What is an assignment?
Assignment transfers a party's rights under a contract to someone else, who then steps into the assignor's position.
An assignment transfers a party’s rights under a contract to someone else.
Where the word "Assignment" comes from
Assignment grew from the law's recognition that contract rights are property that can be transferred. Over time, courts allowed the transfer of rights while keeping obligations non-transferable without consent, a distinction that shapes modern contract drafting.
Why Assignment matters
It lets businesses sell receivables, insurers assign claims, and founders transfer rights when a company is acquired. Understanding whether a right can be assigned, and what the other party can do about it, is central to commercial practice.
Common confusion about Assignment
Assignment transfers rights, not duties. The assignor generally remains liable for performance unless the other party releases them, so assigning the right to receive payment does not free the assignor from the obligation to deliver the goods or services.
A real-world example of Assignment
A supplier is owed $50,000 by a retailer and assigns the right to collect it to a factoring company. The retailer must now pay the factor, but the supplier still owes the retailer the goods the contract requires.
A worked example of Assignment
A magazine sells its subscription list revenue to a finance company, assigning the right to collect future subscription payments. Subscribers must pay the finance company, but the magazine remains responsible for delivering the magazines, because the assignment carried the right to payment but not the duty to publish. If the contract prohibits assignment, the transfer may be ineffective, which is why many agreements contain explicit anti-assignment clauses.
How Assignment works in practice
If you assign a right, put it in writing and notify the obligor so payments are directed correctly. If you receive an assignment, verify it against the original contract, because an anti-assignment clause can void it. When drafting contracts, decide whether assignments are allowed, and if so, whether the assignor stays liable, because the language controls the outcome. In commercial practice, assignments of receivables are routine, but the assignee should confirm it has the right to collect and that the obligor has received notice, since an unannounced assignment can leave payments going to the wrong hands.
Questions about Assignment
Can I assign any contract?
Not if the contract forbids it or the duties are personal.
Does the other side have to agree?
For assigning rights, often not; for delegating duties, usually yes.
Am I still liable after assigning?
For rights, generally no; for delegated duties, you may remain liable.
What is a delegate?
The person to whom duties are delegated, distinct from an assignee of rights.