Everything You Need To Know About Assignment Law
Assignment is a legal term that means a contractual commitment that is based on the transfer of property right or property title from a party to second party. Assignment Law is a term that denotes this contract which is extremely useful in real estate industry and the legal term is often used in the law of contract. The concept essentially is the transfer of property or contractual rights from the assignor to the assignee.
Where are assignments used?
The legal document has been useful in contract and property matters. An assignment is useful in transferring benefits or rights to another person. The person who assigns is called “assignor” and the person to whom is assigned is called “assignee”. The assignment transfers a burden, duty or a detriment to the assignee. And the benefit assigned may be money with a contractual consideration or a gift.
An assignment is based on the principle of contingent or vested rights may and have an interest that is unbiased. Loans and Mortgages are amenable and straightforward to the Assignment. The assignor assigns legal rights like a note of mortgage that can be issued by borrower. Such a note requires the assignor to repay the assignee.
Difference between Novation and Assignments
A Novation is a concept similar to an assignment in which all parties agree to replace one contracting party with another party and it requires consent from all the concerned parties. On the other hand, an assignment differs from a novation as it does not require consent from the other parties. However, in the case of assignment, the consent of the non-assigning party may be required by a contractual provision. Usually an assignment is based on a transfer of the whole interest in an estate, property, a chattel, or any other item that is assigned.
Difference between Grant and Assignment
The physical transfer of property is called a Grant and the concept is very different from the concept of an assignment. Since the assignment is the legal right to transfer property which is intangible, it cannot be handles physically but a grant means the actual physical transfer and is tangible.
Prohibition of Right to Assignment
In certain cases, the right to assignment may be prohibited in which cases, it is important that the signee must analyze all the terms of the contract properly to determine whether the assignment can be done or not. In cases of property assignment, there might be a right to lease out instead of an assignment and the property owner will have limited rights in such a case.
Trademark and Assignment
Another feature of an assignment is the trademark which can be transferred by the holder and in such a case, they can transfer rights by selling interests or giving it to another party. Once this right is transferred, a particular assignee can exclude any other party from this trademark. For the order of assignment to become enforceable, the document must be in written form and should have the goodwill of respective organization whose mark the document bears. An effective assignment will have the below aspects:
- Both parties will have legal capabilities
- The object will be Legal
- There will be consent for consideration
Modus Operandi of an Assignment
The functionality of an assignment depends on how it is written down in the legal document and this will also determine the terms. So while one contract can forbid assignment, another can give right to assignment if all the involved parties have agreed to the same.
Situations where Assignment Cannot Be Enforced
In the following cases, the assignment of contracts will not be enforced:
- The signed contract particularly prohibits the assignment
- Assignment significantly changes probable outcome
- Assignment is illegal or the terms are against the public policy
Difference between Delegation and Assignment
In certain cases, any one of the parties in an assignment contract can delegate or pass on the respective responsibility to another party essentially a third party. This could be done without the creation of any assignment contract. But certain specific duties can never be delegated and in such a situation, a clause can be added to the contract which will prevent any party from the delegation of duties and responsibilities. This is recommended in cases where there are chances of delegation of certain responsibilities
Steps of Assigning a Contract
If a party wants to assign any contract, 3 steps need to be followed as mentioned below:
- It needs to be ensured that the contract has no mention of an anti-assignment clause.
- The assignment should be executed officially. In such a case the obligations and right of the parties should be transferred.
- It is significant that the obligor is notified about any changes made in the contract. After notifying the obligor, assignor is relived of liability effectively.
Anti-Assignment Clause is required in cases where any of the parties does not want to allow other party to assign contract. The clauses should clearly state these clauses. Through these clauses, any of the party involved in the contract cannot assign or delegate rights or obligations without a prior consent in written form from other party. A delegation that violates such a clause is deemed null and void.
So if you have a property dealing, do remember to understand all the terms and conditions related to contract of assignment to ensure that you are not cheated in such a transaction and you can benefit the maximum from the dealing.