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Assignment Of Rights Agreement

Jump to section, what is an assignment of rights agreement.

An assignment of rights agreement is a written document in which one party, the assignor, assigns to another party all or part of their rights under an existing contract. The most common example of this would be when someone wants to sell their shares of stock in a company.

When you buy shares from someone else (the seller), they agree to transfer them over and give up any control they had on that share. This way, another party can take ownership without going through the trouble of trying to buy the whole company themselves.

Common Sections in Assignment Of Rights Agreements

Below is a list of common sections included in Assignment Of Rights Agreements. These sections are linked to the below sample agreement for you to explore.

Assignment Of Rights Agreement Sample

Reference : Security Exchange Commission - Edgar Database, EX-99.(H)(7) 5 dex99h7.htm FORM OF ASSIGNMENT AGREEMENT , Viewed December 20, 2021, View Source on SEC .

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Meet some of our Assignment Of Rights Agreement Lawyers

Orly Boger has worked in the high tech industry and in a leading law firm before launching her law firm. Orly focuses on startup companies and technology transactions. She structures and negotiates software and technology license agreements, strategic partnerships, cloud-based/SaaS agreements, internet related transactions, OEM agreements, supply, distribution, telecommunications. In addition, Orly has experience in serving as an in-house legal counsel for start up companies at various phases of their development, providing strategic legal advise to entrepreneurs and emerging companies with a comprehensive understanding of the business and legal issues. She has been helping companies develop a legal strategy for all aspects of their operations, from commercial transactions and partnerships, scalable SaaS or services agreements, privacy policies, employment related policies, open source licensing and much more.

Corporate attorney with 14+ years of in-house counsel, people leadership and client management experience. Provides legal expertise and a business-oriented approach to problem solving and building lines of business. Consistently works under pressure, prioritizing and managing workload and simultaneous tasks to meet deadlines in a changing, fast-paced environment.

As a corporate lawyer, I have dealt with international transactions, complex litigation and arbitration, regulatory compliance, and multijurisdictional tax planning. In March 2021, I started my firm and shifted my professional focus to working with start-ups, small businesses, entrepreneurs, and families. I help my clients structure and run their businesses and take care of their assets, including intellectual property issues and estate planning for their families. I try to bring big law quality and small firm personal attention to every client.

Jerry provides legal advice to business owners regarding contracts, business law, labor & employment, wills and estates, and real estate.

Seasoned professional with experience in wide variety of contract negotiation and review.

I have been in practice for over 19 years. I have substantial experience across the spectrum of civil practice areas both as a litigator and transactional counsel. This includes: negotiating commercial and real estate transactions, corporate organization, commercial agreements, and resolving commercial disputes, and litigating numerous civil, administrative, and criminal cases through all phases of litigation from trial through appeal, as well as judgment enforcement. My vast experience as a litigator is an asset to my transactional clients. My background in Investigating and proving the breakdown of business relationships in court allows me a unique advantage in drafting, negotiating, and closing business transactions.

I primarily work with small businesses and the self-employed. I help my clients build sustainable businesses, navigate risk, and resolve conflicts. Most of my cases involve contract review, drafting, negotiation, and disputes; I also work on business entity formation, employment and independent contractor issues, copyright licenses, trademark registration, and more.

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assignments basic law

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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14.1: Assignment of Contract Rights

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LEARNING OBJECTIVES

Understand what an assignment is and how it is made.
Recognize the effect of the assignment.
Know when assignments are not allowed.
Understand the concept of assignor’s warranties.

The Concept of a Contract Assignment

Contracts create rights and duties. By an assignment , an obligee (one who has the right to receive a contract benefit) transfers a right to receive a contract benefit owed by the obligor (the one who has a duty to perform) to a third person ( assignee ); the obligee then becomes an assignor (one who makes an assignment).

The Restatement (Second) of Contracts defines an assignment of a right as “a manifestation of the assignor’s intention to transfer it by virtue of which the assignor’s right to performance by the obligor is extinguished in whole or in part and the assignee acquires the right to such performance.”Restatement (Second) of Contracts, Section 317(1). 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, materially burden him, increase his risk, or otherwise diminish the value to him of the original contract; (2) statute or public policy forbids the assignment; or (3) the contract itself precludes assignment. The common law of contracts and Articles 2 and 9 of the Uniform Commercial Code (UCC) govern assignments. Assignments are an important part of business financing, such as factoring. A factor is one who purchases the right to receive income from another.

Figure 14.1 Assignment of Rights

Method of Assignment

Manifesting assent.

To effect an assignment, the assignor must make known his intention to transfer the rights to the third person. The assignor’s intention must be that the assignment is effective without need of any further action or any further manifestation of intention to make the assignment. In other words, the assignor must intend and understand himself to be making the assignment then and there; he is not promising to make the assignment sometime in the future.

Under the UCC, any assignments of rights in excess of $5,000 must be in writing, but otherwise, assignments can be oral and consideration is not required: the assignor could assign the right to the assignee for nothing (not likely in commercial transactions, of course). Mrs. Franklin has the right to receive $750 a month from the sale of a house she formerly owned; she assigns the right to receive the money to her son Jason, as a gift. The assignment is good, though such a gratuitous assignment is usually revocable, which is not the case where consideration has been paid for an assignment.

Acceptance and Revocation

For the assignment to become effective, the assignee must manifest his acceptance under most circumstances. This is done automatically when, as is usually the case, the assignee has given consideration for the assignment (i.e., there is a contract between the assignor and the assignee in which the assignment is the assignor’s consideration), and then the assignment is not revocable without the assignee’s consent. Problems of acceptance normally arise only when the assignor intends the assignment as a gift. Then, for the assignment to be irrevocable, either the assignee must manifest his acceptance or the assignor must notify the assignee in writing of the assignment.

Notice to the obligor is not required, but an obligor who renders performance to the assignor without notice of the assignment (that performance of the contract is to be rendered now to the assignee) is discharged. Obviously, the assignor cannot then keep the consideration he has received; he owes it to the assignee. But if notice is given to the obligor and she performs to the assignor anyway, the assignee can recover from either the obligor or the assignee, so the obligor could have to perform twice, as in Exercise 2 at the chapter’s end, Aldana v. Colonial Palms Plaza . Of course, an obligor who receives notice of the assignment from the assignee will want to be sure the assignment has really occurred. After all, anybody could waltz up to the obligor and say, “I’m the assignee of your contract with the bank. From now on, pay me the $500 a month, not the bank.” The obligor is entitled to verification of the assignment.

Effect of Assignment

General rule.

An assignment of rights effectively makes the assignee stand in the shoes of the assignor. He gains all the rights against the obligor that the assignor had, but no more. An obligor who could avoid the assignor’s attempt to enforce the rights could avoid a similar attempt by the assignee. Likewise, under UCC Section 9-318(1), the assignee of an account is subject to all terms of the contract between the debtor and the creditor-assignor. Suppose Dealer sells a car to Buyer on a contract where Buyer is to pay $300 per month and the car is warranted for 50,000 miles. If the car goes on the fritz before then and Dealer won’t fix it, Buyer could fix it for, say, $250 and deduct that $250 from the amount owed Dealer on the next installment (called a setoff). Now, if Dealer assigns the contract to Assignee, Assignee stands in Dealer’s shoes, and Buyer could likewise deduct the $250 from payment to Assignee.

The “shoe rule” does not apply to two types of assignments. First, it is inapplicable to the sale of a negotiable instrument to a holder in due course. Second, the rule may be waived: under the UCC and at common law, the obligor may agree in the original contract not to raise defenses against the assignee that could have been raised against the assignor.Uniform Commercial Code, Section 9-206. While a waiver of defenses makes the assignment more marketable from the assignee’s point of view, it is a situation fraught with peril to an obligor, who may sign a contract without understanding the full import of the waiver. Under the waiver rule, for example, a farmer who buys a tractor on credit and discovers later that it does not work would still be required to pay a credit company that purchased the contract; his defense that the merchandise was shoddy would be unavailing (he would, as used to be said, be “having to pay on a dead horse”).

For that reason, there are various rules that limit both the holder in due course and the waiver rule. Certain defenses, the so-called real defenses (infancy, duress, and fraud in the execution, among others), may always be asserted. Also, the waiver clause in the contract must have been presented in good faith, and if the assignee has actual notice of a defense that the buyer or lessee could raise, then the waiver is ineffective. Moreover, in consumer transactions, the UCC’s rule is subject to state laws that protect consumers (people buying things used primarily for personal, family, or household purposes), and many states, by statute or court decision, have made waivers of defenses ineffective in such consumer transactions . Federal Trade Commission regulations also affect the ability of many sellers to pass on rights to assignees free of defenses that buyers could raise against them. Because of these various limitations on the holder in due course and on waivers, the “shoe rule” will not govern in consumer transactions and, if there are real defenses or the assignee does not act in good faith, in business transactions as well.

When Assignments Are Not Allowed

The general rule—as previously noted—is that most contract rights are assignable. But there are exceptions. Five of them are noted here.

Material Change in Duties of the Obligor

When an assignment has the effect of materially changing the duties that the obligor must perform, it is ineffective. Changing the party to whom the obligor must make a payment is not a material change of duty that will defeat an assignment, since that, of course, is the purpose behind most assignments. Nor will a minor change in the duties the obligor must perform defeat the assignment.

Several residents in the town of Centerville sign up on an annual basis with the Centerville Times to receive their morning paper. A customer who is moving out of town may assign his right to receive the paper to someone else within the delivery route. As long as the assignee pays for the paper, the assignment is effective; the only relationship the obligor has to the assignee is a routine delivery in exchange for payment. Obligors can consent in the original contract, however, to a subsequent assignment of duties. Here is a clause from the World Team Tennis League contract: “It is mutually agreed that the Club shall have the right to sell, assign, trade and transfer this contract to another Club in the League, and the Player agrees to accept and be bound by such sale, exchange, assignment or transfer and to faithfully perform and carry out his or her obligations under this contract as if it had been entered into by the Player and such other Club.” Consent is not necessary when the contract does not involve a personal relationship.

Assignment of Personal Rights

When it matters to the obligor who receives the benefit of his duty to perform under the contract, then the receipt of the benefit is a personal right that cannot be assigned. For example, a student seeking to earn pocket money during the school year signs up to do research work for a professor she admires and with whom she is friendly. The professor assigns the contract to one of his colleagues with whom the student does not get along. The assignment is ineffective because it matters to the student (the obligor) who the person of the assignee is. An insurance company provides auto insurance covering Mohammed Kareem, a sixty-five-year-old man who drives very carefully. Kareem cannot assign the contract to his seventeen-year-old grandson because it matters to the insurance company who the person of its insured is. Tenants usually cannot assign (sublet) their tenancies without the landlord’s permission because it matters to the landlord who the person of their tenant is. Section 14.4.1 "Nonassignable Rights" , Nassau Hotel Co. v. Barnett & Barse Corp. , is an example of the nonassignability of a personal right.

Assignment Forbidden by Statute or Public Policy

Various federal and state laws prohibit or regulate some contract assignment. The assignment of future wages is regulated by state and federal law to protect people from improvidently denying themselves future income because of immediate present financial difficulties. And even in the absence of statute, public policy might prohibit some assignments.

Contracts That Prohibit Assignment

Assignability of contract rights is useful, and prohibitions against it are not generally favored. Many contracts contain general language that prohibits assignment of rights or of “the contract.” Both the Restatement and UCC Section 2-210(3) declare that in the absence of any contrary circumstances, a provision in the agreement that prohibits assigning “the contract” bars “only the delegation to the assignee of the assignor’s performance.”Restatement (Second) of Contracts, Section 322. In other words, unless the contract specifically prohibits assignment of any of its terms, a party is free to assign anything except his or her own duties.

Even if a contractual provision explicitly prohibits it, a right to damages for breach of the whole contract is assignable under UCC Section 2-210(2) in contracts for goods. Likewise, UCC Section 9-318(4) invalidates any contract provision that prohibits assigning sums already due or to become due. Indeed, in some states, at common law, a clause specifically prohibiting assignment will fail. For example, the buyer and the seller agree to the sale of land and to a provision barring assignment of the rights under the contract. The buyer pays the full price, but the seller refuses to convey. The buyer then assigns to her friend the right to obtain title to the land from the seller. The latter’s objection that the contract precludes such an assignment will fall on deaf ears in some states; the assignment is effective, and the friend may sue for the title.

Future Contracts

The law distinguishes between assigning future rights under an existing contract and assigning rights that will arise from a future contract. Rights contingent on a future event can be assigned in exactly the same manner as existing rights, as long as the contingent rights are already incorporated in a contract. Ben has a long-standing deal with his neighbor, Mrs. Robinson, to keep the latter’s walk clear of snow at twenty dollars a snowfall. Ben is saving his money for a new printer, but when he is eighty dollars shy of the purchase price, he becomes impatient and cajoles a friend into loaning him the balance. In return, Ben assigns his friend the earnings from the next four snowfalls. The assignment is effective. However, a right that will arise from a future contract cannot be the subject of a present assignment.

Partial Assignments

An assignor may assign part of a contractual right, but only if the obligor can perform that part of his contractual obligation separately from the remainder of his obligation. Assignment of part of a payment due is always enforceable. However, if the obligor objects, neither the assignor nor the assignee may sue him unless both are party to the suit. Mrs. Robinson owes Ben one hundred dollars. Ben assigns fifty dollars of that sum to his friend. Mrs. Robinson is perplexed by this assignment and refuses to pay until the situation is explained to her satisfaction. The friend brings suit against Mrs. Robinson. The court cannot hear the case unless Ben is also a party to the suit. This ensures all parties to the dispute are present at once and avoids multiple lawsuits.

Successive Assignments

It may happen that an assignor assigns the same interest twice (see Figure 14.2 "Successive Assignments" ). With certain exceptions, the first assignee takes precedence over any subsequent assignee. One obvious exception is when the first assignment is ineffective or revocable. A subsequent assignment has the effect of revoking a prior assignment that is ineffective or revocable. Another exception: if in good faith the subsequent assignee gives consideration for the assignment and has no knowledge of the prior assignment, he takes precedence whenever he obtains payment from, performance from, or a judgment against the obligor, or whenever he receives some tangible evidence from the assignor that the right has been assigned (e.g., a bank deposit book or an insurance policy).

Some states follow the different English rule: the first assignee to give notice to the obligor has priority, regardless of the order in which the assignments were made. Furthermore, if the assignment falls within the filing requirements of UCC Article 9 (see Chapter 22 "Secured Transactions and Suretyship" ), the first assignee to file will prevail.

Figure 14.2 Successive Assignments

Assignor’s Warranties

An assignor has legal responsibilities in making assignments. He cannot blithely assign the same interests pell-mell and escape liability. Unless the contract explicitly states to the contrary, a person who assigns a right for value makes certain assignor’s warranties to the assignee: that he will not upset the assignment, that he has the right to make it, and that there are no defenses that will defeat it. However, the assignor does not guarantee payment; assignment does not by itself amount to a warranty that the obligor is solvent or will perform as agreed in the original contract. Mrs. Robinson owes Ben fifty dollars. Ben assigns this sum to his friend. Before the friend collects, Ben releases Mrs. Robinson from her obligation. The friend may sue Ben for the fifty dollars. Or again, if Ben represents to his friend that Mrs. Robinson owes him (Ben) fifty dollars and assigns his friend that amount, but in fact Mrs. Robinson does not owe Ben that much, then Ben has breached his assignor’s warranty. The assignor’s warranties may be express or implied.

KEY TAKEAWAY

Generally, it is OK for an obligee to assign the right to receive contractual performance from the obligor to a third party. The effect of the assignment is to make the assignee stand in the shoes of the assignor, taking all the latter’s rights and all the defenses against nonperformance that the obligor might raise against the assignor. But the obligor may agree in advance to waive defenses against the assignee, unless such waiver is prohibited by law.

There are some exceptions to the rule that contract rights are assignable. Some, such as personal rights, are not circumstances where the obligor’s duties would materially change, cases where assignability is forbidden by statute or public policy, or, with some limits, cases where the contract itself prohibits assignment. Partial assignments and successive assignments can happen, and rules govern the resolution of problems arising from them.

When the assignor makes the assignment, that person makes certain warranties, express or implied, to the assignee, basically to the effect that the assignment is good and the assignor knows of no reason why the assignee will not get performance from the obligor.

If Able makes a valid assignment to Baker of his contract to receive monthly rental payments from Tenant, how is Baker’s right different from what Able’s was?
Able made a valid assignment to Baker of his contract to receive monthly purchase payments from Carr, who bought an automobile from Able. The car had a 180-day warranty, but the car malfunctioned within that time. Able had quit the auto business entirely. May Carr withhold payments from Baker to offset the cost of needed repairs?
Assume in the case in Exercise 2 that Baker knew Able was selling defective cars just before his (Able’s) withdrawal from the auto business. How, if at all, does that change Baker’s rights?
Why are leases generally not assignable? Why are insurance contracts not assignable?

Assessing Assignability: Transferring Contractual Rights or Obligations | Practical 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.

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§ 2-210. Delegation of Performance; Assignment of Rights.

Primary tabs.

(1) A party may perform his duty through a delegate unless otherwise agreed or unless the other party has a substantial interest in having his original promisor perform or control the acts required by the contract . No delegation of performance relieves the party delegating of any duty to perform or any liability for breach.

(2) Unless otherwise agreed all rights of either seller or buyer can be assigned except where the assignment would materially change the duty of the other party, or increase materially the burden or risk imposed on him by his contract , or impair materially his chance of obtaining return performance. A right to damages for breach of the whole contract or a right arising out of the assignor's due performance of his entire obligation can be assigned despite agreement otherwise.

(3)Unless the circumstances indicate the contrary a prohibition of assignment of "the contract" is to be construed as barring only the delegation to the assignee of the assignor's performance.

(4) An assignment of "the contract" or of "all my rights under the contract" or an assignment in similar general terms is an assignment of rights and unless the language or the circumstances (as in an assignment for security) indicate the contrary, it is a delegation of performance of the duties of the assignor and its acceptance by the assignee constitutes a promise by him to perform those duties. This promise is enforceable by either the assignor or the other party to the original contract .

(5) The other party may treat any assignment which delegates performance as creating reasonable grounds for insecurity and may without prejudice to his rights against the assignor demand assurances from the assignee (Section 2-609 ).

Assignment of Rights Example: Everything You Need to Know

A good assignment of rights example is if a party was entitled to collect $100 for painting, they can transfer the right to receive payment to another party. 3 min read updated on February 01, 2023

Updated October 28, 2020:

A good assignment of rights example is if a party was entitled to collect $100 for painting, they can transfer the right to receive payment to another party. An assignment contract takes place when one party to an existing contract (the assignor) transfers the contract's obligations and benefits to another party (the assignee).

What Is an Assignment Agreement?

A contract assignment occurs when a party assigns its 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. The party creating the assignment usually does so with the motive of profit. Generally, assignments are perfectly legal. In specific situations, they may be illegal when they have been prohibited by a clause in the contract or prohibited by law.

Use of an Assignment Agreement

In situations where you don't have the staff to perform a task, it may be necessary to outsource the work to another party. Assignment agreements are created to formally transfer the contractual responsibilities and rights to a third party, while also making sure to preserve your own obligations and legal rights. The use of an assignment agreement is appropriate when you're:

Handing over your contractual responsibilities to a third party
Taking over contracts or responsibilities held by another party

A contract assignment may also be referred to as an assignment agreement. An assignment agreement should include the:

Name of the party transferring their contractual duties
Name of the party receiving the contractual obligations and rights
Third-party, or obligor, to the original contract
Name of the actual contract, along with the expiration date
If and when the obligor's approval has been received
Specific date the contract will take effect
State laws that govern the contract

Parties Involved in a Contract Assignment

Generally, a contract assignment is made up of the following parties:

Obligor: The party that is committed to transferring benefits or rights to the party specified in the contract. The obligor is most likely the party that initially makes the contract.
Assignor: The party that is the initial beneficiary of the benefits or rights. They are responsible for making the assignment. In other words, they will be handing over the rights they were initially going to receive.
Assignee: The party that will be accepting the benefits and rights from the assignor. A transfer may have multiple assignees.

The steps in an assignment are:

The obligor creates a contract with the assignor.
The rights are transferred from the assignor to the assignee.
The assignee is paid the benefits from the obligor.

How Is a Contract Assignment Created?

In most cases, it is not necessary to notify the obligor of an assignment. The assignor needs to definitively establish their intent in assigning rights to the assignee. Generally speaking, assignment contracts can be both written and oral. However, it is recommended that the contract is written.

It is important that the contract is written in the present tense. If any past or future tense is used, it will make the contract legally nonbinding.

How Assignments Work

The specific language used in the contract will determine how the assignment plays out. For example , one contract may prohibit an assignment, while another contract may require that all parties involved agree to it before proceeding. Remember, an assignment of a 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 the assignment.
The assignment drastically changes the expected outcome.
The assignment is against public policy or illegal.
The contract contains a no-assignment clause.
The assignment is for a future right that would only be attainable in a contract in the future.
The contract hasn't been finalized or written yet.

If you need help with an assignment of rights, 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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Content Approved by UpCounsel

Assignment Contract Law
Assignment of Rights and Obligations Under a Contract
Legal Assignment
Assignment Law
What Is the Definition of Assigns
Assignment Of Contracts
Partial Assignment of Contract
Assignment of Contract Rights
Delegation vs Assignment
Consent to Assignment

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Legal Templates

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Assignment Agreement Template

Use our assignment agreement to transfer contractual obligations.

Updated February 1, 2024 Reviewed by Brooke Davis

An assignment agreement is a legal document that transfers rights, responsibilities, and benefits from one party (the “assignor”) to another (the “assignee”). You can use it to reassign debt, real estate, intellectual property, leases, insurance policies, and government contracts.

What Is an Assignment Agreement?

What to include in an assignment agreement, how to assign a contract, how to write an assignment agreement, assignment agreement sample.

Partnership Interest

An assignment agreement effectively transfers the rights and obligations of a person or entity under an initial contract to another. The original party is the assignor, and the assignee takes on the contract’s duties and benefits.

It’s often a requirement to let the other party in the original deal know the contract is being transferred. It’s essential to create this form thoughtfully, as a poorly written assignment agreement may leave the assignor obligated to certain aspects of the deal.

The most common use of an assignment agreement occurs when the assignor no longer can or wants to continue with a contract. Instead of leaving the initial party or breaking the agreement, the assignor can transfer the contract to another individual or entity.

For example, imagine a small residential trash collection service plans to close its operations. Before it closes, the business brokers a deal to send its accounts to a curbside pickup company providing similar services. After notifying account holders, the latter company continues the service while receiving payment.

Create a thorough assignment agreement by including the following information:

Effective Date: The document must indicate when the transfer of rights and obligations occurs.
Parties: Include the full name and address of the assignor, assignee, and obligor (if required).
Assignment: Provide details that identify the original contract being assigned.
Third-Party Approval: If the initial contract requires the approval of the obligor, note the date the approval was received.
Signatures: Both parties must sign and date the printed assignment contract template once completed. If a notary is required, wait until you are in the presence of the official and present identification before signing. Failure to do so may result in having to redo the assignment contract.

Review the Contract Terms

Carefully review the terms of the existing contract. Some contracts may have specific provisions regarding assignment. Check for any restrictions or requirements related to assigning the contract.

Check for Anti-Assignment Clauses

Some contracts include anti-assignment clauses that prohibit or restrict the ability to assign the contract without the consent of the other party. If there’s such a clause, you may need the consent of the original parties to proceed.

Determine Assignability

Ensure that the contract is assignable. Some contracts, especially those involving personal services or unique skills, may not be assignable without the other party’s agreement.

Get Consent from the Other Party (if Required)

If the contract includes an anti-assignment clause or requires consent for assignment, seek written consent from the other party. This can often be done through a formal amendment to the contract.

Prepare an Assignment Agreement

Draft an assignment agreement that clearly outlines the transfer of rights and obligations from the assignor (the party assigning the contract) to the assignee (the party receiving the assignment). Include details such as the names of the parties, the effective date of the assignment, and the specific rights and obligations being transferred.

Include Original Contract Information

Attach a copy of the original contract or reference its key terms in the assignment agreement. This helps in clearly identifying the contract being assigned.

Execution of the Assignment Agreement

Both the assignor and assignee should sign the assignment agreement. Signatures should be notarized if required by the contract or local laws.

Notice to the Other Party

Provide notice of the assignment to the non-assigning party. This can be done formally through a letter or as specified in the contract.

File the Assignment

File the assignment agreement with the appropriate parties or entities as required. This may include filing with the original contracting party or relevant government authorities.

Communicate with Third Parties

Inform any relevant third parties, such as suppliers, customers, or service providers, about the assignment to ensure a smooth transition.

Keep Copies for Records

Keep copies of the assignment agreement, original contract, and any related communications for your records.

Here’s a list of steps on how to write an assignment agreement:

Step 1 – List the Assignor’s and Assignee’s Details

List all of the pertinent information regarding the parties involved in the transfer. This information includes their full names, addresses, phone numbers, and other relevant contact information.

This step clarifies who’s transferring the initial contract and who will take on its responsibilities.

Step 2 – Provide Original Contract Information

Describing and identifying the contract that is effectively being reassigned is essential. This step avoids any confusion after the transfer has been completed.

Step 3 – State the Consideration

Provide accurate information regarding the amount the assignee pays to assume the contract. This figure should include taxes and any relevant peripheral expenses. If the assignee will pay the consideration over a period, indicate the method and installments.

Step 4 – Provide Any Terms and Conditions

The terms and conditions of any agreement are crucial to a smooth transaction. You must cover issues such as dispute resolution, governing law, obligor approval, and any relevant clauses.

Step 5 – Obtain Signatures

Both parties must sign the agreement to ensure it is legally binding and that they have read and understood the contract. If a notary is required, wait to sign off in their presence.

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14.1 Assignment of Contract Rights

Learning objectives.

Understand what an assignment is and how it is made.
Recognize the effect of the assignment.
Know when assignments are not allowed.
Understand the concept of assignor’s warranties.

The Concept of a Contract Assignment

Contracts create rights and duties. By an assignment The passing or delivering by one person to another of the right to a contract benefit. , an obligee One to whom an obligation is owed. (one who has the right to receive a contract benefit) transfers a right to receive a contract benefit owed by the obligor One who owes an obligation. (the one who has a duty to perform) to a third person ( assignee One to whom the right to receive benefit of a contract is passed or delivered. ); the obligee then becomes an assignor One who agrees to allow another to receive the benefit of a contract. (one who makes an assignment).

The Restatement (Second) of Contracts defines an assignment of a right as “a manifestation of the assignor’s intention to transfer it by virtue of which the assignor’s right to performance by the obligor is extinguished in whole or in part and the assignee acquires the right to such performance.” Restatement (Second) of Contracts, Section 317(1). 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, materially burden him, increase his risk, or otherwise diminish the value to him of the original contract; (2) statute or public policy forbids the assignment; or (3) the contract itself precludes assignment. The common law of contracts and Articles 2 and 9 of the Uniform Commercial Code (UCC) govern assignments. Assignments are an important part of business financing, such as factoring. A factor A person who pays money to receive another’s executory contractual benefits. is one who purchases the right to receive income from another.

Figure 14.1 Assignment of Rights

Method of Assignment

Manifesting assent.

Acceptance and Revocation

Effect of Assignment

General rule.

An assignment of rights effectively makes the assignee stand in the shoes of An assignee takes no greater rights than his assignor had. the assignor. He gains all the rights against the obligor that the assignor had, but no more. An obligor who could avoid the assignor’s attempt to enforce the rights could avoid a similar attempt by the assignee. Likewise, under UCC Section 9-318(1), the assignee of an account is subject to all terms of the contract between the debtor and the creditor-assignor. Suppose Dealer sells a car to Buyer on a contract where Buyer is to pay $300 per month and the car is warranted for 50,000 miles. If the car goes on the fritz before then and Dealer won’t fix it, Buyer could fix it for, say, $250 and deduct that $250 from the amount owed Dealer on the next installment (called a setoff). Now, if Dealer assigns the contract to Assignee, Assignee stands in Dealer’s shoes, and Buyer could likewise deduct the $250 from payment to Assignee.

The “shoe rule” does not apply to two types of assignments. First, it is inapplicable to the sale of a negotiable instrument to a holder in due course (covered in detail Chapter 23 "Negotiation of Commercial Paper" ). Second, the rule may be waived: under the UCC and at common law, the obligor may agree in the original contract not to raise defenses against the assignee that could have been raised against the assignor. Uniform Commercial Code, Section 9-206. While a waiver of defenses Surrender by a party of legal rights otherwise available to him or her. makes the assignment more marketable from the assignee’s point of view, it is a situation fraught with peril to an obligor, who may sign a contract without understanding the full import of the waiver. Under the waiver rule, for example, a farmer who buys a tractor on credit and discovers later that it does not work would still be required to pay a credit company that purchased the contract; his defense that the merchandise was shoddy would be unavailing (he would, as used to be said, be “having to pay on a dead horse”).

For that reason, there are various rules that limit both the holder in due course and the waiver rule. Certain defenses, the so-called real defenses (infancy, duress, and fraud in the execution, among others), may always be asserted. Also, the waiver clause in the contract must have been presented in good faith, and if the assignee has actual notice of a defense that the buyer or lessee could raise, then the waiver is ineffective. Moreover, in consumer transactions, the UCC’s rule is subject to state laws that protect consumers (people buying things used primarily for personal, family, or household purposes), and many states, by statute or court decision, have made waivers of defenses ineffective in such consumer transactions A contract for household or domestic purposes, not commercial purposes. . Federal Trade Commission regulations also affect the ability of many sellers to pass on rights to assignees free of defenses that buyers could raise against them. Because of these various limitations on the holder in due course and on waivers, the “shoe rule” will not govern in consumer transactions and, if there are real defenses or the assignee does not act in good faith, in business transactions as well.

When Assignments Are Not Allowed

The general rule—as previously noted—is that most contract rights are assignable. But there are exceptions. Five of them are noted here.

Material Change in Duties of the Obligor

Assignment of Personal Rights

When it matters to the obligor who receives the benefit of his duty to perform under the contract, then the receipt of the benefit is a personal right The right or duty of a particular person to perform or receive contract duties or benefits; cannot be assigned. that cannot be assigned. For example, a student seeking to earn pocket money during the school year signs up to do research work for a professor she admires and with whom she is friendly. The professor assigns the contract to one of his colleagues with whom the student does not get along. The assignment is ineffective because it matters to the student (the obligor) who the person of the assignee is. An insurance company provides auto insurance covering Mohammed Kareem, a sixty-five-year-old man who drives very carefully. Kareem cannot assign the contract to his seventeen-year-old grandson because it matters to the insurance company who the person of its insured is. Tenants usually cannot assign (sublet) their tenancies without the landlord’s permission because it matters to the landlord who the person of their tenant is. Section 14.4.1 "Nonassignable Rights" , Nassau Hotel Co. v. Barnett & Barse Corp. , is an example of the nonassignability of a personal right.

Assignment Forbidden by Statute or Public Policy

Contracts That Prohibit Assignment

Assignability of contract rights is useful, and prohibitions against it are not generally favored. Many contracts contain general language that prohibits assignment of rights or of “the contract.” Both the Restatement and UCC Section 2-210(3) declare that in the absence of any contrary circumstances, a provision in the agreement that prohibits assigning “the contract” bars “only the delegation to the assignee of the assignor’s performance.” Restatement (Second) of Contracts, Section 322. In other words, unless the contract specifically prohibits assignment of any of its terms, a party is free to assign anything except his or her own duties.

Future Contracts

Partial Assignments

Successive Assignments

Some states follow the different English rule: the first assignee to give notice to the obligor has priority, regardless of the order in which the assignments were made. Furthermore, if the assignment falls within the filing requirements of UCC Article 9 (see Chapter 28 "Secured Transactions and Suretyship" ), the first assignee to file will prevail.

Figure 14.2 Successive Assignments

Assignor’s Warranties

An assignor has legal responsibilities in making assignments. He cannot blithely assign the same interests pell-mell and escape liability. Unless the contract explicitly states to the contrary, a person who assigns a right for value makes certain assignor’s warranties Promises, express or implied, made by an assignor to the assignee about the merits of the assignment. to the assignee: that he will not upset the assignment, that he has the right to make it, and that there are no defenses that will defeat it. However, the assignor does not guarantee payment; assignment does not by itself amount to a warranty that the obligor is solvent or will perform as agreed in the original contract. Mrs. Robinson owes Ben fifty dollars. Ben assigns this sum to his friend. Before the friend collects, Ben releases Mrs. Robinson from her obligation. The friend may sue Ben for the fifty dollars. Or again, if Ben represents to his friend that Mrs. Robinson owes him (Ben) fifty dollars and assigns his friend that amount, but in fact Mrs. Robinson does not owe Ben that much, then Ben has breached his assignor’s warranty. The assignor’s warranties may be express or implied.

Key Takeaway

If Able makes a valid assignment to Baker of his contract to receive monthly rental payments from Tenant, how is Baker’s right different from what Able’s was?
Able made a valid assignment to Baker of his contract to receive monthly purchase payments from Carr, who bought an automobile from Able. The car had a 180-day warranty, but the car malfunctioned within that time. Able had quit the auto business entirely. May Carr withhold payments from Baker to offset the cost of needed repairs?
Assume in the case in Exercise 2 that Baker knew Able was selling defective cars just before his (Able’s) withdrawal from the auto business. How, if at all, does that change Baker’s rights?
Why are leases generally not assignable? Why are insurance contracts not assignable?

Rep. Stefanik files misconduct complaint against Judge Juan Merchan over ‘random’ assignment to Trump’s NYC trial

R ep. Elise Stefanik (R-NY) filed a misconduct complaint Tuesday against the judge overseeing Donald Trump’s Manhattan hush money trial, alleging that his selection to handle the former president’s case — and others involving his allies — is “not random at all.”

The House Republican Conference chairwoman’s complaint with the inspector general of the New York State Unified Court System called for an investigation into Justice Juan Merchan “to determine whether the required random selection process was in fact followed.”

“The potential misconduct pertains to the repeated assignment of Acting Justice Juan Merchan, a Democrat Party donor, to criminal cases related to President Donald J. Trump and his allies,” Stefanik wrote.

“Acting Justice Merchan currently presides over the criminal case against President Trump brought by Manhattan District Attorney Alvin Bragg,” she said.

“Acting Justice Merchan also presided over the criminal trial against the Trump Organization and will be presiding over the criminal trial of Steve Bannon, a senior advisor in President Trump’s White House and a prominent advocate for President Trump,” Stefanik continued, noting that there were at least two dozen sitting justices eligible to oversee the cases but Merchan – an acting jurist – was selected for all three related to the presumptive 2024 GOP nominee for president and his allies.

“If justices were indeed being randomly assigned in the Criminal Term, the probability of two specific criminal cases being assigned to the same justice is quite low, and the probability of three specific criminal cases being assigned to the same justice is infinitesimally small. And yet, we see Acting Justice Merchan on all three cases,” Stefanik argued.

The congresswoman also highlighted the judge’s political donations, for which he was cleared of misconduct last July by the New York State Commission on Judicial Conduct.

Merchan contributed $15 earmarked for the “Biden for President” campaign on July 26, 2020, and then the following day made $10 contributions to the Progressive Turnout Project and Stop Republicans each, Federal Election Commission records show

The donations were made through ActBlue, the Democratic Party’s preferred online fundraising platform.

The Progressive Turnout Project’s stated mission is to “rally Democrats to vote,” according to the group’s website.

Stop Republicans is a subsidiary of the Progressive Turnout Project and describes itself as “a grassroots-funded effort dedicated to resisting the Republican Party and Donald Trump’s radical right-wing legacy.”

The judge’s daughter, Loren Merchan, is more involved in Democratic politics – through her work as head of the consulting firm Authentic Campaigns — and Stefanik argued in her missive that Loren Merchan’s “firm stands to profit greatly if Donald Trump is convicted.”

“One cannot help but suspect that the ‘random selection’ at work in the assignment of Acting Justice Merchan, a Democrat Party donor, to these cases involving prominent Republicans, is in fact not random at all,” the New York Republican lawmaker wrote.

Stefanik demanded an investigation into the “anomaly” and asked that anyone found to be involved in any sort of “scheme” to get Merchan on the three cases face discipline.

Rep. Stefanik files misconduct complaint against Judge Juan Merchan over ‘random’ assignment to Trump’s NYC trial

Watch CBS News

Students rally for DePaul professor who was fired over assignment about war in Gaza

By Sabrina Franza , Samah Assad

June 6, 2024 / 4:06 PM CDT / CBS Chicago

CHICAGO (CBS) -- Protesters hit the campus of DePaul University on Thursday, in a push to try to get an adjunct professor reinstated after she was fired over an assignment to her students about the war in Gaza.

An appeals board unanimously decided that by firing now-former adjunct professor Dr. Anne D'Aquino , DePaul violated her academic freedom. That recommendation is now going to the provost at DePaul for a final decision.

"I'm sad to no longer be teaching my students, or see their final projects," said D'Aquino. "I'm sad that I don't get a chance to say properly goodbye to them, or tell them how blown aawy I was by their creative and thoughtful work."

D'Aquino was surrounded by students as she spoke at the protest on campus Thursday. But she is not allowed back in her former classroom.

"My case is a reminder that if faculty and staff are not protected from the swift and severe reprimand of this university, students most certainly are not either," she said.

In early May, D'Aquino was teaching Health 194, Human Pathogens and Defense. The syllabus for the class said it explores microbiology research and its relevance to everyday life, current events, as well as microbiology knowledge to "big picture impacts on individuals and communities."

D'Aquino issued an optional assignment that asked students to focus on the biological effects of the war on Gaza. She said she wanted students to understand "the impacts of genocide on human biology."

D'Aquino chose her words referring to a report from the UN Human Rights Council in March, which found "reasonable grounds" that Israel is committing a genocide in Gaza. More than 36,000 Palestinians have been killed, according to the Gaza Health Ministry.

Two days after issuing that assignment, D'Aquino was fired.

In her termination letter, DePaul Health Sciences Department Chair Dr. Sarah Connolly wrote: "Students expressed significant concern about the introduction of political matters into the class. This has negatively impacted the learning environment. Our faculty handbook states that faculty are obligated to avoid significant intrusion of material unrelated to the course."

D'Aquino does not agree with the assessment.

"The assignment was, in fact, related to the course and its objectives," D'Aquino said. "For months, scientists and physicians have been warning about the spread of infectious disease in Gaza – due to starvation, malnutrition, overcrowding, destruction of critical water and sanitation infrastructure."

Student supporters delivered a petition with almost 1,500 signatures on it – calling for the reversal of D'Aquino's termination.

"We are demanding that she be reinstated," said third-year DePaul Ph.D. student John Gould.

A letter from the American Association of University Professors to DePaul University President Dr. Robert L. Manuel calls for the same. The letter, issued Wednesday, says the university must demonstrate "adequate cause" before dismissal – which the professors' association does not believe was done in D'Aquino's case.

The professors' association also said there was an "apparent absence of academic due process" and a violation of academic freedom.

DePaul DAquino Letter by Adam Harrington on Scribd

DePaul did not provide a response when asked about the letter.

D'Aquino herself hopes the provost agrees to reinstate her as the appeals board recommended.

"It would be great to be reinstated and be able to finish off this quarter – even though I know we're pretty much at the end of the quarter," she said. "I'd love to see my students' final projects. I'd love to say goodbye to them."

CBS 2 reached out to the university to find out when the provost has to respond to the board's recommendation – and to see if the university had any comment. The university would only say the review will be completed "soon."

D'Aquino is also planning to sue DePaul for breach of contract.

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Protecting IP Ownership and Rights in Poland: 6 Things Employers Need to Know

Jun 8, 2023

Doug Murray

Table of contents.

Your company's competitive edge lies in its intellectual property, but navigating the complexities of IP law can be a formidable task, especially when it comes to international jurisdictions.

When expanding your team or hiring in Poland , it’s essential to protect your company's inventions, designs, trademarks, copyrights, creative activities, and trade secrets from unauthorized claims or exploitation by others. However, safeguarding your intellectual property (IP) rights in Poland can be a daunting task, as they are regulated by both Polish law and European Union (EU) regulations. Neglecting to secure your company's IP rights and ownership can lead to costly legal disputes, a decrease in market share, and even damage to your brand reputation.

Read our primer for valuable insights on protecting your company's IP. Please note that while our guide aims to provide information, it isn’t intended to provide legal advice.

1. In Poland, NDAs are enforceable

Non-disclosure agreements (NDAs) are legally binding contracts in Poland. While common, it’s important that they’re prepared correctly and provide the scope of protection you need. Here are some caveats to be aware of:

NDAs need to meet legal requirements for being specific, reasonable, and not outside the public interest.
Certain information can't be covered by an NDA. For example, a company can't make employees sign an NDA to stop them from exposing criminal activity by the company.

2. Polish employers have the right to obtain employee patents—unless an agreement states otherwise

Polish Industrial Property Law—which regulates industrial property rights—states that for inventions created by an employee or contractor, the employer has the right to obtain the patent, unless there is an agreement stating otherwise. To protect information the employee or contractor helps create during their employment or contract, an IP assignment agreement may be required.

There are different versions of these contracts in different jurisdictions. If executed correctly, IP assignment agreements are legally binding contracts that also protect confidentiality. Note that errors may cause the agreement to be declared invalid.

Are you correctly classifying your Polish employees and contractors?

3. IP assignment agreements can be legally enforced

Legal protection of your IP rights in Poland are covered by a myriad of regulations and treaties. Poland’s IP regulations are based on those of the EU. The Polish Patent Office regulates inventions and patent applications, trademarks, integrated circuits topographies, geographical indications, and industrial design. Copyright protection falls under the purview of the Ministry of Culture and National Heritage. Poland is also a member of the World Trade Organization and the World Intellectual Property Organization (WIPO).

While IP assignment agreements are enforceable in Poland, there are some types of IP that can affect the implementation/requirements of an assignment agreement. For copyrights:

In Poland, copyright begins when the work is created—even if it is not complete. The author is granted moral rights (for example, the right to be identified as the author and the right to protect the integrity of the work) and economic rights (financial benefits). Moral rights cannot be assigned or transferred, while economic rights can, even to a third party. Moral rights can be limited by mutual agreement.
In most cases, the employer assumes IP rights within the framework of an employment contract.
The transfer of an author’s economic rights must be in writing for it to be legally binding.
Material must be created under the author’s work obligations.
The transfer of rights must be fully specified and include time frame (default is five years), geographic area, and the planned use of the IP including modifications. Termination conditions must be defined as well. Parties are free to define their own general rules.
Copyright terms apply to the author’s work, scientific work, or computer programs.

For patent rights and industrial designs:

In Poland a patent serves as the legal protection for an invention, granting exclusive rights to either the creator or their employer, if created under contractual arrangements. The duration of the protection period can extend up to 20 years from the date of registration. In the case of industrial designs, the protection rights cover a period of 25 years. Poland follows EU directives regarding patent rights. This means:

The patent can be filed by either party.
The right to a patent is determined by the employment (or stand-alone) contact between the employer and the worker.
The inventor is entitled to remuneration for use of the design. This can be included in a contract, otherwise it may be subject to a proportionality test that weighs criteria such as profits and employee contributions to the creation of the invention.

4. By default, contractors own the copyright to their work unless specified otherwise

Economic copyright refers to the financial benefit from the use of one’s work. In Poland, a written contract specifying the transfer of economic copyright is necessary. The contract must be in writing and cover usage. If the copyright is not transferred in this way, the contractor retains economic copyright.

5. You have to localize IP ownership clauses to Poland

Polish and EU IP laws are different from those in other countries, including the US. For example, international agreements protect most copyrighted works created in the US. But, because Poland doesn't employ the "work for hire" concept, in most cases intellectual property created in Poland is owned by the creator—unless there is a binding agreement (such as an employment contract that includes ownership provisions). Trademarks, designs, and patents need protection specific to Poland and the European Union.

Our team of experts can help you navigate the complexity of Polish IP law

6. Unlike in some countries, moral rights of an author cannot be transferred or waived

In Poland, creators of works are granted moral rights, which includes the right to preserve the integrity of their work and be acknowledged as its author. Moral rights cannot be transferred. However, these rights can be limited or partially waved by with a legally binding contract.

Frequently asked questions about IP law in Poland

Who owns ip in poland: employee or employer.

In Poland, employees or contractors are the rights holders of the IP if no agreement covering rights exists. However a work contract or assignment of rights agreement normally transfers economic rights to the employer. Moral rights remain with the worker, though these can be limited in an agreement. The transfer of economic rights does not include related rights, like derivative rights (works derived from the original work), unless such rights are specified.

What is an IP assignment agreement?

An IP assignment agreement entails the transfer of an owner's rights, title, and interest in specific intellectual property rights. The party transferring the rights gives up their ownership of IP rights, such as patents, trademarks, industrial designs, and copyrights to the party receiving them. Poland follows European IP protection regulations regarding these areas of intellectual property.

Which Polish and EU agencies deal with IP?

These are some of the agencies that oversee IP in Poland:

The Patent Office of the Republic of Poland : For matters regarding patent law and the protection of industrial property in Poland (located in Warsaw).
The European Patent Office : For applying for patents across multiple EU member states (headquartered in Munich, Germany).
Ministry of Culture and National Heritage : For copyright matters (located in Warsaw).
European Union Intellectual Property Office (EUIPO) : For EU-wide trademark protection (located in Alicante, Spain).

International treaties like the Patent Cooperation Treaty (patents) and the Madrid Protocol (trademarks) also help with the protection of IP in Poland.

Are IP regulations in Poland the same as in the US?

No. While there are general similarities—both countries are signatories to several World Intellectual Property Organization (WIPO) treaties and agreements—IP is protected differently in Poland. If you’re hiring contractors or employees in Poland, you need to protect your IP assets under Polish law. Some US copyrighted works are protected in Poland by international copyright agreements.

Can I protect my trademark in Poland?

You can apply to register your trademark at the Patent Office of the Republic of Poland. The application may be filed by a natural person (an individual) or a legal person (an entity such as a corporation) and all documentation must be in Polish. The process can take up to nine months to verify and approve the application. In addition, there is a three-month period for other parties to challenge the application. Upon approval, the trademark is protected from the filing date. Trademarks are approved for 10-year periods and can be renewed. It’s a good idea to retain a Polish law firm and use their local know-how to assist in trademark protection.

What’s the difference between an invention and a utility model?

An invention is new, innovative, and has the potential to be made or used in an industry. A patent grants the right to safeguard an invention to either the inventor or an assignee that holds the rights to the invention.

A utility model (also known as a minor or small patent) provides protection for improvements or adaptations of existing products. Utility models are usually utilized for advancements in mechanical technology. The principles governing the right to protection for a utility model are similar to those for an invention.

Run your global workforce with Rippling

With Rippling, you can onboard employees and contractors in just 90 seconds. Generate NDAs, PIIAs, offer letters, and any other documents you need, then easily send them out for e-signature.

Rippling allows you to manage HR, IT, and Finance in one unified system—and automate your global compliance work. See Rippling .

Looking to hire in Poland?

Rippling and its affiliates do not provide tax, accounting or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any related activities or transactions.

A Vancouver-based B2B and business trends writer, Doug is a charter member of the global workforce, having lived and worked out of Scotland, Ireland, Mexico, Guatemala, Ghana and, of course, Canada.

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