An assignment agreement may be the best solution if you need or desire to transfer your rights, obligations, and benefits under a contract. Although this legally allowable transfer may seem complicated, using an assignment contract template designed expressly for this purpose can save you time and money. By understanding what an assignment contract does and how it works, you will be better positioned to broker a deal that relieves you of the contractual obligations and earn a profit.
What is an Assignment Agreement?
An assignment agreement effectively transfers the rights and obligations of a person or entity under an initial contract to another. The original party is the assignor, and the assignee takes on the contract’s duties and benefits. It’s often a requirement to let the other party in the original deal know the contract is being transferred.
When not prohibited by the original contract, the assignor steps into the situation and seamlessly continues to fulfill the agreement. Like any business form, a poorly written assignment agreement may leave the assignor obligated to certain aspects of the deal.
When to Use an Assignment Agreement?
The most common use of an assignment agreement contract occurs when the assignor is no longer able or desires to continue. Rather than leave the initial party, the obligor, without a provider, transfers the assignment contract to another organization.
For example, a small residential trash collection service plans to shutter its operation. Before closing the shop, the business brokers a deal to send their accounts to a curbside pickup company providing similar services. After notifying account holders, the new outfit continues the service.
What to Include in an Assignment Agreement?
A reliable assignment contract template is the most cost-effective way to transfer rights, obligations, and benefits. You can create a legally binding assignment contract by inputting the following information.
- Effective Date: The document must indicate when the transfer of rights and obligations occurs.
- Parties: Include the full name and address of the assignor, assignee, and obligor (if required).
- Assignment: Provide details that identify the original contract being assigned.
- Third-Party Approval: If the initial contract requires the approval of the obligor, note the date the approval was received.
- Signatures: Both parties must sign and date the printed assignment contract template once completed. If a notary is required, wait until you are in the presence of the official and present identification before signing. Failure to do so may result in having to redo the assignment contract.
How Does Assignment of Contract Work?
The person wishing to pass along their contractual obligations and benefits confirms the transfer if permissible. This can be determined by reviewing the original contract. If no clause exists barring a transfer, it is typically allowable. The use of a diligent assignment contract template can significantly simplify the process.
Take note that language may require you to give the obligor notice. If this is the case, you may need to craft a letter of assignment to notify the other party or parties of your intentions. Using a trustworthy letter of assignment template may be prudent to ensure you include all the necessary particulars.
How to Write an Assignment Agreement
Step 1 – Assignor and Assignee Details
List all of the pertinent information regarding the parties involved in the transfer. This includes full names, addresses, phone numbers, and relevant contact information. This step clarifies who transfers the initial contract and who takes on its responsibilities.
Step 2 – Provide Original Contract Information
Describing and identifying the contract that is effectively being re-assigned is essential. This step avoids any confusion after the transfer has been completed.
Step 3 – Consideration
Provide accurate information regarding the amount the assignee pays to assume the contract. This figure should include taxes and any relevant peripheral expenses. If the consideration is to be paid over a period, indicate the method and installments.
Step 4 – Terms and Conditions
The terms and conditions of any agreement are crucial to a smooth transaction. You must cover issues such as dispute resolution, governing law, whether the obligor needs to approve the deal, and any relevant clauses. Standard clauses are included on a smartly crafted assignment contract template.
Step 5 – Signatures
Both parties must sign the agreement to ensure it is legally binding and that they have read and understood the contract. If a notary is required, wait to sign off in their presence.
Assignment Agreement Sample
A formal assignment agreement template makes the process go smoothly. The template is an accurate guide that ensures all parties complete a valid and legally binding agreement.