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Assignment of Contract: When You Can Transfer Your Rights (And When You Can't)

Not every contract can be assigned to someone else — and doing it without checking can breach the very agreement you're trying to transfer.

5 min read

An assignment of contract transfers one party's rights and obligations under an existing agreement to a third party — common in real estate deals, business sales, and contract flipping — but whether it's actually allowed depends entirely on what the original contract says.

Check the original contract's anti-assignment clause first

Many contracts include a clause restricting or outright prohibiting assignment without the other party's consent. Assigning a contract that prohibits it — even with a properly drafted assignment document — can constitute a breach of the original agreement.

Assignment vs. delegation

Assigning rights (like the right to receive payment) is often treated differently from delegating duties (like the obligation to perform work) — some contracts allow one but not the other, a distinction that matters for what the assignment document actually needs to cover.

The original party isn't always released

Unless the other party specifically agrees to a novation (a full substitution releasing the original party), an assignment alone may leave the assignor still liable if the new party fails to perform — an important distinction to document clearly.

Getting the assignment properly documented

A well-drafted assignment identifies exactly what's being assigned, confirms any required consent from the other original party has been obtained, and addresses whether the assignor remains liable — gaps here are a common source of disputes after the fact.

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