Key Takeaways:

  • A transfer of rights contract enables individuals to delegate their contractual rights and responsibilities to another party, either via assignment or delegation.
  • Assignments transfer full contractual rights to the assignee, while delegations transfer duties but maintain liability with the original party.
  • Copyrights are unique in that they can be partially or wholly transferred but remain protected by legal ownership.
  • Additional legal considerations include the specific state laws governing assignments, delegations, and copyright transfers.
  • Alternatives to guardianship in rights transfers for individuals with disabilities may involve educational powers of attorney or supported decision-making agreements.

A transfer of rights contract allows you to transfer your contractual rights and responsibilities to another party. Transferring contract rights can happen either through assignment or delegation.

Assigning Contractual Rights

If you want to transfer your contractual rights to another person, you will need to make an assignment. On the other hand, if you're only interested in transferring your contractual duties but not your rights, you would use a delegation. After an assignment takes place, full contractual rights will be transferred to the assignee. These will be the exact same rights as enjoyed by the original contracted party.

If the contractual rights being transferred aren't personal, then the party assigning their rights does not need to obtain permission from the other contracted party. Permission is a requirement if the assignment involves personal services.

There are certain circumstances when assignment is not possible:

  1. The contract prohibits assignment.
  2. Assignment is illegal or violates public policy.
  3. The assignment get rejected by a court.

Legal and Practical Limits of Assignments

Some contracts explicitly restrict assignments, which can prevent a transfer unless agreed upon by all parties involved. Legal limitations on assignments include:

  • The nature of the contract, such as personal services agreements, where the unique skills or expertise of a specific individual are required.
  • State-specific laws may also impose restrictions on certain types of contractual rights. For example, rights tied to licenses or permits often require governmental approval before transfer.
  • Commercial contexts may include anti-assignment clauses to ensure the original party retains obligations under the contract.

Delegating Contractual Obligations

Delegation is much different than assignment. With a delegation, you are transferring the obligation of performance to another party. Basically, this means that another person is performing your contractual duties but you are still legally responsible for the contract. For instance, if you delegated a contractual payment, and that payment is not made, the other party in the contract can hold you liable for the missed payment.

Certain contractual obligations are not eligible for delegation. If completion of the contract requires special knowledge, skills, or talents, delegation is not allowed.

Legal Risks in Delegation

While delegation shifts duties to another party, the original party remains accountable for performance failures. Common risks include:

  • Breach of contract claims due to non-performance by the delegatee.
  • Potential for disputes over the quality or timeline of delegated obligations.
  • Limits on delegation for specialized tasks requiring expertise or personal trust.

Making an Assignment

If you want to assign your contractual rights to another party, you can do so in writing or verbally depending on the laws in your state. Either way, you should give the other party in the contract notice that you are making an assignment. Once notice is sent, the other party can perform their contractual duties on your behalf.

After receipt of the notice, the other party should fulfill their responsibilities to the assignee instead.

Steps to Formalize Assignments

To legally formalize an assignment, follow these steps:

  1. Review the original contract to identify restrictions or necessary consents.
  2. Draft an assignment agreement detailing the rights being transferred, the effective date, and any associated conditions.
  3. Notify the non-assigning party, ensuring they agree to the change and understand their obligations to the assignee.
  4. Retain legal counsel to validate the assignment's enforceability.

Transferring Copyrights

A tricky situation when it comes to transferring contract rights is who has the ability to transfer a copyright. The basic rule is that the person that holds the copyright owns exclusive rights to the work covered by the copyright. This means that only the copyright holder may license the creative work. The only exception to this rule is when the person that created the copyrighted work did so in a work-for-hire situation. In this case, the organization that hired the creator would own the copyrights.

Copyrights are like other types of property in that the owner of the copyright can transfer these rights to owner person. Copyrights are transferrable in whole or in part. For example, if you are a photographer, copyright law would apply whether or not you were paid for your services.

If someone else copies, sells, or uses your copyrighted photograph without your permission, they have violated your copyright, which is illegal and may result in both criminal and civil penalties. Even if someone buys a copy of your photograph, this doesn't mean that you have transferred ownership of your copyright. The buyer would not have the right to reproduce your photograph or publish the image.

As a copyright holder, you have the ability to license your copyright or to transfer it to another person. You could grant a company a license to reproduce your photo, for example. Copyright owners can transfer exclusive rights to their property to another person. If you want to transfer exclusive rights to a copyright, you must do so in writing. Otherwise, the transfer would not be valid. This written transfer should include the copyright owner's signature.

You do not need a written agreement when transferring non-exclusive rights to your copyright. If a copyright holder dies, ownership of the copyright can be transferred through a will or by the laws of succession.

Because a copyright is a type of personal property, state regulations and laws apply to copyright ownership. These laws also apply to transferring copyrights and inheritance of these property rights. If you have questions about which laws apply to transferring copyrights in your state, you should consult an attorney.

Copyright Reversion and Termination Rights

In some cases, creators of intellectual property retain termination rights, allowing them to reclaim copyrights after a specific term. Key factors include:

  • Federal copyright law provisions enabling termination, generally 35 years after the original transfer.
  • State inheritance laws that may affect the rights of successors or heirs.
  • Procedures for reversion requiring advance notice to current copyright holders.

FAQ Section:

  1. What is the difference between assignment and delegation?
    Assignment transfers contractual rights, while delegation transfers duties but holds the original party responsible for non-performance.
  2. Can all rights be transferred under a contract?
    No, some rights are non-transferable, such as personal service contracts or those restricted by anti-assignment clauses.
  3. What are termination rights in copyright law?
    Termination rights allow original copyright holders to reclaim transferred copyrights after 35 years under federal law.
  4. How can I ensure my copyright transfer is valid?
    A valid copyright transfer requires a written agreement signed by the copyright owner, specifying the extent of rights being transferred.
  5. What happens if the delegatee fails to fulfill their obligations?
    The original party remains liable for any failures to meet the contractual terms, even after delegation.

If you need help with a transfer of rights contract, you can post your legal needs on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.