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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.

Get your assignment of agreement

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 · 3 min 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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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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Assignment of Contract

Jump to section, what is an assignment of contract.

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

How Does Assignment of Contract Work?

An assignment of contract is simpler than you might think.

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

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

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

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

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

Contract Assignment Examples

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

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

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

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

Jeremiah C.

Assignment of Contract in Real Estate

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

This process is called real estate wholesaling.

Real Estate Wholesaling

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

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

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

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

But how do real estate wholesalers find these properties?

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

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

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

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

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

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

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

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

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

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

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

Who Handles Assignment of Contract?

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

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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Assessing Assignability: Transferring Contractual Rights or Obligations | Practical Law

Assessing Assignability: Transferring Contractual Rights or Obligations

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

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

Distinguishing Between Assignment and Delegation

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

Characteristics of Assignments

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

Characteristics of Delegation

The general rule governing assignment and delegation.

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

Contracts That Present the Greatest Challenges

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

Personal Services Contracts

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

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

When Does an Involuntary Transfer Trigger a Restricted Transfer?

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

Drafting and Negotiating Anti-assignment and Anti-delegation Clauses

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

Assignment of rights

How it relates to the law in british columbia canada.

In British Columbia, Canada, an assignment of rights is a legal document that transfers the rights and obligations of one party to another. This can include the transfer of ownership of property, the transfer of a contract, or the transfer of intellectual property rights. The assignment of rights must be in writing and signed by both parties to be legally binding. It is important to note that certain rights, such as those related to employment or tenancy, may not be assignable without the consent of all parties involved. Additionally, the assignment of certain rights may be subject to specific legal requirements or restrictions. Therefore, it is important to consult with a legal professional before entering into an assignment of rights agreement in British Columbia.

Impact on Business Owners in British Columbia

The concept of assignment of rights can impact small businesses in British Columbia, Canada, as it allows for the transfer of legal rights or interests from one party to another. This can include the transfer of ownership of property, the transfer of a contract, or the transfer of intellectual property rights. However, it is important to note that certain rights, such as those related to employment or tenancy, may not be assignable without the consent of all parties involved. Additionally, the assignment of certain rights may be subject to specific legal requirements or restrictions. Therefore, small businesses should consult with a legal professional before entering into an assignment of rights agreement in British Columbia to ensure that the transfer is legally binding and does not result in any legal disputes.

Potential Legal Risks, Legal Challenges, or Legal Pitfalls for Businesses in British Columbia

As a small business owner in British Columbia, it is important to be aware of the potential legal risks and challenges related to the assignment of rights. This refers to the transfer of ownership of a particular right or property from one party to another. One potential legal risk is the possibility of a dispute arising over the ownership of the assigned rights. This can occur if the original owner of the rights did not have the legal authority to assign them, or if there is a disagreement over the terms of the assignment. Another challenge is ensuring that all necessary legal documentation is in place to properly assign the rights. This includes drafting a clear and comprehensive assignment agreement that outlines the specific rights being transferred, the terms of the assignment, and any limitations or restrictions on the use of the assigned rights. To avoid or mitigate these issues, small business owners should seek the advice of a qualified legal professional when considering an assignment of rights. This can help ensure that all necessary legal requirements are met and that the assignment is properly documented. Additionally, it is important to conduct due diligence to ensure that the party receiving the assigned rights has the legal authority and capacity to use them as intended. This can help prevent disputes and legal challenges down the line. In summary, while the assignment of rights can be a valuable tool for small businesses in British Columbia, it is important to be aware of the potential legal risks and challenges involved. By seeking legal advice and conducting due diligence, small business owners can mitigate these risks and ensure a successful assignment of rights.

BC Business Practices and Consumer Protection Act (BPCPA)

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Assignment of Rights Contract Clauses (121)

Grouped into 3 collections of similar clauses from business contracts.

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• Legal Dictionary

Assignment is a legal definition that refers to the transfer of rights, property, or other benefits between two parties. The party allocating the rights is known as the “assignor”, while the one receiving them is called the “assignee”. The other original party to the contract is known as the “ obligor ”.

A burden, duty, or detriment cannot be transferred as an assignment without the agreement of the assignee . Furthermore, the assignment can be carried out as a gift, or it may be paid for with a contractual consideration .

Keep reading to learn how this important legal term is used both in contract and property law and to see relevant examples.

• Assignment Examples

A common example of assignment within property law can be seen in rental agreements between landlords and tenants. For example, a tenant may be renting from a landlord but wants another party to take over the property . In this scenario, the tenant may be able to choose between assigning the lease to a new tenant or subleasing it.

If assigning it, the new tenant will be given the entire balance of the term, with no reversion to anyone else being possible. In other words, the new tenant would have a legal relationship with the landlord. On the other hand, if subleasing the property, the new tenant would be given a limited term and no legal responsibility towards the property owner, only towards the original tenant.

Another example of assignment can be seen within contract law . Let’s say that a school hires a piano teacher for a monthly employment contract with a salary of $2000 per month. As long as there is consent from all parties, the teacher could assign their contract to another qualified piano instructor.

This would be an assignment both of the piano teacher’s rights to receive $2000 per month, and a delegation of their duty to teach piano lessons. This illustrates the fact that under contract law, assignment always includes a transfer of both rights and duties between the parties. If a breach of contract is made by either party, for example for defective performance, then the new teacher or the school can sue each other accordingly.

• Legal Requirements for Assignment

For an assignment to be legally valid, it must meet certain requirements . If these are not met, a trial court can determine that the transfer of rights did not occur. The legal requirements for assignment are as follows:

• All parties must consent and be legally capable to carry out the assignment.
• The objects, rights, or benefits being transferred must be legal.
• The assignment is not against public policy or illegal.
• Some type of consideration is included if necessary.
• The contract in question must already be in place and doesn’t prohibit assignment.
• If a duty is being transferred, and it requires a rare genius or skill, then it cannot be delegated.
• The assignment doesn’t significantly change the expected outcome of a contract.
• Assignment Steps

To successfully assign a contract, certain steps must be followed to ensure the process is legally valid. The necessary assignment steps are listed below:

• Ensuring there is no anti-assignment clause in the contract.
• Executing the assignment by transferring the obligations and rights to a third party.
• Notifying the obligor of the transfer, which in turn relieves the assignor of any liability.
• Avoiding Assignment

In certain situations, one of the two parties may not want to allow their counterpart to assign the contract. This can be prevented by setting anti-assignment clauses in the original contract. An example of this is making it necessary for prior written consent to be attained from the other parties before the assignment is approved. Nevertheless, an anti-assignment clause cannot be included in an assignment that was issued or ordered by a court.

• Assignment vs. Novation

Novation occurs when a party would like to transfer both the benefits and burden of a contract to another party. This is similar to assignment in the sense that the benefits are transferred, but in this case, the burden is also passed on. When novation is finalized, the original contract is deleted and a new one is created, in which a third party becomes responsible for all the obligations and rights of the original contract.

• Assignment vs. Delegation

Although delegation and assignment are similar in purpose, they are two different concepts. Delegation refers to transferring the obligation to a third party without an assignment contract . While in assignment an entire contract and its rights and benefits can be passed on, in delegation only a particular contractual task or activity is transferred.

Let’s look at an example . Lisa is a homeowner that wants to hire Michael with an independent contractor agreement to remodel her garage. He plans to do all the work himself, but he’s not a painter, so he wants to delegate the painting work to his friend Valentina.

In this example, the contract is between Lisa, the obligor, and Michael, the delegator. Valentina would then be known as a delegatee, she doesn’t assume responsibility for the contract nor does she receive the contractual benefits, which in this case would be monetary compensation. However, Michael may have a separate agreement with Valentina to pay her in return for her work.

It’s also important to note that some duties are so specific in nature that it’s not possible to delegate them. In addition, if a party wants to avoid delegation , it’s recommended to add a clause to prevent the other party from delegating their duties.

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Assignment of bid and assignment of right to bid.

Assignment of Right to Bid

This assignment is exactly as the name would imply, the assignment of the judgment holder’s right to bid the judgment amount at the auction. So, let’s say Wells Fargo has a foreclosure judgment against John Doe. Wells Fargo’s judgment says John Doe owes Wells Fargo $200,000.00 and the property will be sold off to satisfy the judgment amount. If Wells Fargo does not want to wait to have the property sold at the auction, a third party who was not part of the lawsuit can come to Wells Fargo and buy Wells Fargo’s judgment. At this point, Wells Fargo has sold its right to bid at the foreclosure auction but nobody else knows this. Enter the Assignment of Right to Bid. Wells Fargo executes one of these assignments and states that it is assigning its right to bid at the foreclosure auction to a third party. Like magic, Wells Fargo is paid and some third party who had nothing to do with the foreclosed loan, the lender, the borrower, or the foreclosure action, now has the absolute right to bid at the foreclosure auction just like Wells Fargo did.

The primary benefit for a lender like Wells Fargo in a situation like this is they will be paid, and paid quickly. After who knows how long of maintaining a non-performing asset on their balance sheets, they finally have some finality. Further, lenders are not in the business of owning real estate , otherwise they would be landlords instead. Thus, by utilizing the Assignment of Right to Bid, Wells Fargo did not have to appear at the foreclosure auction, never ran a risk of being an owner of the property, and, most importantly, cleared a non-performing asset off of its balance sheets.

Assignment of Bid

Now, take the same situation as above. Wells Fargo has a foreclosure judgment against John Doe for $200,000.00. Except this time, Wells Fargo goes to the foreclosure auction and wins the property at auction. On the day of the auction, the Clerk of the Circuit Court files a certificate of sale which states how much the property was sold for, who won the property at auction, and the date the property was auctioned off. Between the certificate of sale and the issuance of title to the winning bidder, there is a 10-day statutory period for objections. In this time period, Wells Fargo can assign its bid to some third party. When Wells Fargo assigns its bid to a third party, the third party will ultimately receive title to the purchased property at the end of the 10-day waiting period. Essentially, Wells Fargo has just resold the property without having to pay real estate agents, documentary stamp taxes, or recording fees that traditionally accompany the sale of real property. Upon recording the assignment of bid, and the end of the 10-day waiting period, the title is issued by the Clerk of the Circuit Court to whomever Wells Fargo has assigned their bid to. This means that the new party will be responsible for paying any taxes due to the Court and State of Florida. Further, this new third party is responsible for paying the Court any unpaid amounts still due and owing post foreclosure.

The primary benefit to using the Assignment of Bid, as opposed to the Assignment of Right to Bid, is that now Wells Fargo has resold the property for, hopefully, an amount that is close to the fair market value, as opposed to the foreclosed value. While Wells Fargo’s judgment may have been for $200,000, the property may have been worth $350,000. Most third parties are not going to pay over and above a judgment amount prior to a foreclosure sale, in hopes of becoming an owner. However, after the sale has occurred, it is more common to receive amounts above and beyond the judgment amount. And, just like with the Assignment of Right to Bid, Wells Fargo is not becoming a landlord/property owner.

Whether you are purchasing the Assignment, or selling the Assignment, knowing how to navigate the convoluted process is key. Failure to follow the appropriate timelines may result in a lender unintentionally becoming an owner of real estate as opposed to a lender. Moreover, if you are purchasing as an investment, it can become a complicated process to remove the homeowner or tenant that just had their home foreclosed. With 45 years of real estate experience, the attorneys at Chiumento Law, PLLC know how to help you navigate this process.

About the Author

Vincent L. Sullivan graduated in the top quartile of his class from the Florida Coastal School of Law in 2015. He specializes in Consumer Defense, Appeals, Debt Collection defense, Foreclosure defense, and Real Estate law. Mr. Sullivan has represented both landlords and tenants in court, which has given him an understanding of each party’s needs. He is passionate about consumer defense and has helped clients fight debt collectors and stop harassing phone calls. Mr. Sullivan also works in both state and federal appellate courts and has been able to successfully represent many homeowners and consumers who have appealed their cases. Mr. Sullivan lives in Palm Coast.

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Rangers Designate Andrew Knizner For Assignment

By Darragh McDonald | August 6, 2024 at 4:30pm CDT

The Rangers announced that right-hander Tyler Mahle has been reinstated from the 60-day injured list. In corresponding moves, the club optioned left-hander Walter Pennington and designated catcher Andrew Knizner for assignment.

Knizner, 29, signed with the Rangers in the offseason after being non-tendered by the Cardinals. Texas gave him a one-year deal with a $1.825MM salary, knowing that he could be retained via arbitration beyond this season as well.

Unfortunately, the club has been struggling to get much production from the catcher position this year. Jonah Heim hit .258/.317/.438 last year for a 103 wRC+ but he has dropped to a line of .232/.277/.346 and a 73 wRC+ this year. The falloff from Knizner has been even more drastic as he slashed .241/.288/.424 with the Cards last year for a 92 wRC+ but he is hitting .167/.183/.211 this year for a wRC+ of 4.

Perhaps some of that can be attributed to a .206 batting average on balls in play but Knizner has also drawn walks at a paltry 1.1% clip and hit just one home run in his 93 plate appearances, compared to the ten he hit in 241 trips to the plate last year. The Rangers fortified their catching corps by acquiring Carson Kelly from the Tigers prior to the deadline and then optioned Knizner to Triple-A, though he has now been bumped off the 40-man roster altogether.

With the trade deadline now passed, the Rangers will have to put Knizner on waivers in the coming days. Despite his rough season, he could perhaps garner interest based on his past performance and contract status.

He has one option left and therefore a claiming club wouldn’t need to give him an active roster spot right away, though he would be out of options next year in that scenario. He has not yet spent 20 days on optional assignment this year, so it’s possible he could retain that option next year if he either doesn’t get claimed or is kept in the majors by some other club. He also came into this season with four years and 21 days of service time, putting him just shy of the five-year mark at present. If any club felt especially bullish about Knizner’s future, they could claim him, keep him on optional assignment for the rest of the year and then control him via arbitration for two more years.

As for Mahle, he will be taking the mound for the first time in over a year. He required Tommy John surgery in May of last year, just a few months from free agency. The Rangers signed him to a two-year, $22MM deal with the knowledge that they would have to wait for his arrival.

With Mahle and Jacob deGrom both on their way back from surgeries last year, the club felt good enough about their rotation depth to deal Michael Lorenzen to the Royals prior to the deadline. But both Jon Gray and Max Scherzer recently landed on the IL, thinning the group out further. As of right now, the group consists of Mahle, Nathan Eovaldi , Andrew Heaney , José Ureña and Cody Bradford , with Dane Dunning in a long-relief role in the bullpen.

4 hours ago

I thought he would a great depth signing before the season, but he’s been really bad. To be fair most of the offense has been off this year, but he has looked lost, not just off, for long stretches.

3 hours ago

Ironically Knizner was part of the reason the Cardinals were willing to give up Carson Kelly in the Goldschmidt trade.

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Colorado Rockies Call Up Chasen Shreve, Designate John Curtiss For Assignment

Sam connon | 9 hours ago.

• Colorado Rockies

The Colorado Rockies have selected the contract of left-handed pitcher Chasen Shreve from Triple-A Albuquerque, the club announced Tuesday afternoon.

Shreve inked a minor league contract with the Rockies on Sunday, three days after he was released from his minor league deal with the New York Yankees. The 34-year-old lefty started the season in the Texas Rangers' farm system, up until he was released back in June.

To free up a spot for Shreve on the major league roster, Colorado designated right-handed pitcher John Curtiss for assignment. The Rockies had room to keep Curtiss on their 40-man roster, but the 31-year-old journeyman was all out of minor league options.

The Colorado Rockies announced the following moves today: - Selected the contract of LHP Chasen Shreve (#46) from Triple-A Albuquerque. - Designated RHP John Curtiss for assignment. The Rockies currently have 39 players on their 40-man roster. — Rockies Club Information (@RockiesClubInfo) August 6, 2024

Shreve took the mound for the Isotopes on Sunday, allowing three hits – all solo home runs – in 1.0 inning of work against the Las Vegas Aviators.

During his time in the Yankees' and Rangers' respective farm systems, Shreve was far more productive.

Shreve went 2-0 with a 1.61 ERA, 0.761 WHIP and 9.7 strikeouts per nine innings in 20 games with Triple-A Round Rock, then posted a 2-1 record with a 2.45 ERA, 0.818 WHIP and 9.0 strikeouts per nine innings across 10 appearances with Triple-A Scranton/Wilkes-Barre. On the whole this season, he is 4-1 with a 2.62 ERA, 0.845 WHIP and 9.2 strikeouts per nine innings.

But beyond his recent achievements in the minors, Shreve has more MLB experience than any other active Colorado reliever.

Shreve made his big league debut with the Atlanta Braves in 2014, and he went on to pitch for the Yankees, St. Louis Cardinals, New York Mets, Pittsburgh Pirates, Detroit Tigers and Cincinnati Reds over the next decade. He has appeared in 50-plus games in four separate seasons, most recently in 2023.

For his career, Shreve is 22-14 with a 3.97 ERA, 1.340 WHIP, 9.8 strikeouts per nine innings and a 3.4 WAR.

No active member of the Rockies' bullpen has a career WAR over 1.3, and only two have seen action in over 80 MLB games. Shreve, meanwhile, has made 367 major league appearances in his career.

Shreve is expected to be available out of the bullpen against the New York Mets on Tuesday. First pitch is scheduled for 8:40 p.m. ET.

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Sam Connon is a Staff Writer for Fastball on the Sports Illustrated/FanNation networks. He previously covered UCLA Athletics for Sports Illustrated/FanNation's All Bruins, 247Sports' Bruin Report Online, Rivals' Bruin Blitz, the Bleav Podcast Network and the Daily Bruin, with his work as a sports columnist receiving awards from the College Media Association and Society of Professional Journalists. Connon also wrote for Sports Illustrated/FanNation's New England Patriots site, Patriots Country, and he was on the Patriots and Boston Red Sox beats at Prime Time Sports Talk.

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Red Sox’ Triston Casas gives bleak recovery update amid Triple-A rehab assignment

“right now when i make contact with the ball, it feels like someone’s stabbing me with a knife right in the ribs.”.

By Kaley Brown

Triston Casas has only played in two games since starting his rehab assignment with the Triple-A Worcester Red Sox, but he doesn’t seem to be feeling great physically yet.

Through eight plate appearances this week with the WooSox, Casas said his ribcage injury is causing him immense pain in the batter’s box.

“Right now when I make contact with the ball, it feels like someone’s stabbing me with a knife right in the ribs,” Casas told NESN’s Laura Stickells on Friday. “Right when it happened I felt like I got shot with a gun, so it’s dulled down.”

I spoke with Triston Casas today in Worcester. He said, “Right now when I make contact with the ball, it feels like someone’s stabbing me with a knife right in the ribs… Right when it happened I felt like I got shot with a gun, so it’s dulled down.” — Laura Stickells (@LauraStickells) August 2, 2024

Casas played in a game on Tuesday for the first time since April 20 when he suffered torn cartilage in his ribcage while swinging the bat against the Pittsburgh Pirates. Casas played seven innings at first base and didn’t commit an error in his first defensive effort since April on Thursday. He was also Worcester’s designated hitter on Tuesday.

The Triple-A club gave Casas the day off from playing on Friday. Worcester intends to play him during their road trip next week, according to MassLive’s Chris Cotillo.

Despite Casas’s current physical condition, it sounds like he’s going to have to play through the pain. The 24-year-old told Stickells that doctors said there’s no way to ease his discomfort and that he’ll have to get used to the feeling.

The first baseman originally planned to return to the big league Red Sox in late June or early July. Casas’s plan didn’t pan out, but the fact that he’s begun a rehab assignment is a good sign that he could return this season, despite experiencing pain. If he continues to play through the pain and gains a higher pain tolerance, it’s feasible that he could rejoin the MLB club this month.

Casas didn’t say whether or not he anticipated missing much playing time during his rehab assignment because of the pain he’s experiencing. The Red Sox plan on checking in with Casas on a potential return date next weekend, per Cotillo.

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