/ March 31st, 2012 / Comments Off on Assignment


Assignment is the transfer either a right (which is obtained through a contract) or an interest in property to another person. It is possible to assign various rights in a contract to a third party, without the consent of the other party to the contract. An assignment can either be equitable or legal.

It is important to be aware of the fact that assignment only transfers rights to another. If you want to transfer obligations under a contract, this should be done through the method of novation.

Legal Assignment

The legislation surrounding a legal assignment is outlined in section 136 of the Law of Property Act 1925. There are various requirements necessary for an assignment to be legal. The first is that in an agreement, it is only the benefit that can be assigned. This has been mentioned above. The second requirement is that the assignment needs to be absolute. The third requirement is that any assignment should be in writing, signed by the person who is assigning. The fourth requirement is that the rights need to be wholly ascertainable. The last requirement is that in order for the assignment to have effect, notice must have been given to the other party.

Equitable Assignment

It may be possible to have an equitable assignment if various legal requirements for an assignment have not been met. It is possible to create an equitable assignment using two methods. The first is that the person who wishes to assign his rights (the assignor) can contact the person he wants to assign his rights to (the assignee) and tell him he wants to transfer his rights. The second method of creating an equitable assignment is by giving the instruction to the other parties of the contract/agreement to release their burden to the assignee rather than the assignor.

It is important to note that under an equitable assignment, it is not necessary for the assignment to be in writing. It is also not necessary for the notice to be received. The main differentiation between an equitable and legal assignment is that under the former, should the assignee wish to pursue a claim against a third party, he will have to do this jointly with the assignor.

What Assignment Achieves

Assignment does not make the assignee a party to the original contract. Furthermore, assignment does not establish a contract between the party who has not assigned and the assignee. Its aim is merely to transfer a right/benefit in a particular agreement/contract from an original party to the contract to a third party. Assignment does not involve the transfer of the burden (obligation) of a contract (although this can be done in a different way known as novation), so it is important to remember that liability for the burden remains with the assignor, irrespective of who he assigns the benefit to.

If you are entering a contract/agreement, and do not want it to be possible for the other party to assign their benefit to any third party, it is possible to prevent this from happening. The way to achieve this is to ensure that in the negotiations for your contract/agreement, there is a condition that the contract contains a restriction on assignment.

If you are thinking about assigning a particular right/benefit to a third party, it is advisable to seek legal advice on the consequences this could entail. It is important to ensure you are well-informed before you assign any right or benefit over to a third party.

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