assignment governing law

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.

Founded in 1939, our law firm combines the ability to represent clients in domestic or international matters with the personal interaction with clients that is traditional to a long established law firm.

The Basics: What to consider when negotiating governing law and jurisdiction clauses

Parties negotiating any contract of substance, especially one with a cross border element, should consider the most appropriate form of dispute resolution for any disputes arising under it. Where litigation is the chosen forum, parties should agree both a governing law and a jurisdiction clause to help interpret the contract and resolve any future disputes. Too often, such clauses are only given proper consideration after a dispute has arisen and a party finds itself litigating in a jurisdiction it would not have chosen with its rights and remedies restricted by an unfamiliar law.

We consider the basics of what you need to know.

Governing law clauses, what they do and when Rome I and II may apply ;
Jurisdiction clauses, what they do, when the European Regime for determining jurisdiction applies and the position if there is a conflict ;
The possible effect of Brexit ;
Factors to consider when choosing a jurisdiction clause ; and
Some drafting tips .

Governing law clauses

What does the governing law clause do.

It enables the parties to specify what substantive law will govern the rights and obligations of the parties. It will be applied to interpret the contract and its effects if a dispute arises, thereby reducing uncertainty for both parties.

What are the consequences?

If you choose a governing law - which can cover both contractual and non-contractual obligations and disputes (subject to certain exceptions) - make sure you know the consequences of that choice. Some legal systems have very different rules on, for example, the recoverability of damages and the circumstances in which you can terminate a contract and the consequences of termination.

What if there is no governing law clause?

If no governing law clause is included and a dispute arises, the court hearing the dispute is likely first to have to determine what law applies to the contract (and any non-contractual obligations) before it can resolve the dispute.

Where at least one of the parties is based in an EU Member State, the Rome I Regulation (for contracts concluded on or after 17 December 2009) and Rome II Regulation (which has applied from 11 January 2009 for non-contractual disputes - such as negligence, misrepresentation, product liability) provide a prescriptive set of rules to determine the governing law. Under Rome I, specific rules apply to different types of contract but in most cases the applicable law is that of the country where the party with characteristic performance of the contract has his/her/its habitual residence. Under Rome II the applicable law is generally the law of the country in which the damage occurs or is likely to occur. However, it may also be that of the country in which both parties have their 'habitual residence' or the country most 'closely connected' to the underlying tort. There are also specific rules for certain types of claims under Rome II.

Invariably, costs and delay can be incurred in arguing over 'habitual residence' and 'close connection' and the ultimate result may be that a very unfamiliar law governs the contract or tortious claim (and remedies) and those rules may not favour you.

Where a court outside the EU has jurisdiction, the conflict of law rules that will be applied to determine the governing law vary from country to country, again introducing an element of uncertainty and potential costs.

Are parties always free to choose the governing law?

In some situations, even if you do choose a governing law, Rome I and II will not allow the parties to use their choice of governing law to get around certain "mandatory rules" of the country where the case is to be heard or where all the relevant elements at the time of the choice are situated.

Can there be more than one governing law?

It is possible, but rarely sensible, and will almost always lead to confusion.

Should the governing law accord with the jurisdiction?

It is usual for the governing law to coincide with the jurisdiction clause but there is no requirement for it. Although the English courts are experienced in applying foreign law, the foreign law must be pleaded and proved as a fact, usually through evidence of a qualified lawyer from the relevant jurisdiction. Again, this can add uncertainty, time and costs to the litigation.

Jurisdiction clauses

What does the jurisdiction clause do.

It enables the parties to agree at the outset of the contract which country's courts will hear any disputes that arise under it. This means parties can avoid (generally) jurisdictions that they might consider less desirable or predictable. Failure to agree your chosen forum could mean that even a strong case is commercially not worthwhile pursuing. If the parties agree a particular court within the EU has exclusive jurisdiction this will generally prevent claims being brought in any other courts within the EU.

What if there is a dispute over the jurisdiction clause?

Although a jurisdiction clause will not always prevent a party from issuing proceedings in another court, if there is any disagreement as to venue that dispute must be resolved first.

What if there is no jurisdiction clause?

Where there is no clause, the basic rules of the Recast Brussels Regulation (for proceedings instituted on or after 10 January 2015) or 2001 Brussels Regulation (for proceedings instituted before 10 January 2015) (together the European Regime) apply. Under the European Regime, an EU domiciled defendant must be sued in the courts of the Member State of his/her domicile (in the case of an individual), or its place of statutory seat, central administration or principal place of business (for a company), subject to certain exceptions and constraints. In contractual claims, a defendant may be sued in the place of performance of the obligation in question.

Courts outside the EU will apply their own rules to determine whether they have jurisdiction. Non EU domiciled defendants may be sued in the English court if one or more certain prescribed connections to England are established.

What if there is a conflict between a jurisdiction clause and the European Regime?

Member States have exclusive jurisdiction in relation to some types of dispute regardless of domicile (for example claims relating to immovable property, certain questions of company law etc). Where the Member States have such exclusive jurisdiction this will override anything the parties may have otherwise agreed in a contractual jurisdiction clause and the court nominated will decline jurisdiction if claims are issued before them in breach.

Where one party is from an EU Member State (except Denmark) and another is from Mexico or Singapore, then the rules of the Hague Convention on Choice of Court Agreements (the Hague Convention), under which exclusive jurisdiction clauses are required to be recognised and enforced, will need to be considered.

What will Brexit do to the European regime?

The UK's position is that when it exits the EU, the European Regime will cease to apply. Although both parties seem keen to replicate the existing system in some way, it may be that other agreements to which the UK is party (for example the Hague Convention) take on new importance. With this uncertainty, it is all the more important to understand the consequences of governing law and jurisdiction and to specify English law and jurisdiction in a contract if that is appropriate.

What factors should be considered when choosing a jurisdiction clause?

Which court is the most practical and convenient? Your home court? Where would any witnesses be located? Are there language issues?
What are the respective procedural systems for the competing jurisdictions ? Some jurisdictions have onerous disclosure obligations (the U.S.), some have very little in the way of disclosure (France). Costs follow the event in some places (England & Wales) but not in others (the US). Consider also the rules of evidence, whether the system is inquisitorial (many continental European countries) or adversarial (most common law countries), whether there are specialist courts and judges, the speed of the litigation process and cost generally, the availability of appeals and the quality of the judges (and lawyers). The English judiciary has a reputation for quality, independence, impartiality and integrity.
How easy is enforcement? Claimants should consider litigating in the place where the assets are located to avoid having to transport a judgment from elsewhere: the rules on enforcing foreign judgments can be complex.
Should the jurisdiction clause be exclusive (i.e. the parties can only go to that location) or non-exclusive (the parties can litigate elsewhere)? This is a question of certainty (exclusive) against flexibility (non-exclusive). In some cases an asymmetric jurisdiction clause may be agreed, so that party A can sue party B in any jurisdiction, but party B can sue party A only in the specified jurisdiction. This clause typically occurs where there is an imbalance of bargaining power, for example between a lender and borrower. However, this is not universally accepted - the law of some countries does not recognise these as valid jurisdiction clauses making enforcement difficult or potentially impossible.
Is a jurisdiction clause appropriate at all? Is arbitration or some other form of Alternative Dispute Resolution (ADR) more appropriate to resolve the dispute?

Consider the following drafting tips

Include express governing law and jurisdiction clauses in the contract; seeking to imply them by reference to other contracts or documents can prove difficult.
Draft the clause so that it is wide enough to cover both contractual and non-contractual disputes which may arise, for example for misrepresentation claims. Specify whether it is exclusive or non-exclusive.
Unless there is good reason not to do so, ensure the governing law and jurisdiction clauses are compatible with each other.

The inclusion of clear provisions on governing law and jurisdiction in a contract as referred to above, should ultimately assist in any dispute being determined under the law and in the courts chosen by the parties.

For more information or guidance on governing law and jurisdiction clauses, or other help on dispute resolution, contact Gordon Bell .

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Assign is the act of transferring rights , property , or other benefits to another party (the assignee ) from the party who holds such benefits under contract (the assignor). 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.
Here, A has both: (1) assigned A’s rights under the contract to the $50; and (2) delegated A’s duty to teach guitar, to C.
In this example, A is both the “assignor” and the “delegee” who delegates the duties to another (C), C is known as the “ obligor ” who must perform the obligations to the assignee , and B is the assignee who is owed duties and is liable to the obligor.

Assigning of Rights/Duties Under Contract Law

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, they cannot assign their future right to an assignee.

That is, if A has not yet contracted with B to teach B guitar, A cannot assign their rights to C.

Second, rights cannot be assigned when they materially change the obligor’s duty and rights.

Third, the obligor can sue the assignee directly if the assignee does not pay them.

Following the previous example, this means that C ( obligor ) can sue B ( assignee ) if C teaches guitar to B, but B does not pay C $50 in return.

Delegation of Duties

If the promised performance requires a rare genius or skill, then the delegee cannot delegate it to the obligor. It can only be delegated if the promised performance is more commonplace. Further, an obligee can sue if the assignee does not perform. However, the delegee is secondarily liable unless there has been an express release of the delegee.

Meaning if B does want C to teach guitar but C refuses to, then B can sue C. If C still refuses to perform, then B can compel A to fulfill the duties under secondary liability.

Lastly, a related concept is novation , which is when a new obligor substitutes and releases an old obligor. If novation occurs, then the original obligor’s duties are wiped out. Novation requires an original obligee’s consent .

Property Law

Under property law , assignment typically arises in landlord-tenant situations.

For example, A might be renting from landlord B but wants another party (C) to take over the property.
In this scenario, A might choose between assigning and subleasing the property to C.
If assigning , A would give C the entire balance of the term , with no reversion to anyone; whereas if subleasing , A would give C the property for a limited period of the remaining term.
Under assignment, C would have privity of estate with the landlord while under a sublease, C would not.

[Last updated in June of 2022 by the Wex Definitions Team ]

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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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Assignment Clause

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Contract Clauses

Acceleration Clause
Arbitration Clause
Cancellation Clause
Choice of Law Clause
Confidentiality Clause
Consideration Clause
Definitions Clause
Dispute Resolution Clause
Entire Agreement Clause
Escalation Clause
Exclusivity Clause
Exculpatory Clause
Force Majeure Clause
Governing Law Clause
Indemnification Clause
Indemnity Clause
Insurance Clause
Integration Clause
Merger Clause
Non-Competition Clause
Non-Disparagement Clause
Non-Exclusivity Clause
Non-Solicitation Clause
Privacy Clause
Release Clause
Severability Clause
Subordination Clause
Subrogation Clause
Survival Clause
Termination Clause
Time of Essence Clause

Jump to Section

Assignment clause defined.

Assignment clauses are legally binding provisions in contracts that give a party the chance to engage in a transfer of ownership or assign their contractual obligations and rights to a different contracting party.

In other words, an assignment clause can reassign contracts to another party. They can commonly be seen in contracts related to business purchases.

Here’s an article about assignment clauses.

Assignment Clause Explained

Assignment contracts are helpful when you need to maintain an ongoing obligation regardless of ownership. Some agreements have limitations or prohibitions on assignments, while other parties can freely enter into them.

Here’s another article about assignment clauses.

Purpose of Assignment Clause

The purpose of assignment clauses is to establish the terms around transferring contractual obligations. The Uniform Commercial Code (UCC) permits the enforceability of assignment clauses.

Assignment Clause Examples

Examples of assignment clauses include:

Example 1 . A business closing or a change of control occurs
Example 2 . New services providers taking over existing customer contracts
Example 3 . Unique real estate obligations transferring to a new property owner as a condition of sale
Example 4 . Many mergers and acquisitions transactions, such as insurance companies taking over customer policies during a merger

Here’s an article about the different types of assignment clauses.

Assignment Clause Samples

Sample 1 – sales contract.

Assignment; Survival . Neither party shall assign all or any portion of the Contract without the other party’s prior written consent, which consent shall not be unreasonably withheld; provided, however, that either party may, without such consent, assign this Agreement, in whole or in part, in connection with the transfer or sale of all or substantially all of the assets or business of such Party relating to the product(s) to which this Agreement relates. The Contract shall bind and inure to the benefit of the successors and permitted assigns of the respective parties. Any assignment or transfer not in accordance with this Contract shall be void. In order that the parties may fully exercise their rights and perform their obligations arising under the Contract, any provisions of the Contract that are required to ensure such exercise or performance (including any obligation accrued as of the termination date) shall survive the termination of the Contract.

Reference :

Security Exchange Commission - Edgar Database, EX-10.29 3 dex1029.htm SALES CONTRACT , Viewed May 10, 2021, < https://www.sec.gov/Archives/edgar/data/1492426/000119312510226984/dex1029.htm >.

Sample 2 – Purchase and Sale Agreement

Assignment . Purchaser shall not assign this Agreement or any interest therein to any Person, without the prior written consent of Seller, which consent may be withheld in Seller’s sole discretion. Notwithstanding the foregoing, upon prior written notice to Seller, Purchaser may designate any Affiliate as its nominee to receive title to the Property, or assign all of its right, title and interest in this Agreement to any Affiliate of Purchaser by providing written notice to Seller no later than five (5) Business Days prior to the Closing; provided, however, that (a) such Affiliate remains an Affiliate of Purchaser, (b) Purchaser shall not be released from any of its liabilities and obligations under this Agreement by reason of such designation or assignment, (c) such designation or assignment shall not be effective until Purchaser has provided Seller with a fully executed copy of such designation or assignment and assumption instrument, which shall (i) provide that Purchaser and such designee or assignee shall be jointly and severally liable for all liabilities and obligations of Purchaser under this Agreement, (ii) provide that Purchaser and its designee or assignee agree to pay any additional transfer tax as a result of such designation or assignment, (iii) include a representation and warranty in favor of Seller that all representations and warranties made by Purchaser in this Agreement are true and correct with respect to such designee or assignee as of the date of such designation or assignment, and will be true and correct as of the Closing, and (iv) otherwise be in form and substance satisfactory to Seller and (d) such Assignee is approved by Manager as an assignee of the Management Agreement under Article X of the Management Agreement. For purposes of this Section 16.4, “Affiliate” shall include any direct or indirect member or shareholder of the Person in question, in addition to any Person that would be deemed an Affiliate pursuant to the definition of “Affiliate” under Section 1.1 hereof and not by way of limitation of such definition.

Security Exchange Commission - Edgar Database, EX-10.8 3 dex108.htm PURCHASE AND SALE AGREEMENT , Viewed May 10, 2021, < https://www.sec.gov/Archives/edgar/data/1490985/000119312510160407/dex108.htm >.

Sample 3 – Share Purchase Agreement

Assignment . Neither this Agreement nor any right or obligation hereunder may be assigned by any Party without the prior written consent of the other Parties, and any attempted assignment without the required consents shall be void.

Security Exchange Commission - Edgar Database, EX-4.12 3 dex412.htm SHARE PURCHASE AGREEMENT , Viewed May 10, 2021, < https://www.sec.gov/Archives/edgar/data/1329394/000119312507148404/dex412.htm >.

Sample 4 – Asset Purchase Agreement

Assignment . This Agreement and any of the rights, interests, or obligations incurred hereunder, in part or as a whole, at any time after the Closing, are freely assignable by Buyer. This Agreement and any of the rights, interests, or obligations incurred hereunder, in part or as a whole, are assignable by Seller only upon the prior written consent of Buyer, which consent shall not be unreasonably withheld. This Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.

Security Exchange Commission - Edgar Database, EX-2.1 2 dex21.htm ASSET PURCHASE AGREEMENT , Viewed May 10, 2021, < https://www.sec.gov/Archives/edgar/data/1428669/000119312510013625/dex21.htm >.

Sample 5 – Asset Purchase Agreement

Assignment; Binding Effect; Severability

This Agreement may not be assigned by any party hereto without the other party’s written consent; provided, that Buyer may transfer or assign in whole or in part to one or more Buyer Designee its right to purchase all or a portion of the Purchased Assets, but no such transfer or assignment will relieve Buyer of its obligations hereunder. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the successors, legal representatives and permitted assigns of each party hereto. The provisions of this Agreement are severable, and in the event that any one or more provisions are deemed illegal or unenforceable the remaining provisions shall remain in full force and effect unless the deletion of such provision shall cause this Agreement to become materially adverse to either party, in which event the parties shall use reasonable commercial efforts to arrive at an accommodation that best preserves for the parties the benefits and obligations of the offending provision.

Security Exchange Commission - Edgar Database, EX-2.4 2 dex24.htm ASSET PURCHASE AGREEMENT , Viewed May 10, 2021, < https://www.sec.gov/Archives/edgar/data/1002047/000119312511171858/dex24.htm >.

Common Contracts with Assignment Clauses

Common contracts with assignment clauses include:

Real estate contracts
Sales contract
Asset purchase agreement
Purchase and sale agreement
Bill of sale
Assignment and transaction financing agreement

Assignment Clause FAQs

Assignment clauses are powerful when used correctly. Check out the assignment clause FAQs below to learn more:

What is an assignment clause in real estate?

Assignment clauses in real estate transfer legal obligations from one owner to another party. They also allow house flippers to engage in a contract negotiation with a seller and then assign the real estate to the buyer while collecting a fee for their services. Real estate lawyers assist in the drafting of assignment clauses in real estate transactions.

What does no assignment clause mean?

No assignment clauses prohibit the transfer or assignment of contract obligations from one part to another.

What’s the purpose of the transfer and assignment clause in the purchase agreement?

The purpose of the transfer and assignment clause in the purchase agreement is to protect all involved parties’ rights and ensure that assignments are not to be unreasonably withheld. Contract lawyers can help you avoid legal mistakes when drafting your business contracts’ transfer and assignment clauses.

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

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Kerbis' practice includes business and real estate transactions, estate planning, and limited scope litigation consulting. Mathew has negotiated deals involving multinational corporate franchises and has collectively helped hundreds of clients with their transactional, civil litigation, and appellate legal needs. Throughout his tenure as an American Bar Association leader, Mathew has advocated for legal education reform, interviewed ABA Presidents and State Appellate and Supreme Court Justices, and lobbied Congress on behalf of the legal profession. As a law student, Mathew served as an extern for the Honorable Justice Robert E. Gordon of the Illinois Appellate Court, First District.

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This assignment and assumption of agreement is between , an individual a(n) (the " Assignor ") and , an individual a(n) (the " Assignee ").

The Assignor and , an individual a(n) (the " Other Party "), entered an agreement dated (the " Agreement "), a copy of which is attached as Exhibit A .

Under section of the Agreement relating to assignments, the Assignor may assign the Agreement to the Assignee and the Other Party wants to permit this assignment.

The parties therefore agree as follows:

1. ASSIGNMENT.

The Assignor assigns to the Assignee of all its rights in, and delegates to the Assignee all of its obligations under, the Agreement. This transfer will become effective on (the " Effective Date "), and will continue until the current term of the Agreement ends.

2. ASSUMPTION OF RIGHTS AND DUTIES.

After the Effective Date, the Assignee shall assume all rights and duties under the Agreement. The Assignor will have no further obligations under the Agreement The Assignor will remain bound to the Other Party under the Agreement for the following purposes: . However, the Assignor remains responsible for obligations accruing before the Effective Date.

3. INCONSISTENCY.

If there is a conflict between this assignment and the Agreement, the terms of this assignment will govern.

4. AGREEMENT CONTINUANCE.

Except as expressly modified and supplemented by this assignment, all other terms in the Agreement remain in full effect and continue to bind the parties, including the prohibition against further assignments without the Other Party's express written consent.

5. ASSIGNOR'S REPRESENTATIONS .

The Assignor represents that:

(a) it is the lawful and sole owner of the interests assigned under this assignment;
(b) it has not previously assigned its rights under the Agreement;
(c) the interests assigned under this assignment are free from all encumbrances; and
(d) it has performed all obligations under the Agreement.

6. INDEMNIFICATION.

(a) Of Other Party by Assignee. The Assignee shall indemnify the Other Party against all claims, actions, judgments, liabilities, proceedings, and costs, including reasonable attorney's fees and other costs of defense, resulting from the Assignee's performance under the Agreement after the Effective Date.
(b) Of Other Party by Assignor. The Assignor shall indemnify the Other Party against all claims, actions, judgments, liabilities, proceedings, and costs, including reasonable attorneys' fees and other costs of defense, resulting from the Assignor's performance under the Agreement before the Effective Date. With respect to claims, actions, judgments, liabilities, proceedings, and costs resulting from the Assignee's performance under the Agreement after the Effective Date, the Other Party shall look first to the Assignee to satisfy those claims, actions, judgments, liabilities, proceedings and costs, including reasonable attorneys' fees and other costs of defense.
(c) Of Assignee by Assignor. The Assignor shall indemnify the Assignee against all claims, actions, judgments, liabilities, proceedings, and costs, including reasonable attorneys' fees and other costs of defense, that may after the Effective Date be suffered by or asserted against the Assignee because of the Assignor's failure to have performed, before the Effective Date, all of the Assignor's obligations under the Agreement or because of any other claims accruing before the Effective Date that may be asserted with respect to the Agreement.
(d) Of Assignor by Assignee. The Assignee shall indemnify the Assignor against all claims, actions, judgments, liabilities, proceedings, and costs, including reasonable attorneys' fees and other costs of defense, that may after the Effective Date be suffered by or asserted against the Assignor because of the Assignee's failure to have performed, after the Effective Date, all of the Assignor's obligations under the Agreement or because of any other claims accruing after the Effective Date that may be asserted with respect to the Agreement.

7. COUNTERPARTS; ELECTRONIC SIGNATURES.

(a) Counterparts. The parties may execute this assignment in any number of counterparts, each of which is an original but all of which constitute one and the same instrument.
(b) Electronic Signatures. This assignment, agreements ancillary to this assignment, and related documents entered into in connection with this assignment are signed when a party's signature is delivered by facsimile, email, or other electronic medium. These signatures must be treated in all respects as having the same force and effect as original signatures.

8. SEVERABILITY.

If any provision contained in this assignment is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this assignment, but this assignment will be construed as if the invalid, illegal, or unenforceable provisions had never been contained in it, unless the deletion of those provisions would result in such a material change so as to cause completion of the transactions contemplated by this assignment to be unreasonable.

No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this assignment will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, and no waiver will constitute a continuing waiver, unless the writing so specifies.

10. ENTIRE AGREEMENT.

This assignment, together with the Agreement, constitutes the final agreement of the parties. It is the complete and exclusive expression of the parties' agreement with respect to its subject matter. All prior and contemporaneous communications, negotiations, and agreements between the parties relating to the subject matter of this assignment are expressly merged into and superseded by this assignment. The provisions of this assignment may not be explained, supplemented, or qualified by evidence of trade usage or a prior course of dealings. No party was induced to enter this assignment by, and no party is relying on, any statement, representation, warranty, or agreement of any other party except those set forth expressly in this assignment. Except as set forth expressly in this assignment, there are no conditions precedent to this assignment's effectiveness.

11. HEADINGS.

The descriptive headings of the sections and subsections of this assignment are for convenience only, and do not affect this assignment's construction or interpretation.

12. EFFECTIVENESS.

This assignment will become effective when all parties have signed it. The date this assignment is signed by the last party to sign it (as indicated by the date associated with that party's signature) will be deemed the date of this assignment.

13. NECESSARY ACTS; FURTHER ASSURANCES.

Each party shall use all reasonable efforts to take, or cause to be taken, all actions necessary or desirable to consummate and make effective the transactions this assignment contemplates or to evidence or carry out the intent and purposes of this assignment.

[SIGNATURE PAGE FOLLOWS]

Each party is signing this assignment on the date stated opposite that party's signature.

The Other Party hereby acknowledges and consents to the above assignment and assumption, and as of its effective date, releases the Assignor from all future obligation and liability under the Agreement. In executing its consent to this assignment, the Other Party does not release the Assignor from any claims or remedies it may have against the Assignor under the Agreement.

In executing its consent to this assignment, the Other Party does not release the Assignor from any claims or remedies it may have against the Assignor under the Agreement.

[PAGE BREAK HERE]

EXHIBIT A Attach copy of original agreement

Free Assignment of Agreement Template

Transfer work responsibilities efficiently with an assignment of agreement. facilitate a smooth transition from one party to another..

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How-to guides, articles, and any other content appearing on this page are for informational purposes only, do not constitute legal advice, and are no substitute for the advice of an attorney.

Assignment of agreement: How-to guide

Assignment agreements are foundational documents in legal transactions that enable the transfer of contractual rights and responsibilities from one party to another. Understanding the complexities of assignment agreements is critical for individuals and corporations alike. In this detailed article, we will look at the specifics of assignment agreements, from their concept to practical uses.

What is an assignment of agreement?

An assignment agreement is a legal procedure that transfers contractual rights and duties from the original party (the assignor) to a third party (the assignee). This transfer includes substituting one party for another, with the assignee taking over the rights and contractual obligations indicated in the original contract. Assignment agreements are critical in many legal transactions, facilitating the smooth transfer of interests while maintaining the integrity of contractual relationships.

When do you need an assignment agreement?

You may need an assignment agreement in various scenarios where the transfer of contractual rights and obligations is required. Some common situations include:

1. Business acquisitions : When acquiring a business, you may need to assign existing contracts to ensure the smooth transition of rights and responsibilities to the new owner.

2. Real estate transactions : Assignment agreements are often used in real estate deals to transfer leases, mortgages, or other property interests from one party to another.

3. Intellectual property transfers : Assignments play a crucial role in transferring intellectual property rights, such as patents ( patent assignment ), trademarks ( trademark assignment ), and copyrights ( copyright assignment ), from one entity to another.

4. Employment arrangements : Assignment agreements may be necessary to transfer employment contracts from one employer to another in mergers, acquisitions, or corporate restructuring.

5. Contractual agreements : Any situation where one party wishes to delegate its rights or obligations under a contract to another party may necessitate an assignment agreement.

By utilizing assignment agreements in these scenarios, parties can ensure the seamless transfer of rights and obligations, protect their interests, and mitigate potential disputes.

What are the elements of an assignment agreement?

The primary element in an assignment agreement is the transfer of rights and contractual obligations from the assignor to the assignee. This transfer ensures that the assignee assumes the same rights and obligations originally outlined in the contract.

Assumption of rights and duties

Upon accepting the assignment, the assignee takes over all the rights and duties specified in the original contract. This includes responsibilities, privileges, and obligations previously held by the assignor.

Inconsistencies

To address any discrepancies between the terms of the assignment and the existing contract, it's essential to include provisions outlining how to resolve such differences or disputes. Clarity in addressing inconsistencies helps ensure the enforceability of the agreement.

Agreement continuance

Despite changes in the parties involved, the terms and conditions of the existing contract typically continue to govern the relationship between the parties. This continuity ensures that the contractual obligations remain in effect following the assignment.

Assignor's representations

The assignor asserts the legality of the assignment and the rights being transferred. These representations assure the assignee of the transaction's legitimacy and legality.

Indemnification

Indemnity provisions must be added to protect the assignee from any liabilities that result from the assignment. These provisions safeguard the assignee from losses, damages, or obligations arising from the assignor's actions or omissions.

Proper execution of the assignment agreement requires the signatures of all parties concerned. Obtaining signatures assures formal recognition and approval of the conditions of the agreement.

Including clear and detailed headings in the assignment agreement will help organize the document and guide the parties through its content. These titles improve reading and understanding, decreasing uncertainty and ambiguity while interpreting the agreement.

Effectiveness

Add the clauses addressing the effectiveness of the assignment agreement. Establish the date or conditions under which the assignment takes effect, providing clarity and certainty to the parties concerned.

Necessary acts

To enable a smooth and efficient transfer of interests, include provisions requiring the parties to perform specified activities or meet specific responsibilities to complete the assignment, such as obtaining third-party approval or signing supplementary agreements.

Severability

Severability clauses are added to guarantee that the assignment agreement remains enforceable even if a court declares specific terms or sections unlawful or unenforceable. By incorporating severability clauses, parties ensure the agreement's overall enforceability, as the other sections will stay in effect.

Waiver provisions allow any party to voluntarily surrender rights or duties in an assignment agreement. These provisions allow parties to waive particular rights or responsibilities mentioned in the agreement, allowing flexibility and mutual consent to change certain aspects as needed.

Entire agreement

This phrase indicates that the assignment agreement is the complete understanding of the parties concerned. By incorporating an entire agreement language, the parties certify that the terms and conditions of the assignment agreement override any earlier agreements, conversations, or understandings, whether oral or written. This provision helps avoid conflicts arising from misunderstandings or competing provisions outside of the written agreement.

Together, these components create the structure of an assignment agreement, assuring clarity, enforceability, and legal compliance.

What are the governing laws guiding assignment agreements?

In the United States, the assignment of agreements is controlled by both federal government and state legislation, as well as common law principles. Federal laws, such as the Uniform Commercial Code (UCC), may apply to some components of assignment agreements, particularly those involving the transfer of goods and commercial transactions.

Contract law legislation and regulations differ by state, and each state may have its procedures for enforcing and interpreting assignment agreements. In addition, courts may use common law concepts and precedents established via case law to address problems involving assignment agreements.

Ensure that the assignment complies with the terms of the original contract, get any necessary consents from relevant parties, and adhere to any statutory or contractual limits on assignment. A violation of public policy or legislative prohibitions could make an assignment unlawful or unenforceable.

What are the best practices for drafting assignment agreements?

Assignment agreements must be drafted with great attention to detail and by best practices to guarantee clarity, enforceability, and protection of the parties' interests. Here are some significant points to keep in mind.

Writing simple and comprehensible language

Avoid using vague or ambiguous language that could lead to misunderstandings or disputes. Instead, use clear and precise language to outline the rights, duties, and obligations of each party. Define terms explicitly to avoid interpretation issues.

Including “consideration”

Include consideration, such as monetary compensation or services rendered, to validate the agreement. Failing to do so can invalidate the agreement, so ensure that valuable consideration is exchanged between the parties.

Obtaining consent

Before assigning rights, obtain written consent from all relevant parties involved. Assigning rights without necessary consent may render the assignment unenforceable, so verify consent requirements and obtain written consent to ensure validity and enforceability.

Including indemnification clause

Include indemnification clauses to protect parties from liabilities arising from the assignment. Specify the scope and limitations of indemnification to avoid disputes and safeguard against losses, damages, or liabilities resulting from actions or omissions.

Identifying applicable laws and regulations

Conduct thorough research to identify federal, state, and local laws governing assignment agreements. Compliance with applicable laws and regulations is essential to avoid non-compliance and legal challenges.

Adding severability clause

Include severability clauses to guarantee that the entire agreement is enforceable. If any term is invalid, severability clauses require that the remaining sections stay in effect, ensuring the agreement's overall enforceability.

Specifying the governing law

Designate the governing law of the assignment agreement to avoid uncertainty in case of disputes. Specify the jurisdiction whose laws will govern the interpretation and enforcement of the agreement.

Seeking legal counsel

Engage qualified legal counsel experienced in contract law to assist in drafting, reviewing, and negotiating assignment agreements. Legal professionals can provide invaluable expertise and ensure compliance with legal requirements.

For individuals and businesses seeking a convenient and reliable resource to draft assignment agreements, LegalZoom offers a free assignment agreement template. This template provides a structured framework for creating comprehensive assignment agreements, incorporating key provisions to protect the interests of all parties involved.

In conclusion, assignment agreements are critical tools in legal transactions because they allow for the clear and precise transfer of contractual rights and duties. Understanding the aspects of assignment agreements, recognizing their practical uses, and adhering to legal concerns allows parties to confidently traverse complicated contractual relationships and preserve the integrity of their transactions.

Frequently asked questions

What does an assignment of agreement mean.

An assignment agreement allows a party to transfer their contract's obligations and rights to another party, provided it's permitted under the original agreement. This can be beneficial for various reasons, such as changes in business circumstances, local laws, or market conditions. Here's what you'll need to complete your assignment agreement:

Assignor information : Gather the name and contact details of the party transferring their rights and duties
Assignee information : Obtain the information of the party who will assume the responsibilities under the agreement
Other party information : Know the details of the other party involved in the original agreement

What is the purpose of the assignment agreement?

The purpose of the assignment contract is to allow a party to transfer their contractual rights and obligations to another party, with consent, under the terms of the original agreement.

How do you assign an agreement?

To assign an agreement, you typically need to obtain consent from all relevant parties involved in the original contract and then draft an assignment agreement outlining the transfer of rights and obligations to the new party.

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The CFPB Ruling Strikes a Blow for Governing

Instead of giving in to cynicism, Congress created an agency to protect consumers. The Supreme Court declined to overrule it.

by David Dayen

May 17, 2024

Bill Clark/CQ Roll Call via AP Images

The CFPB’s effectiveness is inherently tied to its structure; it gets its budget from the Federal Reserve, rather than from congressional appropriators.

There’s an old line from The Simpsons that I think accurately summarizes some of the more pernicious approaches to politics these days. “Kids,” says Homer to Bart and Lisa, “you tried your best, and you failed miserably. The lesson is, never try.”

Certainly, there are some days in politics when it’s tempting to lean in that direction. Virulently conservative courts routinely take laws passed by Democratic Congresses, or agency rules that proceed from those laws promulgated by Democrats, and nullify them based on their own ideological preferences, with the fig leaf of some invented doctrine limply covering those courts’ real motivations. In those moments, “never try” can sound positively reasonable.

But that would give no purpose to politics at all, and rob the nation of the progress that can penetrate the judicial wall.

The Supreme Court’s ruling on Thursday upholding the Consumer Financial Protection Bureau’s funding mechanism, written by none other than Justice Clarence Thomas, is a good example. The doomerist position on the CFPB would be that any new-sounding agency will invariably be tossed out by small-c (and big-C) conservative justices, and the energy expended on defending it would be better put to use elsewhere. Maybe the focus should be put on winning elections to get a better balance of judges, or changing the rules for the judiciary, or homing in on states with Democratic control that would be more receptive to aggressive consumer protection.

Governing the grid for the future: The case for a Federal Grid Planning Authority

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Subscribe to the economic studies bulletin, shelley welton shelley welton presidential distinguished professor of law and energy policy - university of pennsylvania carey law school.

May 22, 2024

The electricity grid is the backbone of a successful clean energy transition. A strong grid will connect new clean energy resources to population centers and support the electrification of transport, heating, and cooking. It will also integrate, balance, and smooth variable resources across the country, enhancing reliability in the face of mounting climate disasters. Furthermore, it will lower the cost of system transformation by enabling more robust national coordination of resources.

In this policy proposal, Shelley Welton (University of Pennsylvania-Carey School of Law and the Kleinman Center for Energy Policy) makes the case that a more fundamental reexamination of how the grid is planned and paid for is a critical prerequisite to accomplishing the rapid infrastructural shift necessary to address climate change. Most boldly, the paper traces how the Federal Energy Regulatory Commission (FERC) could use its remedial authority to disallow utilities from pursuing parochial, expensive grid expansions while requiring robust regional and interregional planning and cost allocation. More modestly, it argues that applying a governance lens on the problems plaguing the grid highlights the importance and viability of numerous smaller steps that regulators could take to improve oversight and transparency in grid governance.

The grid and its transformation

The grid’s central function is to deliver power from entities that make electricity (generators) to entities that consume electricity, also known as “load.” This electricity travels first through larger transmission lines, down into smaller distribution lines that connect to homes and businesses. FERC is the primary regulator of these interstate transmission lines, whereas distribution lines are left to state regulation. Consequently, this paper’s analytical focus is on utilities under FERC’s jurisdiction: investor-owned utilities that own interstate transmission lines. In most parts of the country, Regional Transmission Organizations (RTOs) run the grid. These are essentially collections of utilities that have assembled to jointly manage their systems under the aegis of a non-profit operator. In other regions, utilities manage their own systems and regional transmission development occurs through loose utility collaborations. Under either structure, the system is planned and run by industry incumbents that have limited interest in facilitating change.

Simultaneously, this system is under exorbitant pressure to adapt: As reliability falters under intensifying weather events, demand for clean electricity is swelling. A December 2023 report found that “over the past year, grid planners nearly doubled the 5-year load growth forecast,” from 2.6 percent to 4.7 percent. The Biden Administration and numerous states now share an ambition to transition the U.S. electricity system to 100 percent clean energy by 2035. Yet, expert modeling shows that up to 80 percent of the benefits of Inflation Reduction Act (IRA) investments in clean energy, the country’s primary legal mechanism for decarbonization, will be lost without accompanying grid upgrades. Thus, although large, the grid is not nearly large enough—or interconnected enough.

The challenge

Interconnection. For a new electricity resource to deliver power, it must first be interconnected into the grid. The process of doing so is managed by the regional grid operator—either an RTO or individual utility. When a developer wants to interconnect a new resource, it submits to its regional operator an interconnection request and is placed in an “interconnection queue.” This process for managing interconnection has caused severe challenges as new generation has shifted away from large fossil fuel generators toward smaller, more dispersed renewable energy resources. The number of interconnection requests has quintupled in the last decade, creating major backlogs in interconnection queues. In fact, there is more energy now waiting to enter the U.S. grid than there is on the grid in total. Due to ballooning costs and increasing wait times, only 21 percent of projects that enter interconnection queues get constructed.

Transmission planning. Recognizing the importance of forward planning to the development of adequate transmission capacity in the right places, FERC has long required utilities to engage in transmission planning. The regional plans emerging from these processes are supposed to consider reliability, economic, and public-policy-driven transmission needs and select a suite of regional projects to meet these needs in a cost-effective manner. These requirements are sound in theory; in practice, they have produced disappointing results. Regions rarely engage in successful interregional planning or projects and open-ended guidance for how to pay for large lines compounds planning challenges. Even if a regional or interregional project makes it through the planning and cost allocation stages, there remains the immense challenge of getting the project permitted and sited. For all of these reasons, transmission projects typically take five to 10 years to plan, develop, and construct—with some of the most effective and ambitious regional and interregional projects taking 15 or 20 years.

Reliability. A final electric grid challenge that has made headlines recently is its faltering reliability. Fingers are often pointed at renewable energy, even though there is ample modeling to suggest that a grid that runs on 80 to 90 percent renewables is entirely feasible from a reliability standpoint. One way to ensure reliability under changing conditions is better grid planning and smarter expansion. An interconnected grid is a reliable grid in the face of increasing extreme weather. Yet major regional and interregional transmission lines are rarely built, despite intensifying worries about reliability.

These challenges are grounded in governance. It is easy to trace incumbency bias as a throughline in the challenges of interconnection, transmission planning, and reliability. When it comes to interconnection, the vast quantity of new renewable energy and storage resources waiting to connect to the grid promises to lower electricity prices and force inefficient older generation out of electricity markets. This dynamic threatens incumbent generation owners who logically seek to erect hurdles to new competitions’ entry. These biases carry through to transmission planning: For example, transmission-owning utilities prefer to build smaller lines in their own footprints, so that they can include these assets in the capital base upon which they earn a generous rate of return and avoid cost allocation battles in which they might be forced to pay for upgrades owned by another utility. And utilities often propose fossil fuel construction as the cure to reliability concerns because of their historic investments and expertise in these technologies. As the public agency charged with regulating utilities, FERC has the most potential to address these governance flaws impeding a cost-effective clean energy transition.

Incrementalism is not enough. In July 2023, FERC issued an order aimed at improving regional interconnection processes. The order requires transmission providers to study projects in “clusters” rather than one by one, to increase the speed with which they do so, and to allocate upgrade costs pro rata among clustered projects. Similarly, a new transmission planning order from 2024 improves regional planning processes but does not fundamentally alter their structure or participants’ incentives for weak implementation. Outside regional processes, the Biden Administration is pursuing innovative solutions for advancing a cleaner grid outside of FERC, including the establishment of a “Grid Deployment Office” within the Department of Energy (DOE). These initiatives are all commendable but inadequate to fully redress flaws in grid governance. A stronger set of reforms is needed to fix these flaws at their source.

The proposal

Toward a Federal Grid Planning Authority . Congress should pass legislation creating a “Federal Grid Planning Authority” (FGPA) and task it with creating a national grid development plan every three years. This plan should identify all high-voltage transmission lines that are determined to cost-effectively meet the nation’s identified long-term transmission needs. FGPA planners should be required to comprehensively evaluate the benefits of all potential grid expansions at both a national and regional level, with suites of projects selected on the basis that their benefits exceed their costs. They might do so with the considerable expertise developed across DOE and the national laboratories in executing such modeling. Congress should mandate that all regional planning entities under FERC’s jurisdiction accept the national plan as the baseline for regional transmission planning and that the FGPA process include all relevant stakeholders. Congress should also confer automatic federal siting authority for every transmission project approved in the FGPA plan.

Harnessing existing public utility law. Recognizing the substantial hurdles to the timely establishment of an FGPA, the proposal outlines several ways that FERC and the DOE might pursue a reform agenda under existing law.

Maximalist interventions: FERC could wield its existing remedial authority under the Federal Power Act more forcefully by finding that regional, incumbent-led processes fail to produce just and reasonable transmission plans. Simultaneously, the DOE might work to administratively establish a new or revamped public office of grid planning along the lines proposed above for what could be established through legislation. FERC could mandate that regional planners use DOE-produced plans as the baseline from which to launch their regional planning efforts, adding local lines only where necessary to address additional needs. Such changes should be accompanied by a shift toward more scrutinizing FERC review of transmission owners’ proposed local lines. Less ambitiously, FERC might pursue this set of reforms specifically for interregional planning.
Moderate steps: FERC could adopt prudence-based review of regional transmission plans (which would evaluate the outcomes of these planning processes), clarify the hierarchy of regional planning over local planning, and fold interconnection planning into grid planning.
More meaningful tweaks: FERC could resurrect the idea of independent transmission monitors (ITMs) that would create records to help FERC evaluate the prudence and reasonability of transmission rates, open a notice of inquiry and evaluate internal RTO governance, and mandate best practices in planning.

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Associate Dean Sowle’s Announcements, May 20 - May 24, 2024
May 19, 2024
Announcements

Summer 2024 Term Information. Initial reading assignments for Summer 2024 classes; a revised course schedule that includes classroom assignments; and information about pass/fail elections, are available on the Summer 2024 Quick Guide page . The Summer 2024 add/drop period will extend through Tuesday, May 28, at 9:00pm .

Spring 2024 Grades. Spring grades are due no later than Wednesday, June 5 . Grades are released as they are received. You can access your grades by logging into Web for Students , then clicking on the Spring 2024 link under the Grades and Rank heading. ( Reminder: You must use a VPN connection to access Web for Students from outside the building.) After all grades are in, we will process Spring GPAs and class ranks (for those who receive them) as quickly as possible. Please note: Students do not receive class ranks until they have been here for at least two semesters. For students entering in 2022 or after, class ranks are be assigned only to the top half of the class. (See the Student Handbook , section 6.13, for more information.)

Notices to Graduating Students. If you are a May 2024 graduate, please read the information below about your Kent email and network accounts, and your locker. If you have any questions, please let me know.

•Network and Print Accounts. Your network account will be deactivated on August 5 (the first Monday after the July bar exam). Your free printing quota will be reset to zero on Friday, May 10, 9:15pm .

•Email Accounts. Your Kent email address is for life but, 12 months after graduation, it will convert to an email address that you will need to set up to forward to a personal email account. Please click here for more information.

•ID Cards and Library Access. Kent student ID cards will remain active until Monday, August 5 (the first Monday after the July bar exam), and Kent graduates may use the Library for bar exam studying.

•Clearing Out Lockers. Please clear your lockers out no later than Monday, August 5 (the first Monday after the July bar exam). Anything left in lockers after that date will be removed. If you are unable to clear your locker out by that date, please contact me to make arrangements for your locker contents to be set aside for you. Please note: This applies only to graduating students. If you are not graduating, you do not need to clear your locker out; you will keep your current locker until you graduate.

Fall 2024 Semester. We now expect to issue the Fall 2024 schedule of classes by the end of the week of May 20. Information for first-year students on upper-level requirements and course planning is available below.

Information for 1L Students on Upper-Level Course Selection and Requirements. In preparation for Summer and Fall registration, we are providing a guide we publish annually that provides detailed information on graduation requirements, upper-level course selection, and related subjects. The guide, entitled "Where Do We Go From Here? Information for Students Entering Their Second Year," is available by clicking here .

Dean's Certification Form for Illinois Bar. We will mail a Dean's Certification form to the Illinois bar examiners for every graduating student after final grades for the Spring semester are received and processed and we can confirm completion of all graduation requirements. We compile the list of graduating students from the list of those who submitted Applications for Graduation listing Spring 2024 as their final semester. Important note: University policy does not allow the certification of any student to the bar examiners if the student has an outstanding balance owed to the school.

Bar Forms for Other States. If you plan to take a bar exam outside of Illinois, please provide me (at [email protected]) with the appropriate form(s) for the Law School to complete as soon as possible.

Counseling Services. This is a reminder that the university provides counseling services free of charge for students. Click here for details on the available resources, including individual counseling through Skylight Counseling Services. In addition to resources available through the university, the Lawyers Assistance Program also provides assistance to law students. LAP provides free and confidential assistance to members of the Illinois legal community, and can help you with issues of addiction, stress, anxiety, depression, focusing, worries about the character and fitness process, and having a successful first-year transition. Click here for more information about LAP and its services.

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Ahead of Rules Committee Consideration, Norton Condemns Bill to Repeal D.C. Voting Law

The bill will be before the rules committee today at 4:00 p.m. and the house is expected to vote on the bill thursday..

WASHINGTON, D.C. – Ahead of today’s Rules Committee consideration of a bill by Rep. August Pfluger (R-TX) to prohibit D.C. residents who are not citizens from voting in local D.C. elections, Congresswoman Eleanor Holmes Norton (D-DC) said that D.C. residents are capable of governing their own local affairs without interference from members of Congress who weren’t elected by D.C. D.C.’s Local Resident Voting Rights Amendment Act, which allows noncitizens to vote in local D.C. elections, was passed by the D.C. Council in 2022.

"D.C. laws are matters for the duly elected D.C. Council and mayor, not unaccountable members of Congress who do not represent D.C. residents. The almost 700,000 D.C. residents are worthy and capable of governing their own local affairs,” Norton said. “Despite these constant attacks on D.C. election laws, congressional Republicans have refused to do the one and only thing D.C. residents have asked them to do about elections in D.C.: to give D.C. residents voting representation in the House and Senate, as well as full control over their local affairs, by passing my D.C. statehood bill.”

Approximately 50 bills with anti-D.C. provisions have been introduced in the House and Senate this Congress.

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COMMENTS

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 ...
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Assignment; Governing Law. This Agreement and all the rights and powers granted hereby shall bind and inure to the benefit of the parties hereto and their respective permitted successors, heirs, personal representatives and permitted assigns.This Agreement and the rights, interests and obligations hereunder may not be assigned by any party hereto without the prior written consent of the other ...
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A standard assignment and assumption contract is often a good starting point if you need to enter into an assignment and assumption agreement. However, ... and governing law. Sometimes circumstances change, and as a business owner you may find yourself needing to assign your rights and duties under a contract to another party. A properly ...
Law Governing Assignments
Law Governing Assignments. An assignment is a transfer by the owner of a right (the assignor) to another person (the assignee). Generally, questions regarding the validity, enforceability, or effect of an assignment are governed by the law of the place where the assignment was made. Whether a right under a contract is capable of being ...
Governing Law Clause: Meaning & Samples (2022)
The purpose of governing law clauses gives a contract certainty regarding the laws applied when a legal issue occurs. If one party lives in another state or country, then the governing law clauses ensure that the parties agree upon which codes apply to the agreement. Governing Law Clause Examples. Examples of governing law clauses include ...
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.
PDF Governing Law and Jurisdiction Clauses Q&A: Us (New York)
a governing law provision where there is no reasonable relationship between the chosen jurisdiction's law and the parties or transaction, or the provision contravenes "some fundamental principle of justice, some prevalent conception of good morals, some deep-rooted tradition
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The Basics: What to consider when negotiating governing law and jurisdiction clauses. Parties negotiating any contract of substance, especially one with a cross border element, should consider the most appropriate form of dispute resolution for any disputes arising under it. Where litigation is the chosen forum, parties should agree both a ...
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governing by assignment to achieve critical missions. Legally, governing by assignment raises significant questions of administrative law. Assignees are sui generis, residing at conceptual boundaries—between employees, contractors, civil servants, and political appointees. We bring them into the light, analyzing governing by assignment against
assign
Assign is the act of transferring rights, property, or other benefits to another party (the assignee) from the party who holds such benefits under contract (the assignor). 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.
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The short answer: It depends on the jurisdiction in which the anti-assignment provision is being scrutinized (typically, the governing law of the contract in question). Assignments by Operation of Law
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Governing by assignment consists of three modalities: staffing, leadership, and projects. Each responds to different pressures on the administrative state, and each raises unique policy considerations. We show how structural shifts in government personnel have led agencies to rely on governing by assignment to achieve critical missions.
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This Amendment shall be governed by and construed in accordance with the laws of the State of New York. Sample 1 Sample 2 Sample 3 See All ( 6k) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws principles thereof.
Assessing Assignability: Transferring Contractual ...
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 ...
Lease Assignment Agreement: All You Need to Know
Indemnity: The legal protection provided by the assignor to the assignee against any potential losses, liabilities, or claims arising from the assignment. Governing Law: The jurisdiction or legal system that governs the interpretation, validity, and enforcement of the assignment agreement, which is typically specified in the agreement itself.
Assignment Clause: Meaning & Samples (2022)
Assignment Clause Examples. Examples of assignment clauses include: Example 1. A business closing or a change of control occurs. Example 2. New services providers taking over existing customer contracts. Example 3. Unique real estate obligations transferring to a new property owner as a condition of sale. Example 4.
Free Assignment of Agreement Template
Specifying the governing law. Designate the governing law of the assignment agreement to avoid uncertainty in case of disputes. Specify the jurisdiction whose laws will govern the interpretation and enforcement of the agreement. Seeking legal counsel
Deed of Assignment: Everything You Need to Know
In the realm of intellectual property, a Deed of Assignment is a formal legal document used to transfer all rights, title, and interest in intellectual property from the assignor (original owner) to the assignee (new owner). ... Governing Law: The deed should specify which jurisdiction's laws govern the interpretation and enforcement of the ...
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The Supreme Court's ruling on Thursday upholding the Consumer Financial Protection Bureau's funding mechanism, written by none other than Justice Clarence Thomas, is a good example. The doomerist position on the CFPB would be that any new-sounding agency will invariably be tossed out by small-c (and big-C) conservative justices, and the ...
Governing the grid for the future: The case for a Federal ...
A December 2023 report found that "over the past year, grid planners nearly doubled the 5-year load growth forecast," from 2.6 percent to 4.7 percent. The Biden Administration and numerous ...
Governor DeWine Signs Bill Requiring Ohio Schools to Create Cell Phone
The new law will require every school district in Ohio to establish an official policy governing cell phone usage during school hours and aims to minimize student use of cell phones in K-12 schools. "Our school children currently face countless distractions every day from the devices in their pockets," said Governor DeWine.
Governor DeWine signs bill requiring Ohio schools to create cellphone
Governor DeWine signs bill requiring Ohio schools to create cellphone policies. 5/20/2024. Last week, Ohio Governor Mike DeWine signed House Bill 250 at Karrer Middle School in Dublin. The new law will require every school district in Ohio to establish an official policy governing cellphone usage during school hours and seeks to minimize student use of cell phones in K-12 schools.
Elektrostal
Law #130/2004-OZ of October 25, 2004 On the Status and the Border of Elektrostal Urban Okrug, as amended by the Law #82/2010-OZ of July 1, 2010 On Amending the Law of Moscow Oblast "On the Status and the Border of Elektrostal Urban Okrug" and the Law of Moscow Oblast "On the Status and Borders of Noginsky Municipal District and the Newly ...
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President Joe Biden's administration on Thursday took another step toward reclassifying marijuana as a lower-risk substance, opening for public comment its proposed loosening of federal rules in ...
File:Location of Sergiyev Posad Region (Moscow Oblast).svg
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State laws governing abortion raise questions over legality of
Many states' laws governing embryonic stem cell research were enacted in the late 1990's and early 2000's, and, therefore, pre-date many significant advances and new therapies that rely on ...
Elektrostal
Elektrostal. Elektrostal ( Russian: Электроста́ль) is a city in Moscow Oblast, Russia. It is 58 kilometers (36 mi) east of Moscow. As of 2010, 155,196 people lived there.
Associate Dean Sowle's Announcements, May 20
Summer 2024 Term Information. Initial reading assignments for Summer 2024 classes; a revised course schedule that includes classroom assignments; and information about pass/fail elections, are available on the Summer 2024 Quick Guide page.The Summer 2024 add/drop period will extend through Tuesday, May 28, at 9:00pm.
Ahead of Rules Committee Consideration, Norton Condemns Bill to Repeal
WASHINGTON, D.C. - Ahead of today's Rules Committee consideration of a bill by Rep. August Pfluger (R-TX) to prohibit D.C. residents who are not citizens from voting in local D.C. elections, Congresswoman Eleanor Holmes Norton (D-DC) said that D.C. residents are capable of governing their own local affairs without interference from members of Congress who weren't elected by D.C. D.C.'s ...