The definition of assigns refers to the assignment of a contract, and it is what happens when one party in the contract gives his or her rights to another party. The party giving away rights is the assignor and the one receiving the rights is the assignee. The assignor typically asks that the assignee perform all the contractual obligations and receive all the benefits of the agreement. The person assigned the contract has to be aware of this assignation.

Subleased Property is an Example of an Assignment

One easy way to show what an assignment is would be when a tenant in a leased property decides to move and assigns, or subleases the property to a third party. The new tenant then has the right to take up residence in the property along with the obligation to meet all terms from the original lease. There are times, however, when the contract language affects the ability to make this type of assignment. Contracts may prohibit assignment using a clause, while some contracts simply require the assignee to consent to the agreement.

Contractual Assignment Issues

It isn't always possible to simply assign a contract. Some examples include:

  • When there is a clause in the contract that prohibits assignment
  • When the contract states the other party in the agreement has to accept or consent to the assignment
  • When an assignment is made, it doesn't necessarily relieve the assignor of the duty fulfill his or her obligations
  • When the contract states that even when assigned, the original parties must guarantee performance.

Anti-Assignment Clauses

An anti-assignment clause in a contract prohibits any assignment of the contract. If one of the parties tries to assign the contract, that assignment is void. This is common when an assignment:

  • Materially alters the scope of the agreement or what's expected
  • Impacts the performance or obligations that have been contracted
  • Reduces the value or expected return
  • Increases the risk faced by the other party
  • Violate public policy or involves breaking the law

Laws and Public Policies That Prohibit Assignment

Some examples of laws and public policies that prohibit contractual assignments include:

  • State regulations that prohibit an employee from assigning future wages
  • Federal regulations that prohibit some types of claims against the government from being assigned.
  • Personal injury claims that might encourage legal suits can't be assigned
  • Some types of personal duties, such as a performance by a celebrity, can't be assigned because they are extremely specific in regard to what must be done to complete the contractual obligation

An anti-assignment clause can be worded simply, stating that the parties involved can't assign or delegate rights under the contract's terms.

Privity of Contract

The term privity of contract tells you that if the assignee picks up the assignor's contractual duties, it indicates if the assignee has agreed to take on the assignment. For the assignee to be held to the legal duty to meet the contractual obligations, there has to be an expressed intention to take on the responsibility the assignor originally held in the agreement. The contract between the original parties wouldn't affect the issue, and a provision in the contract wouldn't be binding on the assignee in regard to rights to perform the assignor's obligations under the contract.

Contractor Work as an Example of an Assignment

One way to envision the process of assignment is to imagine yourself as a housing contractor. Someone pays you a sum of money to do a job. You get hurt and can't do it, or maybe you decide you can make more on a different job. You hire someone, a third-party subcontractor, to do the job in your place. The person doing the work in your place is the assignee and you are the assignor. You might pay the person taking over the work the full amount, or you may take a cut and pay them a smaller amount.

Obligor's Agreement Not Required

The success of an assignment doesn't require the obligor's agreement. If the assignment is valid, and there is no clause in the original agreement prohibiting assignment, the obligor's duty shifts from the original contracting party, the assignor, to the assignee. The obligor, as the non-assigning party, is contractually obligated to fulfill his or her duty to the assignee.

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