project assignment in the contract (2023)

Author's note, November 22, 2014: For a significantly improved update to this page, seeGeneral principles of joint drafting of articles.

(For more real-world stories like the one below, check out my PDF eBook,Sign a commercial contract? A quick checklist for added peace of mind, tips and synopses of real stories to help you avoid various potential minefields.Find out more….)

Legal background: ContractGenerally speakingfreely assignable

when the contracting partyassignThe contract is given to others, which means that party is invitedcustomer, assigned the rights from the contract to another person, the so-calledassignee, And alsoauthorizedtheir obligations to the proxy.

Under US law,mostcontractual rightsfreely assignable, and most contractual tasks are freely delegated, without any specific nature of the task, unless otherwise specified in the contract. However, in some cases the parties do not want the other party to be able to freely assign the contract; contracts often contain language to that effect.

Licensing of intellectual propertyrepresent exceptions to the general rules of portability. Under US law, an intellectual property licensee may not assign its license rights or delegate its license obligations without the licensor's consent, even if the license agreement is implied. see exampleAssociated with XMH Corporation., 647F.3d 690 (7. Cir. 2011.) (Posner, J; handelsmerklicenties);Cincom Systems v. Novelis., 581F.3d 431 (6th Cir. 2009) (Copyright Permission);Rhone-Poulenc Agro, SA 诉 DeKalb Genetics Corp., 284F.3d 1323 (Fed. Cir. 2002) (patent license). For more information seethis articleJohn Paul, Brian Kacedon and DouglasW. MeyerovaFinnegan Hendersonsociety.

Grant permission requests

model language

[party name] maybe notAssign this Agreement to any other person without express prior written consentCounter partyor its successor in interest (if applicable), unless otherwise expressly provided in this Agreement. So-called assignments without the necessary consent are null and void.

Electoral:I can not[party name]Without such consent, assign any right or interest arising under this Agreement, in whole or in part.

choose:For the avoidance of doubt, any transfer (absolute, mortgage or otherwise) or pledge of any right to payment under this Agreement, or assignment of any security interest, does not require consent.

Electoral:A transfer of this Agreement by operation of law, whether as a result of a merger, consolidation, affiliation or other transaction or series of transactions, requires the same degree of consent as a transfer to the same assignee outside of such transaction or series of transactions.

take out food

• This transfer consent requirement may bind the non-transferring party in the event of a future merger or corporate reorganization of the transferor - see example below.

• A party that must agree to a consent requirement for an agreement should consider negotiating one of the following exceptions, for example, when the agreement is
In connection with the sale of almost all assets of the transferor's business{clutch}.

case clip art

Dealing with Dubai (New York Times).StoryexistStory)

In 2006, the Dubai-based company that operates several US ports agreed to sell the business. (The deal was struck amid public and political pressure over the national security implications of Middle Eastern companies operating US ports.)

(Video) Coursera smart contract Week 4 Final Programming Assignment Design and Develop a Smart Contract

Things got complicated at the Port of Newark: The Dubai company's lease gave the Port Authority of New York and New Jersey the right to agree to any transfer of the contract — the agency initially asked for $84 million for the permit.

After being heavily criticized by political leaders, the Port Authority made some concessions: It agreed to a fee of "only" $10 million, plus an investment commitment of $40 million from the buyer.

Cincom Systems Inc. protiv Novelis Corporation,number 07-4142(6th Cir., Sept. 25, 2009) (summary judgment affirmed)

A software vendor client underwent an internal reorganization. As a result, the vendor's software began to be used by a sister company of the original customer. The seller asks the sister company to purchase a new license. The sister company refused.

The sellers successfully sued for copyright infringement and won the price for a new license, over $450,000 in damages. The case is covered in more detail inthis blog post.

The seller's behavior seems extremely short-sighted to me for a number of reasons: first, I don't bet too much on the likelihood that the customer will buysomethingAgain from this vendor. Two, memeetingRumors spread about what the seller did and it damages the seller's reputation.

Meso Scale Diagnostics, LLC tegen Roche Diagnostics GmbH,Number 5589-VCP(Del. Ch. Apr. 8, 2011) (motion to dismiss denied).

The Delaware Court of Chancery refused to rule out the possibility that the reverse triangular merger could be awarded as a contract, which would require liquidation under the terms of the contract. see alsoDiscussion of the proposalNapisala Katherine Jones, Sheppard Mullin LLP.

transfer of funds transfer

model language

Consent is not required for transfers of this Agreement in connection with the sale or other disposition of almost all assets of the Transferor's business.

Electoral:Alternatively, the sale or other disposition may include substantially all of the assets of the transferor's business specifically covered by this agreement.

Electoral:The transferee must not be a competitor of the non-transferring party.

take out food

• A potential transferee may argue that it must retain control over its own strategic destiny, for example, by retaining the freedom to sell product lines or divisions (or even entire companies) when selling assets.

• The non-transferring party can claim that it cannot allow the transfer of the contract to one of its competitors, and the only way to ensure this is to retain the right of vetoLosWork.

• Another approach could be to give the non-transferring party the right, instead of a veto, to transfer the propertyFor easier contract cancellation(Of course, the implications of termination should be carefully considered.)

(Video) What is an Assignment of Contract? | Buying a Pre-Sale Assignment | BC Real Estate

Allocation to affiliates

model language

[both sides]This Agreement may be assigned to its affiliates without permission.

Electoral:The transferor must unconditionally guarantee the performance of the transferee.

Electoral:Affiliates may not be competitors of the non-transferring party.

Electoral:Member must haveHolding's subsidiaryof the transmitter.

take out food

• Potential transferors can claim the right to transfer assets to related companies, retaining their freedom to transfer assets within the corporate family without seeking approval.

• The other party may reasonably object because there is no way of knowing in advance whether the relevant transferee will be able to perform the assignor's obligations under the contract or will have assets available in the event of default.

Editor's comment:Before granting a general mandate to transfer an affiliate, a party should consider whether it knows enough about the other party's existing or potential affiliates to know where the deal might end up.

Consent must not be unreasonably withheld or delayed

model language

Consent to any assignment of this Agreement shall not be unreasonably withheld or delayed.

Electoral:For the avoidance of doubt, any damages suffered by a party seeking to grant a consent required by this Agreement due to an unreasonable refusal or delay in consent shall be deemed direct damages.

Electoral:For the avoidance of doubt, any damages suffered by a party seeking to grant the consents required by this Agreement as a result of any unreasonable refusal or delay of consent shall not preclude any remedies or other limitations of liability contained in this Agreement.

take out food

• Applicable law may impose a requirement of reasonableness even in the absence of such a provision; see discussion ofShawneeCase in the commentsWe make arrangements at our own discretionin stock.

(Video) Assignment of Contracts | Indian Contract Act, 1872 | Sanyog Vyas

• Requirements of reasonableness may not have much practical value, whether contractual or implied by law. Such a request does not guarantee that the non-transferring party will give its consent if the transferring party so desires. By the time the court decides the case, the transferor's contract may have lapsed.

• However, unreasonable holdover clauses should make non-assignors think twice about delaying too much as there may be liability for damages for failed transactions.look. Pennzoil i Texacoand $10.5 billion in breach damages
Participate in M&A transactions.

• Provisions containing unjustified delays can beThe importance of participation in defaultprovided that, for the reasons set forth in the SummaryHess energycase.

We make arrangements at our own discretion

model language

The party entitled to grant or withhold consent to the transfer of this Agreement may do so in its sole discretion.

take out food

• If a party wants to have an absolute right to refuse to agree to an agreement at its own discretion, it is best to try to include that in the language of the contract. Otherwise, the court may apply the commercial reasonableness test under applicable law (see next point). On the other hand, if the parties have an implied right to withhold consent at their own discretion, then requiring such language and not receiving it could be fatal.

• State law may require a reasonableness requirement if a business or residential lease requires the landlord's consent to grant the lease. I haven't researched this, but I came across an unpublished opinion in California and an old law review article, each with cases.Check Nevada Atlantic Corp tegen Wrec Lido Venture, LLC, br. G039825(California App. Dec. 8, 2008) (unpublished; reversing our judgment that our discretionary withholding of consent was unreasonable); Paul J. Weddle, Pacific First Bank v. New Morgan Park Corporation:Reasonable refusal to consent to the assignment of a commercial lease, 31 Willamette L. Reverend 713 (1995) (first page available athealth online).

case clip art

Shoney's LLC tegen MAC East, LLC,number 1071465(Alabama, July 31, 2009)

In 2009, the Alabama Supreme Court rejected a claim that Shoney's restaurant chain breached its contract by demanding a payment of $70,000 to $90,000 in exchange for agreeing to a proposed sublease. The Supreme Court noted that the contract expressly authorized Shoney's,at its own discretion, consent to any proposed transfer or sublease.

Notably, prior Alabama case law held that withholding consent would indeed be evaluated based on commercial reasonableness. However, the Supreme Court stated that "the terms of such a contract are not altered by an implied contract of good faith if the language used by the parties to the contract does not meet the standard of commercial reasonableness. Therefore, unqualified express standards such as ``some discretion,'' also interpreted as written .Shoney's LLC tegen MAC East, LLC,number 1071465(Alabama, July 31, 2009) (certified by the Eleventh Circuit),Quoted from MAC East, LLC tegen Shoney's [LLC],number 07-11534(11e around August 11, 2009),look back Fold. 2:05-cv-1038-MEF (WO)(Alabama, MD Jan. 8, 2007) (partial summary judgment for breach of contract by Shoney's).

terminated by the non-transferring party

model language

The non-transferring party may terminate this Agreementcommercial discretion, by specifying this layout60 danaUpon receipt of notification from the transferor or transferee that the transfer of this Agreement has entered into force.


Consider a contract where the supplier must provide continuous service to the customer. Even in strategic transactions, powerful buyers can exercise their right to agree to the assignment of the contract by the seller. Salespeople, on the other hand, may resist giving clients such control over their strategic choices.

A viable compromise could be to allow customers to terminate the contract within a certain time frame after engagement if they are not satisfied with the new service provider.

(Video) Assignment of Consideration

Assignment - Miscellaneous Provisions

model language

Electoral: delegation:For the avoidance of doubt, the transfer of this agreement shall be deemed a transfer of the transferor's rights and delegation of obligations hereunder.

Electoral: Promise to fulfill:For the avoidance of doubt, the transferee's acceptance of the assignment of this agreement constitutes the transferee's obligation to perform the assignor's duties under this agreement. This promise can be performed by the assignor or the non-assignor.

Electoral: The transferor accepts in writing:If: the non-assignee submits a claim to this contract to the assignee; then: the assignee shall immediately deliver to the non-assignor a written acceptance of the assignor's obligations, duly signed by or on behalf of the assignee; otherwise: the assignment is void.

Electoral: No issue:For the avoidance of doubt, unless otherwise agreed in writing by the non-transferring party, no assignment of this Agreement shall relieve the assigning party of its obligations under the Agreement.

Electoral: Confidentiality:The non-transferring party shall keep confidential any non-public information disclosed to that party by any party participating in or seeking consent to the transfer in connection with an actual or proposed transfer of this Agreement.


fromdelegationProvisions may not be required in contracts for the sale of goods covered by the Uniform Commercial Code, as similar provisions appear inDWU 2-210

fromkeep the secretThis clause is useful if one party to the contract wants to participate in any form of merger or other strategic transaction.

The importance of participation in default

model language

If: a party breaches any requirement of this agreement that such party must obtain the consent of the other party to transfer this agreement; then: such breach shall be deemed a material breach of this Agreement.


An important implication of this type of clause is that, unless permission to assign is obtained, the non-assigning party will be entitled to terminate the contract if a material breach is established.

If the terms of consent to the transfer requirewill not unreasonably withhold consent, but without consentreasonableThe court says that the order does not constitute a material violationHess Energy Inc 诉 Lightning Oil Co.,number 01-1582(4th Cir. Jan. 18, 2002) (summary judgment reversed). In that case, the agreement is a gas supply contract. The client is acquired by a larger company, which then takes on some contract management responsibilities, such as paying supplier invoices. The seller, wanting to sell its gas to someone else at a higher price, issued a termination notice on the grounds that the buyer had "assigned" the contract to its new parent company, thereby breaching the terms of the agreement. The Court of Appeal ruled that even if the buyer had indeed assigned the contract without consent (which it expressed considerable doubt), the resulting breach was not so serious that the seller was not entitled to rescind the contract. contract.

see also (automatically generated list):

  1. Notebook Update: A reverse triangular merger may be a contract award that requires approval I just updated the notebook to cite a case where the Delaware Court of Chancery refused to rule out reversal. ...
  2. Many contracts stipulate that if Party A wishes to assign the contract ..., Party B must obtain Party B's prior written consent.
  3. SCOTX disclaims implied liability for unreasonably withholding consent to award contracts In a recent case in Texas, two sophisticated parties in the oil and gas industry -- let's call them Alpha and Bravo -- negotiated a contract...
  4. Ken Adams and the market of ideas I (in the past) occasionally comment on Ken Adams' blog. Recent examples: here, here, here, here and here. Ken and I disagree on some things; some...


What is an assignment in contract? ›

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

What is the difference between transfer and assignment? ›

When used as verbs, assign means to set apart or designate something for a purpose while transfer means to pass or move from one person, place, or thing to someone or someplace else.

What is the difference between assignment and novation of a contract? ›

Assignment v novation

An assignment transfers the benefit of a contract from one party to another, but only the benefit, not the burden. In contrast, a novation will transfer both the benefit and the burden of a contract from one party to another.

What is an example of assignment and delegation in a contract? ›

“Assignment” refers to transferring some or all of one's rights under an agreement to someone else. Example: I assigned my right to receive payments under the contract to my mother. “Delegation” refers to transferring some or all of one's obligations under an agreement to someone else.

What is an example of assignment of a contract? ›

For example, 'A' gets a contract to cut the grass from 'B's garden. 'A' might delegate the work to 'C' without actually assigning the contract to him. But 'A' will still control the work and receive the payment.

What is the purpose of the assignment? ›

An assignment is a piece of (academic) work or task. It provides opportunity for students to learn, practice and demonstrate they have achieved the learning goals. It provides the evidence for the teacher that the students have achieved the goals.

Is assignment the same as ownership? ›

An assignment is the legal transfer of ownership of any property such as a trademark or copyright from one owner to another. The transferee or "assignee" is the person who acquires ownership, and the transferor or "assignor" is the person who transfers ownership rights.

Is an assignment the same as a sale? ›

An assignment is a sales transaction where the original buyer of a property (the “assignor”) allows another buyer (the “assignee”) to take over the buyer's rights and obligations of the Agreement of Purchase and Sale, before the original buyer closes on the property (that is, where they take possession of the property) ...

What is the difference between assignment and binding? ›

Binding has to do with giving names to things (or values) in a given well delimited context. Assignment is about storing things (or values) in some location (a variable).

Can a contract be assigned without consent? ›

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.

Does an assignment release the assignor? ›

Upon assignment, the assignee becomes the new buyer. The AC conveys to the assignee both the AC's property rights and the AC's contract obligations. After an assignment, the assignor is out of the picture.

What are the 3 kinds of novation? ›

The Various Kinds of Novations
  • In the first type, there's no intervention of another party. ...
  • The second type of novation of contract involves the entrance of a new debtor. ...
  • The third type of novation of contract involves a new creditor taking the place of the original creditor.

Is assignment of contract legal? ›

An assignment of contract is a legal term that describes the process that occurs when an existing contract assignee wishes to transfer their contractual obligations to another party.

What if a contract is silent on assignment? ›

If the contract is silent on assignment and other dealings, a party can normally assign, mortgage, charge or declare a trust over its rights under the contract, without the other party's consent and use a subcontractor to perform (but not transfer) its contractual duties.

What is the assignment in a contract who does it? ›

Assignment of contracts is the legal transfer of the obligations and benefits of a contract from one party, called the assignor, to another, called the assignee. The assignor must properly notify the assignee so that he or she can take over the contractual rights and obligations.

What are the examples of assignment? ›

The students were given a homework assignment. The reporter's assignment is to interview the candidate. The reporter is here on an assignment. The reporter is here on assignment.

What are the 4 types of assignment? ›

As you study you might be asked to submit assignments in different formats, such as essays, reports, short-answer questions, speaking assignments or a précis.

What is the importance of project assignment? ›

Assigning responsibilities for project team members boosts efficiency. Having a clear understanding of project roles allows the leader to develop a timeline. Such a chart lists who is in charge of which task and when the specific portion of the project is expected to reach completion.

What does assign mean in legal terms? ›

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.

Is an assignment agreement a contract? ›

Assignment contracts are a vehicle used by real estate investors to transfer one party's rights and obligations under an existing real estate contract to another party. Assignment contracts don't involve transferring or selling the property directly like a purchase agreement.

Does an assignment require consideration? ›

The assignor must receive consideration for the agreement, otherwise the assignment will be ineffective. However, an absolute assignment does not require consideration to be given.

Can an assignment be revoked? ›

The revocability of an assignment depends on the type of assignment. Assignments made for value, or with consideration, are irrevocable. This means that the assignor cannot cancel or take back the assignment. Donative assignments, though, are generally revocable.

What contracts Cannot be assigned? ›

The most common example of the non-delegable or non-assignable nature of a personal service contract is that of a famous opera singer who has contracted with an opera to perform. She cannot assign her contractual duty to another singer because the nature of the services is unique and personal.

What makes an assignment enforceable? ›

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

What are the different types of assignment agreements? ›

There are two types of assignment: contract assignment and assignment of rights. Contract assignment is when the assignor assigns the rights, responsibilities and obligations of a contract to the assignee. Assignment of rights is when the assignor only transfers the rights of the contract to the assignee.

What is the meaning of deed of assignment? ›

Meaning of deed of assignment in English

a legal agreement to give an asset or to sell a debt to someone else: This deed of assignment enables ownership of a life-insurance policy to be transferred from the current owner to another person or organization.

What is a legally valid assignment? ›

A valid legal assignment only occurs when all underlying elements of a lawfully binding contract are included in it, including intent. A trial court can determine if an assignment has occurred. To prevent disputes or miscommunications, it's important that the subject matter is clearly identified in the assignment.

What can make a contract unenforceable? ›

Additionally, there are eight specific criteria a court will use to determine whether or not a contract is unenforceable: lack of capacity, coercion, undue influence, misrepresentation and nondisclosure, unconscionability, and public policy, mistake, and impossibility.

Does assignment create a new contract? ›

An assignment does not require a new contract. The assignor must only record the assignment in writing, 7 sign it and provide written notice of the assignment to the other party to the contract.

Is the assignor still liable after assignment? ›

Even after the assignor transfers their rights to another, they still remain liable if any issues arise unless otherwise noted in an agreement with the other party.

Does assignment require Acknowledgement? ›

An acknowledgement is an essential part of every assignment or project. An acknowledgement is a short write-up that is written with the motive of thanking all of the people who played an instrumental role in helping you or your group overcome the difficulties and complete the assignment.

Are assignment clauses enforceable? ›

The clause that prohibits the assignment of work or service is a valid clause, completely enforceable and does not bear much importance. However, the clause that prohibits the assignment of payment is a more complex clause that affects crucial buying and selling decisions.

Which contract is forbidden by law? ›

1] Forbidden by Law

When the object of a contract or the consideration of a contract is prohibited by law, then they are not lawful consideration or object anymore. They then become unlawful in nature. And so such a contract cannot be valid anymore.

What are the disadvantages of novation? ›

Disadvantages: Novation Requires a Good Relationship Between the Contractor and the Architect: The contractor and architect must work together closely on any design and build project, but this is particularly important when novation has taken place.

What is an alternative to a novation agreement? ›

Overall, assignment is more convenient for the assignor than novation. The assignor is not required to ask for approval from a third party in order to assign their interest in an agreement to the assignee.

Does an assignment need to be notarized? ›

You can have an Assignment notarized or witnessed by individuals not party to the contract, but it's not a requirement. You should always review and consider the terms of your original contract before assigning it.

Should an assignment be notarized? ›

Though the agreement is a legal document, it does not need to be notarized. However, obtaining notarization for the signatures provides added protection, limiting the risk of a party later claiming a signature was not valid.

What is the difference between assignment and delegation? ›

The difference between assignment and delegation is that an assignment can't increase another party's obligations. Delegation, on the other hand, is a method of using a contract to transfer one party's obligations to another party. Assigning rights is usually easier than delegating, and fewer restrictions are in place.

What is the most ignored clause in a construction contract? ›

Dispute resolution clauses: These clauses are the most ignored of the 5 key clauses. This is because hope springs eternal at the start of a project and no one thinks a dispute will arise.

When can a contract not be assigned? ›

In certain cases, contracts can't be assigned. A clause in the contract prohibits assignment. This is usually called an anti-assignment clause. Assignments can't take place if they materially alter what's expected under the contract.

What violates a contract? ›

A breach of contract is a violation of any of the agreed-upon terms and conditions of a binding contract. The breach could be anything from a late payment to a more serious violation, such as the failure to deliver a promised asset. A contract is binding and will hold weight if taken to court.

What is an example of assignment of duties? ›

On a day when a half-time physical education teacher spends the morning at one building and the afternoon at another, said half-time physical education teacher shall be allowed seventy-five minutes including lunch for travel time.

Is an assignment legally binding? ›

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.

Why would a buyer assign a contract? ›

An assignment of contract in real estate is when the original party who has a piece of real estate transfers their contractual obligations to that of a new party. Assigning real estate contracts is a common way to “flip” real estate without having to come out of your pocket with any capital.

What is an example of an assignment in real estate? ›

The difference between the agreed-upon value and the price you reach with the buyer will be your profit. For instance, if you agreed with the seller that you would purchase the property for $170,000 and you then assigned the contract to the buyer for $230,000, your profit (assignment fee) will be $60,000.

What makes an assignment invalid? ›

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.

What is the rule of assignment? ›

Assignment rules dictate to whom a lead or case is assigned based on criteria specified within Salesforce. Typically, your organization will have one rule for each overall purpose — like one lead assignment rule for importing leads and a different lead assignment rule for web-generated leads.

Is assignor still liable after assignment? ›

Even after the assignor transfers their rights to another, they still remain liable if any issues arise unless otherwise noted in an agreement with the other party.

Can a buyer back out of an assigned contract? ›

You are still responsible for the purchase of the property and are the one to follow through with contract. Ultimately what happens is you are in breach of contract if you do not follow through with the purchase. You will lose anything that you put down on the property as earnest money.

Who gets assignment fee? ›

An assignment fee is a payment from the “assignor” (wholesaler) to the “assignee” (cash buyer) when the assignee transfers their rights or interest of a property to the assignor during the close of a real estate transaction. Most often, this term is used in the real estate investing strategy of “wholesaling”.

What is the difference between assignment and purchase? ›

Assignment contracts don't involve transferring or selling the property directly like a purchase agreement. Instead, the buyer under the original purchase agreement (the assignor) assigns their rights and obligations under the purchase agreement to the assignee, sometimes for a profit.

How does an assignment work in real estate? ›

An assignment is a sales transaction where the original buyer of a property (the “assignor”) allows another buyer (the “assignee”) to take over the buyer's rights and obligations of the Agreement of Purchase and Sale, before the original buyer closes on the property (that is, where they take possession of the property) ...

What type of contracts Cannot be assigned? ›

Personal Service Contracts

The most common example of the non-delegable or non-assignable nature of a personal service contract is that of a famous opera singer who has contracted with an opera to perform.

Can you revoke an assignment? ›

The revocability of an assignment depends on the type of assignment. Assignments made for value, or with consideration, are irrevocable. This means that the assignor cannot cancel or take back the assignment. Donative assignments, though, are generally revocable.


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