hong Kong's hardline new

    The law was passed unanimously in Hong Kong's opposition-free parliament on Tuesday, after an unusually short 12-day legislative process and a limited public consultation period of just one month.

  28. 'Love Is Blind' Contestant Contract Suit Sent to Arbitrator (1)

    "I understand what the presumption of the law is. But the court is stuck with the contract. That's the contract." The case is a reckoning for the reality TV industry, Poche's attorneys said in court filings, where workplace protections are slim, excessive alcohol use abounds, and participants are bound by "draconian" contracts.

  29. Michigan Senate votes to overhaul surrogacy law, allow paid contracts

    Lansing — The Michigan Senate voted Tuesday to revamp the state's law on surrogacy, allowing for agreements, featuring compensation, between women who are willing to become pregnant and those ...

  30. Commercial Arbitration: Russia

    Russia. Russia is a party to the European Convention on International Commercial Arbitration 1961, which contains the reference to the New York Convention in relation to recognition and enforcement of the arbitral awards that were set aside. In addition, Russia, as well as some former COMECON members, is still a party to the Moscow Convention ...