A contract assignment occurs when one party in a contract transfers or “assigns” their contract rights to another party. For instance, suppose that party X contracts with party Y, stating that Y will build their house. X can then assign their rights to the building to another party (Z) if they choose to do so. Here, X is called the “assignor” while Z is called the “assignee.”

When Can a Party Assign Contractual Rights to Another Party?

Contractual rights may be assigned to another party at any time, unless:

  • The contract prohibits assignment of contractual rights
  • The assignment would fundamentally change certain duties or risks involved in the contract
  • The assignment has to do with future rights derived from a future, non-existent contract
  • The assignment is legally prohibited by law

Aside from these situations, contract assignments are allowed and frequently occur in many situations. This is especially common in contracts involving sub-contracts and building projects.

Does a Contract Assignment Need to Be in Writing?

In most cases, an oral agreement is sufficient enough for a contract assignment to be valid. Also, the original party (the obligor) doesn’t need to be informed of the assignment. However, as in any contract situation, it’s always best for the agreement to be reduced to writing and signed by all the parties involved. This will help everyone to be “on the same page,” and can help provide a record of interactions in case a lawsuit arises.

Do I Need a Lawyer for Help with Contract Assignments?

Contract rights can often contain many terms, and they can get more complex when other parties enter the picture. If you have any questions, concerns or disputes involving contract assignments, you may need to hire a contract lawyer for advice and guidance. A qualified lawyer will be able to help when it comes to drafting document, reviewing agreements, and other tasks. Also, your lawyer can represent you if you need to file a legal claim in court.