Editing Assignment (law) (section)

==Assignment of contract rights==
{{Contract law}}

After the assignment of contractual rights, the assignee will receive all benefits that had accrued to the assignor. For example, if A contracts to sell his car for $100 to B, A may assign the benefits (the right to be paid $100) to C.{{efn|In this scenario, Party A is the obligee/assignor, Party B is an obligor, and Party C is the assignee.}} In this case, Party C is ''not'' a ''[[third party beneficiary]]'', because the contract was not made for C's benefit. Assignment takes place after the contract was formed; they may not precede them.{{citation needed|date=April 2018}}

===When assignment will be permitted===
The [[common law]] favors the freedom of assignment, so an assignment will generally be permitted unless there is an express prohibition against assignment in the contract. Where assignment is thus permitted, the assignor need not consult the other party to the contract. An assignment cannot have any effect on the duties of the other party to the contract, nor can it reduce the possibility of the other party receiving full performance of the same quality. Certain kinds of performance, therefore, ''cannot'' be assigned, because they create a unique relationship between the parties to the contract. For example, the assignment of a legal malpractice claim is void since an assignee would be a stranger to the attorney-client relationship, who was owed no duty by the attorney and would imperil the sanctity of the highly confidential and fiduciary relationship existing between attorney and client.

Torts are not assignable as [[public policy]], and various statutes may prohibit assignment in certain instances.<ref name=Stark2003/> In addition, the [[Restatement (Second) of Contracts]] lists prohibitions in §317(2)(a) based upon the effect to the non-assigning party (obligor),<ref name=Stark2003/> with similar prohibitions in the [[Uniform Commercial Code]] §2-210.<ref name=LexisNexisStudy>[http://www.lexisnexis.com/lawschool/study/outlines/html/contracts/contracts18.htm Chapter 18: Assignment and Delegation]. LexisNexis study outline.</ref> For example, UCC §2-210 states the following:<ref>[https://www.law.cornell.edu/ucc/2/2-210 Uniform Commercial Code § 2-210. Delegation of Performance; Assignment of Rights].</ref>
{{cquote|Unless otherwise agreed all rights of either seller or buyer can be assigned except where the assignment would materially change the duty of the other party, or increase materially the burden or risk imposed on him by his contract, or impair materially his chance of obtaining return performance. A right to damages for breach of the whole contract or a right arising out of the assignor's due performance of his entire obligation can be assigned despite agreementotherwise [sic].}}

Equipment Lease Agreements typically contain language prohibiting the lessee from assigning the [[lease]] to a third party. For example, "You have no right to sell, transfer, assign, sublease, or encumber the equipment or this agreement" protects the Lessor’s [[Collateral (finance)|collateral]] and credit [[underwriting]] guidelines in the event the lessee ever wants to transfer the lease to another party. However, it is possible to assign the lease, but the new party (assignee) will be subject to the lessor’s credit evaluation process and approval. Even if the assignee is approved, the existing lessee’s (assignor’s) personal guarantee(s), if any, might not be released unless the assignee’s credit stature is extremely strong.

===Legislation preventing assignment===
The US Congress first restricted the assignment of claims against the United States government in 1846, when it passed "An Act in Relation to the Payment of Claims".<ref>Ch. 66, 9 Stat. 41 (1846)</ref><ref>United States Court of Appeals for the Federal Circuit, [https://cases.justia.com/federal/appellate-courts/cafc/09-5031/09-5031-5032-2011-04-25.pdf?ts=1411156226 Dominion Resources, Inc., Dominion Nuclear Connecticut, Inc., and Virginia Electric and Power Company v United States], Gajarsa's opinion, page 2, decided on 25 April 2011, accessed on 18 June 2024</ref> [[Title 41 of the United States Code]] § 6305 now provides the federal prohibition on transfers of government contracts, stating that the governmental entity which originally issued a contract must agree to any transfer or it is automatically invalid by law.<ref>[https://www.law.cornell.edu/uscode/text/41/6305 41 U.S. Code § 6305 - Prohibition on transfer of contract and certain allowable assignments], accessed on 25 January 2021.</ref>

===Requirements for an effective assignment===
For assignment to be effective, it must occur in the present: a promise to make a future assignment has no legal effect.<ref>US Legal.com, [https://assignments.uslegal.com/ Assignments], accessed 29 June 2023</ref> No specific language is required to make such an assignment, but the assignor must make some clear statement of intent to assign clearly identified contractual rights to the assignee. A promise to assign in the future has no legal effect. Although this prevents a party from assigning the benefits of a contract that has not yet been made, a [[court of equity]] may enforce such an assignment where an established economic relationship between the assignor and the assignee raised an expectation that the assignee would indeed form the appropriate contract in the future.

A contract may contain a non-assignment clause, which prohibits the assignment of specific rights and some various rights, or of the entire contract, to another. However, such a clause does not necessarily destroy the power of either party to make an assignment. Instead, it merely gives the other party the ability to sue for breach of contract if such an assignment is made. However, an assignment of a contract containing such a clause will be ineffective if the assignee ''knows'' of the non-assignment clause, or if the non-assignment clause specifies that "all assignments are void".

Two other techniques to prevent the assignment of contracts are ''[[Rescission (contract law)|rescission]] clauses'' or clauses creating a ''[[condition subsequent]]''. The former would give the other party to the contract the power to rescind the contract if an assignment is made; the latter would rescind the contract automatically in such circumstances.

====Requirement of a writing====
There are certain situations in which the assignment must be in writing.
#Assignment of [[wages]]; additionally, statutes may prohibit this assignment<ref name=Stark2003/>
#Assignment of any interest in [[real property]]
#Assignment of [[Chose (English law)|choses in action]] worth over $500

===Delegation===
A parallel concept to assignment is ''[[delegation (law)|delegation]]'', which occurs when one party transfers his ''duties or liabilities'' under a contract to another. A delegation and an assignment can be accomplished at the same time, although a non-assignment clause may also bar delegation.