assignment governing law

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Assignments: The Basic Law

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

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

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

Basic Definitions and Concepts:

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

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

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

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

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

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

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

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

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

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

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

Novation Compared to Assignment:

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

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

Equitable Assignments:

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

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

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

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

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

Enforceability of Assignments:

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

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

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

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

Assignment of Contractual Rights:

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

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

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

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

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

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

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

Noncompete Clauses and Assignments:

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

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

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

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

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

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

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

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

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

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

Conclusion:

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

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

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

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Understanding an assignment and assumption agreement

Need to assign your rights and duties under a contract? Learn more about the basics of an assignment and assumption agreement.

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by   Belle Wong, J.D.

Belle Wong, is a freelance writer specializing in small business, personal finance, banking, and tech/SAAS. She ...

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Updated on: November 24, 2023 · 3min read

The assignment and assumption agreement

The basics of assignment and assumption, filling in the assignment and assumption agreement.

While every business should try its best to meet its contractual obligations, changes in circumstance can happen that could necessitate transferring your rights and duties under a contract to another party who would be better able to meet those obligations.

If you find yourself in such a situation, and your contract provides for the possibility of assignment, an assignment and assumption agreement can be a good option for preserving your relationship with the party you initially contracted with, while at the same time enabling you to pass on your contractual rights and duties to a third party.

An assignment and assumption agreement is used after a contract is signed, in order to transfer one of the contracting party's rights and obligations to a third party who was not originally a party to the contract. The party making the assignment is called the assignor, while the third party accepting the assignment is known as the assignee.

In order for an assignment and assumption agreement to be valid, the following criteria need to be met:

• The initial contract must provide for the possibility of assignment by one of the initial contracting parties.
• The assignor must agree to assign their rights and duties under the contract to the assignee.
• The assignee must agree to accept, or "assume," those contractual rights and duties.
• The other party to the initial contract must consent to the transfer of rights and obligations to the assignee.

A standard assignment and assumption contract is often a good starting point if you need to enter into an assignment and assumption agreement. However, for more complex situations, such as an assignment and amendment agreement in which several of the initial contract terms will be modified, or where only some, but not all, rights and duties will be assigned, it's a good idea to retain the services of an attorney who can help you draft an agreement that will meet all your needs.

When you're ready to enter into an assignment and assumption agreement, it's a good idea to have a firm grasp of the basics of assignment:

• First, carefully read and understand the assignment and assumption provision in the initial contract. Contracts vary widely in their language on this topic, and each contract will have specific criteria that must be met in order for a valid assignment of rights to take place.
• All parties to the agreement should carefully review the document to make sure they each know what they're agreeing to, and to help ensure that all important terms and conditions have been addressed in the agreement.
• Until the agreement is signed by all the parties involved, the assignor will still be obligated for all responsibilities stated in the initial contract. If you are the assignor, you need to ensure that you continue with business as usual until the assignment and assumption agreement has been properly executed.

Unless you're dealing with a complex assignment situation, working with a template often is a good way to begin drafting an assignment and assumption agreement that will meet your needs. Generally speaking, your agreement should include the following information:

• Identification of the existing agreement, including details such as the date it was signed and the parties involved, and the parties' rights to assign under this initial agreement
• The effective date of the assignment and assumption agreement
• Identification of the party making the assignment (the assignor), and a statement of their desire to assign their rights under the initial contract
• Identification of the third party accepting the assignment (the assignee), and a statement of their acceptance of the assignment
• Identification of the other initial party to the contract, and a statement of their consent to the assignment and assumption agreement
• A section stating that the initial contract is continued; meaning, that, other than the change to the parties involved, all terms and conditions in the original contract stay the same

In addition to these sections that are specific to an assignment and assumption agreement, your contract should also include standard contract language, such as clauses about indemnification, future amendments, 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 drafted assignment and assumption agreement can help you make the transfer smoothly while, at the same time, preserving the cordiality of your initial business relationship under the original contract.

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governing law

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Governing law is a contractual provision (also known as a choice of law provision) that determines which law shall apply in the event of a dispute. Such a clause is generally honored by the courts which do not interfere with the agreement of the parties regarding the applicable law. The governing law provision is commonly used by parties residing in different jurisdictions to ensure that one party does not have an advantage over each other party.

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

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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 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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• Assignment Clause

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Contract Clauses

• Acceleration Clause
• Arbitration Clause
• Cancellation Clause
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• Confidentiality Clause
• Consideration Clause
• Definitions Clause
• Dispute Resolution Clause
• Entire Agreement Clause
• Escalation Clause
• Exclusivity Clause
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• 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
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• Survival Clause
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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.

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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.
• General Contract and Boilerplate
• General Commercial
• United States

Joint ventures: choice of law and choosing the right dispute resolution forum

United Kingdom |  Publication

Introduction

Governing law clauses and jurisdiction clauses, choice of law and jurisdiction - general considerations, what factors should you consider when choosing the governing law, what factors should be considered when choosing a jurisdiction clause.

Subject to any particular restrictions under applicable local law, the parties to a joint venture or shareholders’ agreement are generally free to choose any governing law and jurisdiction clauses. There are no UK statutory restrictions in this respect for joint ventures. 1

Choice of law and jurisdiction are invariably negotiated clauses, but parties to a proposed joint venture may be reluctant to invest significant time and resources in the issues which arise where the parties are in dispute and the collaborative objective has failed. However, appropriate choice of law and jurisdiction clauses are critical issues to manage risk if and when a dispute does arise. Unfavourable choice of law and/or jurisdiction clauses can adversely impact a party’s ability to seek legal recourse (or to defend a claim) against the other and also affect related issues such as the costs of a dispute.

There are various factors that the participants in a joint venture need to take into account when choosing the law which governs the joint venture or shareholders agreement and the dispute resolution mechanism and jurisdiction. We consider these below.

A governing law clause determines the substantive law that will apply to the interpretation of an agreement (i.e. legal rights and obligations of the parties). It does not govern how disputes are to be resolved.

A jurisdiction clause determines how disputes will be resolved (e.g. courts, arbitration, expert determination) and may also govern the procedure to be followed to commence and conduct a dispute.

It is imperative for parties to (i) include both governing law and jurisdiction clauses (including, in the case of arbitration, drafting which constitutes an express arbitration agreement) and (ii) employ clear and unambiguous drafting. Failure to do so can lead to lengthy and costly disputes over which courts/tribunals should determine a dispute and which substantive law will be applied. If the relationship between the parties breaks down, ambiguities are also likely to be exploited for tactical purposes, e.g. to frustrate or delay a genuine claim.

Choice of law impacts the rights and obligations under the contract, both with respect to the interpretation of the contract’s express terms and any terms which may be implied by the substantive law chosen by the parties.

The parties’ choice of jurisdiction has a significant impact on the cost, conduct, location and ultimate outcome of any dispute. This applies even if the parties chose arbitration, because the ‘seat’ (national jurisdiction) of the arbitration impacts factors such as the conduct of an arbitration and the extent to which the tribunal’s award can be challenged.

• Suitability to the joint venture. Not all legal systems are equal in terms of their ability to handle complex commercial disputes. Some jurisdictions have causes of actions and remedies which may be only available to a limited extent or not at all in other jurisdictions. For example English law has sophisticated methods of recourse for minority shareholders (such as unfair prejudice and derivative actions), which do not exist in other jurisdictions. In the context of joint ventures, the choice of the law of jurisdiction with a comprehensive body of settled and tested law will often be the definitive factor for the parties.
• Experience. A party would be well advised to choose a governing law they are familiar with and understand. Although ‘compromising’ on governing law may not have an immediate impact when the parties’ interests are aligned, this may unravel in the event of a dispute. Some transactions may involve structures which are better suited for a certain choice of law.
• Consistency between the governing law clause and jurisdiction clause. For example, if disputes are to be resolved in the English courts, generally speaking it would be sensible to choose English law unless there is a good reason not to do so. Inconsistent governing law and jurisdiction clauses may increase the time and costs of a dispute (e.g. due to the need to present expert evidence of foreign law) and also uncertainty arising from a court applying foreign law. In some jurisdictions (particularly those outside the EEA and not party to the Hague Convention), there is also a risk that a court will not follow a choice of law clause.
• Pre-contractual dealings. The parties’ choice of law for the contract may also determine the law which applies to any issues arising out of the parties’ pre-contractual dealings. For example, under English law, it is possible to significantly curtail liability raising from pre-contractual dealings (including the ability to rescind the contract), which is clearly advantageous in terms of certainty of the contract.

Some of the issues that should be considered are:

• Impartiality. In short, an impartial adjudication of a dispute is not guaranteed in every jurisdiction in the world, which may be particularly relevant when litigating against state parties. Familiarity and expertise with complex commercial matters is also important (e.g. arbitration under one of the major arbitral rules, or litigation in a jurisdiction such as England or New York).
• Practicality and convenience. Parties should consider factors such as the availability and costs of legal representation with appropriate expertise, the likely location of the parties and witnesses and the speed and cost of the litigation process .
• Procedural issues such as disclosure and recovery of costs. Common law jurisdictions tend to have much broader disclosure obligations than civil law jurisdictions. Litigation costs are recoverable on a ‘loser pays’ basis in some jurisdictions (e.g. England & Wales) but not in others.
• Availability of discretionary remedies (including protective reliefs). Joint ventures often involve significant resource/capex investments by the parties. As a result, damages may not be an adequate remedy to protect a party’s position. The availability of a full range of remedies including protective reliefs therefore may be an important consideration. Such remedies may include discretionary remedies such as specific performance (requiring the parties to comply with contractual obligations in the joint venture or shareholders’ agreement) or protective remedies such as interim injunctive relief (for example to prevent conduct or behaviour which is in breach of non-compete undertakings).
• Local law issues impacting choice of jurisdiction. The law of the jurisdiction in which the joint venture is incorporated may impact how disputes may be brought, particularly against government entities, e.g. any legislative provisions which restrict choices of jurisdiction and the extent the jurisdiction has ratified bilateral or multilateral investment treaties.
• Enforcement. Success in litigation is fruitless against an opponent with no assets to enforce against, or located in a jurisdiction which will not recognise a foreign judgment or arbitral award. Potential claimants should consider the location of assets and of conduct relevant to the business of the joint venture (e.g. board meetings), as well as local law enforcement issues. Where state related entities are involved, sovereign immunity issues must also be considered.
• Special remedies.  Any potentially onerous or unusual remedies available in certain jurisdictions should be considered (either to avoid or potentially pursue), including special or punitive damages.

Practice area:

• Litigation and disputes

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Deed of Assignment (for Intellectual Property)

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). This is crucial for the correct transfer of patents, copyrights, trademarks, and other IP rights. The deed typically requires specific legal formalities, sometimes notarization, to ensure it is legally enforceable.

To be legally effective a deed of assignment must contain:

• Title of the Document : It should clearly be labeled as a "Deed of Assignment" to identify the nature of the document.
• Date : The date on which the deed is executed should be clearly mentioned.
• Parties Involved : Full names and addresses of both the assignor (the party transferring the rights) and the assignee (the party receiving the rights). This identifies the parties to the agreement.
• Recitals : This section provides the background of the transaction. It typically includes details about the ownership of the assignor and the intention behind the assignment.
• Definition and Interpretation : Any terms used within the deed that have specific meanings should be clearly defined in this section.
• Description of the Property or Rights : A detailed description of the property or rights being assigned. For intellectual property, this would include details like patent numbers, trademark registrations , or descriptions of the copyrighted material.
• Terms of Assignment : This should include the extent of the rights being transferred, any conditions or limitations on the assignment, and any obligations the assignor or assignee must fulfill as part of the agreement.
• Warranties and Representations : The assignor typically makes certain warranties regarding their ownership of the property and the absence of encumbrances or third-party claims against it.
• Governing Law : The deed should specify which jurisdiction's laws govern the interpretation and enforcement of the agreement.
• Execution and Witnesses : The deed must be signed by both parties, and depending on jurisdictional requirements, it may also need to be witnessed and possibly notarized.
• Schedules or Annexures : If there are detailed lists or descriptions (like a list of patent numbers or property descriptions), these are often attached as schedules to the main body of the deed.

Letter of Assignment (for Trademarks and Patents)

This is a less formal document compared to the Deed of Assignment and is often used to record the assignment of rights or licensing of intellectual property on a temporary or limited basis. While it can outline the terms of the assignment, it may not be sufficient for the full transfer of legal title of IP rights. It's more commonly used in situations like assigning the rights to use a copyrighted work or a trademark license.

For example, company X allows company Y to use their trademark for specific products in a specific country for a specific period.  

At the same time, company X can use a Letter of Assignment to transfer a trademark to someone. In this case, it will be similar to the Deed of Assignment. 

Intellectual Property Sales Agreement

An IP Sales Agreement is a detailed contract that stipulates the terms and conditions of the sale of intellectual property. It covers aspects such as the specific rights being sold, payment terms, warranties regarding the ownership and validity of the IP, and any limitations or conditions on the use of the IP. This document is essential in transactions involving the sale of IP assets.

However, clients usually prefer to keep this document confidential and prepare special deeds of assignment or letter of assignment for different countries.

IP Transfer Declaration

In the context of intellectual property, a Declaration is often used to assert ownership or the originality of an IP asset. For example, inventors may use declarations in patent applications to declare their invention is original, or authors may use it to assert copyright ownership. It's a formal statement, sometimes required by IP offices or courts.

When assigning a trademark, the Declaration can be a valid document to function as a proof of the transfer. For example, a director of company X declares that the company had sold its Intellectual Property to company Y. 

Merger Document

When companies or entities with significant IP assets merge, an IP Merger Document is used. This document outlines how the intellectual property owned by the merging entities will be combined or managed. It includes details about the transfer, integration, or handling of patents, copyrights, trademarks, and any other intellectual property affected by the merger.

In all these cases, the precise drafting of documents is critical to ensure that IP rights are adequately protected and transferred. Legal advice is often necessary to navigate the complexities of intellectual property laws.

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Catch up locals' news in English

Employee checks have been completed at the Wildberries warehouse in Elektrostal

2024-03-27T13:01:19.471Z

Highlights: Employee checks have been completed at the Wildberries warehouse in Elektrostal. 38 warehouse workers will undergo additional verification to clarify the data with law enforcement agencies. The warehouse continued to operate as normal. Last year, law enforcement officers in the Moscow region detained 16 migrants due to their violation of migration laws. The checks were carried out by the police and the Russian National Guard at one of Wildberries sorting centers in Elektrstal. The verification of documents at the warehouse has been completed, the company says.

Employee checks have been completed at the Wildberries warehouse in Elektrostal, the company reported.

“The verification of documents as part of the work of law enforcement agencies at the warehouse in Elektrostal has been completed,” the statement says.

It is clarified that 38 warehouse workers will undergo additional verification to clarify the data with law enforcement agencies. The rest returned to their duties. The warehouse continued to operate as normal.

Earlier it became known that the police and the Russian National Guard began checking the passport regime and work permits at one of the Wildberries sorting centers in Elektrostal.

Last year, law enforcement officers in the Moscow region detained 16 migrants in Elektrostal, Moscow Region, due to their violation of migration laws.

Source: russiart

All news articles on 2024-03-27

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NEWS ANALYSIS

As Speaker, Johnson Advances What He Once Opposed, Enraging the Right

Now that he is the leader, the Louisiana Republican has found himself bowing to governing realities that are now his problem.

By Catie Edmondson

Reporting from Capitol Hill

As a low-profile, rank-and-file congressman representing his deeply red district, Representative Mike Johnson took the positions of a hard-liner.

He repeatedly voted down efforts to send aid to Ukraine, citing insufficient oversight of where the money would go. He opposed the stopgap funding bill that then-Speaker Kevin McCarthy put on the House floor in efforts to avert a government shutdown. He supported a sweeping overhaul favored by libertarians to the law that undergirds a warrantless surveillance program that is reviled by right-wing lawmakers who distrust federal law enforcement.

But now that he is Speaker Johnson, he has changed his tune considerably, much to the chagrin and outrage of the right-wing lawmakers with whom he once found common cause.

After months of refusing to bring up a bill to send a fresh infusion of aid to Ukraine, Mr. Johnson is now searching for a way to advance it, having privately pledged that the Congress would “do our job.” Despite a vow in the fall never to pass another stopgap funding bill to keep the government open, he put forward several to allow more time to negotiate funding agreements with Democrats that were opposed by many of his members. And on Wednesday, the speaker tried and failed to put to a vote a bill making more modest changes to the surveillance program, over the objections of hard-right lawmakers and activists who have sought to place strict limits on it.

“House Judiciary Committee Member Mike Johnson has a bone to pick with Speaker of the House Mike Johnson,” Adam Brandon, the president of FreedomWorks, a center-right advocacy group, said in a statement decrying his reversal on the intelligence bill.

As a steward of the federal government — his post is second in line to the presidency — and wrangler of his party’s slim majority, Mr. Johnson has lately found himself embracing bills he once opposed in order to meet the basic demands of governing and often pushing them through with Democratic votes.

The dynamic was on vivid display as lawmakers returned to the Capitol on Tuesday from their Easter recess, and Mr. Johnson — saddled with an ever-shrinking majority and a deeply divided conference — faced a tricky legislative agenda.

With his hard-line colleagues frequently voting to block legislation from coming to the floor, upending a long-held axiom of the majority , Mr. Johnson has often been forced to circumvent their opposition by skirting normal House rules and using a procedure that forbids changes to legislation, limits debate and requires a two-thirds majority for bills to pass. That approach all but guarantees that whatever he brings up must have bipartisan support.

“We’ve got to realize I can’t throw a Hail Mary pass on every single play. It’s three yards and a cloud of dust,” he said in an interview on Fox News last month, using a term that describes a slow grind offensive strategy. “What we have to do in an era of divided government historically, as we are, you’ve got to build consensus. If we want to move a partisan measure, I’ve got to have every single member — literally. And some things need to be bipartisan.”

Mr. Johnson has pointed to a number of modest victories — singles and doubles, as he’s described them to his Republican colleagues — arguing that he has used the slim leverage he has to exact some conservative wins.

In the second tranche of spending bills lawmakers passed last month to keep the government funded through the fall, Republican negotiators won funding for an increase in new detention beds run by Immigration and Customs Enforcement, 2,000 new Border Patrol agents and a provision cutting off aid to the main U.N. agency that provides assistance to Palestinians. It cut funding for the State Department and foreign aid programs, a perennial target of conservative ire, by roughly 6 percent.

His discussions around Ukraine funding have included the idea of tying the aid for Kyiv to a measure that would force President Biden to reverse a moratorium on new permits for liquefied natural gas export facilities, in what Republicans would see as a political victory against the Democratic president’s climate agenda, as well as a way to choke off Russian income from selling gas.

And in a letter to his conference late last week, Mr. Johnson pointed to the inclusion of “56 specific reforms” in the surveillance law he attempted to put to a vote on Wednesday, arguing Republicans had “an opportunity before us to pass the most significant set of intelligence reforms since” the law was originally enacted in 1978.

The legislation, which would renew a tool known as 702, would add oversight requirements to a program that allows intelligence officials to surveil foreigners abroad without a warrant. But it does not include a requirement Mr. Johnson has backed that would require officials to obtain a warrant before searching a repository of data using an American’s name or another identifier.

“If our bill fails, we will be faced with an impossible choice and can expect the Senate to jam us with a clean extension that includes no reforms at all,” Mr. Johnson wrote. “That is clearly an unacceptable option.”

Such reality checks have done little to appease his restive right flank, whose members have become increasingly agitated over the series of governing decisions Mr. Johnson has made. They brought down the intelligence bill on a procedural vote on Wednesday afternoon.

The foreign aid vote may be especially politically dangerous for him, because blocking aid to Ukraine is a top priority of Representative Marjorie Taylor Greene of Georgia, who has floated a threat to oust Mr. Johnson.

In a scathing letter sent to her colleagues that made the case for his removal, Ms. Greene noted that as a congressman, Mr. Johnson repeatedly opposed aid to Ukraine.

Mr. Johnson’s sole vote in favor of sending money to Kyiv came weeks after the start of the invasion, and tied together a $13.6 billion aid package to homeland security and defense funding. On the votes that followed, he opposed sending more aid.

“We should not be sending another $40 billion abroad when our own border is in chaos, American mothers are struggling to find baby formula, gas prices are at record highs, and American families are struggling to make ends meet, without sufficient oversight over where the money will go,” he said in May 2022, explaining his “no” vote.

Years later as speaker, Mr. Johnson has continued to call for better oversight of American funding to Ukraine. But he has also advanced another argument.

“We understand the role that America plays in the world,” he said at a news conference last month. “We understand the importance of sending a strong signal to the world, that we stand by our allies and we cannot allow terrorists and tyrants to march through the globe.”

Luke Broadwater contributed reporting.

Catie Edmondson covers Congress for The Times. More about Catie Edmondson

A Divided Congress: Latest News and Analysis

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