what is an assignment of construction contract

• Open navigation Close navigation
• Private Office
• Client Area

Expert Insights

Assignment, novation and construction contracts - What is your objective?

Consider a not too hypothetical situation where the parties to a construction project (employer, contractor and sub-contractor) enter into a Deed of Assignment intending that the employer, having lost confidence in the contractor, would directly engage the sub-contractor to complete the sub-contract works. But what if no assignment has taken place? What are the terms of the contract under which the sub-contractor carries out the works for the employer?

Potential risks with assignment

In construction projects, main contractors often assign the benefit of their key sub-contracts to the employer in the event of contractor default and consequent termination of the main contract. The employer can then enforce the rights in the sub-contract against the sub-contractor, including rectification of the works and the performance of particular obligations.

However, there are potential risks associated with assignment in these situations as the Technology and Construction Court’s decision in Energy Works (Hull) Ltd v MW High Tech Projects UK Ltd demonstrated. We discussed this decision in Assigning a sub-contract on termination: which rights is the contractor giving up? In this case, the nature of the assignment meant that the main contractor could not pursue claims made by the employer against its sub-contractor under the sub-contract. This limited the main contractor’s ability to ‘pass on’ any liability it had under the main contract to the sub-contractor.

But what if the Deed of Assignment does not take effect as an assignment?

Assignment v novation

Both assignment and novation are forms of transferring an interest under a contract from one party to another. However, they are very different and in their effect. An assignment transfers the benefit of a contract from one party to another, but only the benefit, not the burden. In contrast, a novation will transfer both the benefit and the burden of a contract from one party to another. A novation creates a new contractual relationship - a ‘new’ contract is entered into.

Another key difference with novation is that the consent of all parties concerned must be obtained, which is why novation is almost always effected through a tripartite agreement. In the case of an assignment, it is not always necessary to obtain consent, subject to what the specific terms of the contract provide.

When deciding whether to assign or novate, parties should consider (i) whether there is in fact a burden to novate, (ii) whether the novatee will be willing to take on the burden, (iii) whether all parties will consent to the novation and indeed enter into the agreement. If there is no burden under the contract to transfer, then an assignment is likely to be the most appropriate way to transfer the interests.

Is the Deed for an assignment or a novation?

Although a document may be labelled a Deed of Assignment, if it has references to the transfer of ‘ responsibilities and obligations ’ and is a tripartite agreement these are characteristic of a novation as opposed to an assignment.

A key issue in such circumstances is to ascertain whether making use of the words ‘ assigning ’ and ‘ assignment ’ actually affects the characteristics of the document.

There has been some consideration of this characterisation issue by the courts. In the case of Burdana v Leeds Teaching Hospitals NHS Trust [2017] EWCA Civ 1980, by majority the Court of Appeal decided that on the facts of the case, although the Deed of Assignment in question referred to an ‘ assignment ’ of the benefit and burden, on proper analysis there was indeed a novation.

Furthermore, in the case of Langston Group Corporation v Cardiff City FC [2008] EWHC 535, Briggs J made it evident that even though the variation agreement in question did not use the word ‘ novation ’ and did not describe itself as such, the circumstances and effect of the agreement was indeed a novation and a new contract had been created.

It may be the case that even if a document does not describe itself as a novation, yet has the key characteristics of one, then as a matter of interpretation the courts would accept that the document takes effect as a novation.

Key characteristics of a novation

If entering into a document that purports to be a Deed of Assignment, tread carefully as it may well take effect as a novation, particularly if the following characteristics are present:

• It is a tripartite agreement;
• All the parties give their consent;
• The novator has been released from its obligations;
• There has been an acceptance of the terms of the novation on the part of the novatee and the substituted party; and
• There is a vesting of remedies.

What is your objective?

Although a document may well be labelled as an assignment, it may have the characteristics of and take effect as novation. Parties need to be cautious and consider what they want to achieve when assessing whether to assign rights or to novate them along with obligations.

This article was written by Anna Sowerby and Eveline Strecker. For more information, please contact Anna  or your usual Charles Russell Speechlys contact.

Our thinking

IBA Annual Conference 2024

Charlotte Ford

Election countdown: the Conservatives and Labour's position on housing

Life Sciences Sector: “Alive and Well”

Lynsey Inglis

Quick Reads

BBC News quotes Nick White on AI washing

In the Press

How Green is Your Arbitration?

Richard Kiddell

Retailers and consumer credit – the need for regular check ups

Richard Ellis

The UK’s first model letter of intent has been updated – has the wait been worth it?

Katherine Keenan

Property Patter: Building and Fire Safety Miniseries - part 3

Michael O'Connor

The Conservative and Labour Manifestos and Renters Reform: Focus on Build to Rent and Student Accommodation

Lauren Fraser

The Levelling Up and Regeneration Act 2023 - a tighter planning enforcement regime

Sadie Pitman

Design Rights and Bright Lights: M&S wins appeal over Aldi's bottle design

Mary Bagnall

Nick Hurley writes for People Management on the Liberal Democrats’ employment law proposals ahead of the General Election

Nick Hurley

Delving into the detail of facade repairs - Estates Gazette Q&A

Sylwia Jatczak

Gaining insights on forfeiture - Estates Gazette Q&A

Emma Preece

Changes to the time limits for enforcement

Titilope Hassan

Briefing Magazine quotes Joe Cohen in an article about process improvement in law

Property Patter: Pre-Election Special

Emma Humphreys

London Property Market Prediction: Where and why are Chinese buyers buying residential properties in London in the next 12 months?

Simon Green

Sarah Jane Boon quoted on the front page of The Times in relation to ONS marriage figures for England and Wales

Sarah Jane Boon

Property Patter: Hotels

Naomi Nettleton

• Assignment Clause

Get free proposals from vetted lawyers in our marketplace.

Contract Clauses

• Acceleration Clause
• Arbitration Clause
• Cancellation Clause
• Choice of Law Clause
• Confidentiality Clause
• Consideration Clause
• Definitions Clause
• Dispute Resolution Clause
• Entire Agreement Clause
• Escalation Clause
• Exclusivity Clause
• Exculpatory Clause
• Force Majeure Clause
• Governing Law Clause
• Indemnification Clause
• Indemnity Clause
• Insurance Clause
• Integration Clause
• Merger Clause
• Non-Competition Clause
• Non-Disparagement Clause
• Non-Exclusivity Clause
• Non-Solicitation Clause
• Privacy Clause
• Release Clause
• Severability Clause
• Subordination Clause
• Subrogation Clause
• Survival Clause
• Termination Clause
• Time of Essence Clause

Jump to Section

Assignment clause defined.

Assignment clauses are legally binding provisions in contracts that give a party the chance to engage in a transfer of ownership or assign their contractual obligations and rights to a different contracting party.

In other words, an assignment clause can reassign contracts to another party. They can commonly be seen in contracts related to business purchases.

Here’s an article about assignment clauses.

Assignment Clause Explained

Assignment contracts are helpful when you need to maintain an ongoing obligation regardless of ownership. Some agreements have limitations or prohibitions on assignments, while other parties can freely enter into them.

Here’s another article about assignment clauses.

Purpose of Assignment Clause

The purpose of assignment clauses is to establish the terms around transferring contractual obligations. The Uniform Commercial Code (UCC) permits the enforceability of assignment clauses.

Assignment Clause Examples

Examples of assignment clauses include:

• Example 1 . A business closing or a change of control occurs
• Example 2 . New services providers taking over existing customer contracts
• Example 3 . Unique real estate obligations transferring to a new property owner as a condition of sale
• Example 4 . Many mergers and acquisitions transactions, such as insurance companies taking over customer policies during a merger

Here’s an article about the different types of assignment clauses.

Assignment Clause Samples

Sample 1 – sales contract.

Assignment; Survival .  Neither party shall assign all or any portion of the Contract without the other party’s prior written consent, which consent shall not be unreasonably withheld; provided, however, that either party may, without such consent, assign this Agreement, in whole or in part, in connection with the transfer or sale of all or substantially all of the assets or business of such Party relating to the product(s) to which this Agreement relates. The Contract shall bind and inure to the benefit of the successors and permitted assigns of the respective parties. Any assignment or transfer not in accordance with this Contract shall be void. In order that the parties may fully exercise their rights and perform their obligations arising under the Contract, any provisions of the Contract that are required to ensure such exercise or performance (including any obligation accrued as of the termination date) shall survive the termination of the Contract.

Reference :

Security Exchange Commission - Edgar Database,  EX-10.29 3 dex1029.htm SALES CONTRACT , Viewed May 10, 2021, <  https://www.sec.gov/Archives/edgar/data/1492426/000119312510226984/dex1029.htm >.

Sample 2 – Purchase and Sale Agreement

Assignment . Purchaser shall not assign this Agreement or any interest therein to any Person, without the prior written consent of Seller, which consent may be withheld in Seller’s sole discretion. Notwithstanding the foregoing, upon prior written notice to Seller, Purchaser may designate any Affiliate as its nominee to receive title to the Property, or assign all of its right, title and interest in this Agreement to any Affiliate of Purchaser by providing written notice to Seller no later than five (5) Business Days prior to the Closing; provided, however, that (a) such Affiliate remains an Affiliate of Purchaser, (b) Purchaser shall not be released from any of its liabilities and obligations under this Agreement by reason of such designation or assignment, (c) such designation or assignment shall not be effective until Purchaser has provided Seller with a fully executed copy of such designation or assignment and assumption instrument, which shall (i) provide that Purchaser and such designee or assignee shall be jointly and severally liable for all liabilities and obligations of Purchaser under this Agreement, (ii) provide that Purchaser and its designee or assignee agree to pay any additional transfer tax as a result of such designation or assignment, (iii) include a representation and warranty in favor of Seller that all representations and warranties made by Purchaser in this Agreement are true and correct with respect to such designee or assignee as of the date of such designation or assignment, and will be true and correct as of the Closing, and (iv) otherwise be in form and substance satisfactory to Seller and (d) such Assignee is approved by Manager as an assignee of the Management Agreement under Article X of the Management Agreement. For purposes of this Section 16.4, “Affiliate” shall include any direct or indirect member or shareholder of the Person in question, in addition to any Person that would be deemed an Affiliate pursuant to the definition of “Affiliate” under Section 1.1 hereof and not by way of limitation of such definition.

Security Exchange Commission - Edgar Database,  EX-10.8 3 dex108.htm PURCHASE AND SALE AGREEMENT , Viewed May 10, 2021, < https://www.sec.gov/Archives/edgar/data/1490985/000119312510160407/dex108.htm >.

Sample 3 – Share Purchase Agreement

Assignment . Neither this Agreement nor any right or obligation hereunder may be assigned by any Party without the prior written consent of the other Parties, and any attempted assignment without the required consents shall be void.

Security Exchange Commission - Edgar Database,  EX-4.12 3 dex412.htm SHARE PURCHASE AGREEMENT , Viewed May 10, 2021, < https://www.sec.gov/Archives/edgar/data/1329394/000119312507148404/dex412.htm >.

Sample 4 – Asset Purchase Agreement

Assignment . This Agreement and any of the rights, interests, or obligations incurred hereunder, in part or as a whole, at any time after the Closing, are freely assignable by Buyer. This Agreement and any of the rights, interests, or obligations incurred hereunder, in part or as a whole, are assignable by Seller only upon the prior written consent of Buyer, which consent shall not be unreasonably withheld. This Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.

Security Exchange Commission - Edgar Database,  EX-2.1 2 dex21.htm ASSET PURCHASE AGREEMENT , Viewed May 10, 2021, < https://www.sec.gov/Archives/edgar/data/1428669/000119312510013625/dex21.htm >.

Sample 5 – Asset Purchase Agreement

Assignment; Binding Effect; Severability

This Agreement may not be assigned by any party hereto without the other party’s written consent; provided, that Buyer may transfer or assign in whole or in part to one or more Buyer Designee its right to purchase all or a portion of the Purchased Assets, but no such transfer or assignment will relieve Buyer of its obligations hereunder. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the successors, legal representatives and permitted assigns of each party hereto. The provisions of this Agreement are severable, and in the event that any one or more provisions are deemed illegal or unenforceable the remaining provisions shall remain in full force and effect unless the deletion of such provision shall cause this Agreement to become materially adverse to either party, in which event the parties shall use reasonable commercial efforts to arrive at an accommodation that best preserves for the parties the benefits and obligations of the offending provision.

Security Exchange Commission - Edgar Database,  EX-2.4 2 dex24.htm ASSET PURCHASE AGREEMENT , Viewed May 10, 2021, < https://www.sec.gov/Archives/edgar/data/1002047/000119312511171858/dex24.htm >.

Common Contracts with Assignment Clauses

Common contracts with assignment clauses include:

• Real estate contracts
• Sales contract
• Asset purchase agreement
• Purchase and sale agreement
• Bill of sale
• Assignment and transaction financing agreement

Assignment Clause FAQs

Assignment clauses are powerful when used correctly. Check out the assignment clause FAQs below to learn more:

What is an assignment clause in real estate?

Assignment clauses in real estate transfer legal obligations from one owner to another party. They also allow house flippers to engage in a contract negotiation with a seller and then assign the real estate to the buyer while collecting a fee for their services. Real estate lawyers assist in the drafting of assignment clauses in real estate transactions.

What does no assignment clause mean?

No assignment clauses prohibit the transfer or assignment of contract obligations from one part to another.

What’s the purpose of the transfer and assignment clause in the purchase agreement?

The purpose of the transfer and assignment clause in the purchase agreement is to protect all involved parties’ rights and ensure that assignments are not to be unreasonably withheld. Contract lawyers can help you avoid legal mistakes when drafting your business contracts’ transfer and assignment clauses.

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

Muhammad Yar L.

Meet some of our Lawyers

Ryan A. Webber focuses his practice primarily on Estate Planning, Elder Law, and Life Care Planning. His clients range from young families concerned about protecting their family as well as aging individuals. Ryan provides Estate Planning, Trust Planning, Special Needs Planning, Public Benefit Planning, and Estate Administration. Ryan focuses on the holistic approach to the practice of elder law which seeks to ensure clients are receiving good care when needed and that they preserve enough assets with which to pay for such care. Many families and individuals also come to Ryan for preparation of their wills, power of attorney, and healthcare guidance documents. Additionally, Ryan assists small and medium sized business owners with their organizational and planning needs. From starting or winding down a business, Ryan provides quality business advice.

Jonathan G.

Small Business Attorney licensed in Texas and Colorado. Based in Dallas, appointments available in DFW area.

A business-oriented, proactive, and problem-solving corporate lawyer with in-house counsel experience, ensuring the legality of commercial transactions and contracts. Michael is adept in reviewing, drafting, negotiating, and generally overseeing policies, procedures, handbooks, corporate documents, and more importantly, contracts. He has a proven track record of helping lead domestic and international companies by ensuring they are functioning in complete compliance with local and international rules and regulations.

I help start-ups, small businesses, and people realize their potential by leveraging my legal and technological experience. Legally skilled in employment law, intellectual property, corporate law, and real estate transactions.

I am an attorney with six years of experience drafting and negotiating a wide variety of business contracts, in industries including technology and software, finance, professional services, hospitality, and non-profits.

Attorney Joshua K. S. Cali is a respected business, estate planning, and real estate attorney based in Ashland serving Middlesex County and other nearby areas. Joshua graduated summa cum laude from Bentley University in Waltham, MA, and from UCLA School of Law in Los Angeles. Before starting his own firm, Joshua practiced estate planning for high net worth clients at a boutique law firm in San Diego, CA.

Find the best lawyer for your project

Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

CONTRACT lawyers by city

• Atlanta Contract Lawyers
• Austin Contract Lawyers
• Boston Contract Lawyers
• Chicago Contract Lawyers
• Dallas Contract Lawyers
• Denver Contract Lawyers
• Fort Lauderdale Contract Lawyers
• Houston Contract Lawyers
• Las Vegas Contract Lawyers
• Los Angeles Contract Lawyers
• Memphis Contract Lawyers
• Miami Contract Lawyers
• New York Contract Lawyers
• Oklahoma City Contract Lawyers
• Orlando Contract Lawyers
• Philadelphia Contract Lawyers
• Phoenix Contract Lawyers
• Richmond Contract Lawyers
• Salt Lake City Contract Lawyers
• San Antonio Contract Lawyers
• San Diego Contract Lawyers
• San Francisco Contract Lawyers
• Seattle Contract Lawyers
• Tampa Contract Lawyers

Contracts Counsel was incredibly helpful and easy to use. I submitted a project for a lawyer's help within a day I had received over 6 proposals from qualified lawyers. I submitted a bid that works best for my business and we went forward with the project.

I never knew how difficult it was to obtain representation or a lawyer, and ContractsCounsel was EXACTLY the type of service I was hoping for when I was in a pinch. Working with their service was efficient, effective and made me feel in control. Thank you so much and should I ever need attorney services down the road, I'll certainly be a repeat customer.

I got 5 bids within 24h of posting my project. I choose the person who provided the most detailed and relevant intro letter, highlighting their experience relevant to my project. I am very satisfied with the outcome and quality of the two agreements that were produced, they actually far exceed my expectations.

How It Works

Post Your Project

Get Free Bids to Compare

Hire Your Lawyer

Find lawyers and attorneys by city

Search for:

Jump straight to:

Please enter a search term

What sectors are you interested in?

We can use your selection to show you more of the content that you’re interested in.

Sign-up and we’ll remember your preferences

Sign-up to follow topics, sectors, people and also have the option to receive a weekly update of lastest news across your areas of interest.

Got an account already? Sign in

Want to speak to an advisor from your closest office?

Out-law / your daily need-to-know.

Out-Law Guide 4 min. read

Assignment and novation

19 Aug 2011, 4:40 pm

Assignment involves the transfer of an interest or benefit from one person to another. However the 'burden', or obligations, under a contract cannot be transferred.

Assignment in construction contracts

As noted above only the benefits of a contract can be assigned - not the burden. In the context of a building contract:

• the employer may assign its right to have the works constructed, and its right to sue the contractor in the event that the works are defective – but not its obligation to pay for the works;
• the contractor may assign its right to payment of the contract sum - but not its obligation to construct the works in accordance with the building contract or its obligation to meet any valid claims, for example for defects.

After assignment, the assignee is entitled to the benefit of the contract and to bring proceedings against the other contracting party to enforce its rights. The assignor still owes obligations to the other contracting party, and will remain liable to perform any part of the contract that still has to be fulfilled since the burden cannot be assigned. In practice, what usually happens is that the assignee takes over the performance of the contract with effect from assignment and the assignor will generally ask to be indemnified against any breach or failure to perform by the assignee.  The assignor will remain liable for any past liabilities incurred before the assignment.

In construction contracts, the issue of assignment often arises in looking at whether collateral warranties granted to parties outside of the main construction contract can be assigned.

Funders may require the developer to assign contractual rights against the contractor and the design team as security to the funder, as well as the benefit of performance bonds and parent company guarantees. The developer may assign such rights to the purchaser either during or after completion of the construction phase.

Contractual assignment provisions

Many contracts exclude or qualify the right to assignment, and the courts have confirmed that a clause which provides that a party to a contract may not assign the benefit of that contract without the consent of the other party is legally effective and will extend to all rights and benefits arising under the contract, including the right to any remedies. Other common qualifications on the right to assign include:

• a restriction on assignment without the consent of the other party, whether or not such consent is not to be unreasonably withheld or delayed;
• only one of the parties may assign;
• only certain rights may be assigned – for example, warranties and indemnities may be excluded;
• a limit on the number of assignments - as is almost always the case in respect of collateral warranties;
• a right to assign only to a named assignee or class of assignee.

Note that in some agreements where there is a prohibition on assignment, it is sometimes possible to find the reservation of specific rights to create a trust or establish security over the subject matter of the agreement instead.

Legal and equitable assignment

The Law of Property Act creates the ability to legally assign a debt or any other chose in action where the debtor, trustee or other relevant person is notified in writing. If the assignment complied with the formalities in the Act it is a legal assignment, otherwise it will be an equitable assignment.

Some transfers can only take effect as an equitable assignment, for example:

• an oral assignment;
• an assignment by way of charge;
• an assignment of only part of the chosen in action;
• an assignment of which notice has not been given to the debtor;
• an agreement to assign.

If the assignment is equitable rather than legal, the assignor cannot enforce the assigned property in its own name and to do so must join the assignee in any action. This is designed to protect the debtor from later proceedings brought by the assignor or another assignee from enforcing the action without notice of the earlier assignment.

Security assignments

Using assignment as a way of taking security requires special care, as follows:

• if the assignment is by way of charge, the assignor retains the right to sue for any loss it suffers caused by a breach of the other contract party;
• if there is an outright assignment coupled with an entitlement to a re-assignment back once the secured obligation has been performed, it is an assignment by way of legal mortgage.

Please see our separate Out-Law guide for more information on types of security.

Restrictions on assignment

There are restrictions on the assignment of certain types of interest on public policy grounds, as follows:

• certain personal contracts – for example, a contract for the employment of a personal servant or for the benefit of a motor insurance policy cannot be assigned;
• a bare cause of action or 'right to sue' where the assignee has no commercial interest in the subject matter of the underlying transaction cannot be assigned;
• certain rights conferred by statute – for example, a liquidator's powers to bring wrongful trading proceedings against a director – cannot be assigned;
• an assignment of a contract may not necessarily transfer the benefit of an arbitration agreement contained in the contract;
• the assignment of certain rights is regulated – for example, the assignment of company shares or copyright.

If you want to transfer the burden of a contract as well as the benefits under it, you have to novate. Like assignment, novation transfers the benefits under a contract but unlike assignment, novation transfers the burden under a contract as well.

In a novation the original contract is extinguished and is replaced by a new one in which a third party takes up rights and obligations which duplicate those of one of the original parties to the contract. Novation does not cancel past rights and obligations under the original contract, although the parties can agree to novate these as well.

Novation is only possible with the consent of the original contracting parties as well as the new party. Consideration (the 'price' paid, whether financial or otherwise, by the new party in return for the contract being novated to it) must be provided for this new contract unless the novation is documented in a deed signed by all three parties.

• Construction Contracts
• Construction
• Government and public sector
• Real Estate
• Technology, Science & Industry
• United Kingdom

Contact an adviser

Graham Alty

Latest News

Businesses urged to review ai policies as ireland prepares to implement eu ai act, pensions ombudsman decisions offer reassurance around risks of providing online systems, further scottish short-term let amendments needed to lessen regulatory burdens, german federal court decides on ‘clawback’ risks for lenders, ecofin fails to reach agreement on vida vat reporting package, don't miss a thing.

Sign-up to receive the latest news, analysis and events direct to your e-mail inbox

You might also like

Out-Law News

European Commission sets out plans for future connectivity

The European Commission has set out plans to improve telecommunications and digital infrastructure across the bloc in the coming years, starting with the next legislative term.

UK Budget 2024: general election battle lines become clearer

The UK chancellor Jeremy Hunt’s Budget speech on Wednesday, and the response of Labour leader Sir Keir Starmer to it, provide an insight into how the forthcoming UK general election campaign will be fought, an expert in public policy has said.

UK announces Energy Charter Treaty withdrawal, citing need to focus on net zero strategy

The UK has announced that it will leave the Energy Charter Treaty (ECT), due to what it described as the failure of efforts to align the Treaty with its net zero commitments.

UK government plans to revamp holiday pay calculation for part-year workers

Out-Law Analysis

Pensions disputes: managing member expectations paramount

UK subsidy control post-Brexit: access to effective judicial remedies

'Steps of court' settlement was not negligent, court rules

'Vast majority' of companies not seeking to avoid tax

'World first' industrial decarbonisation strategy developed in the UK

3D printing: UK product safety issues

5G potential for business highlighted in UK funding programme

Sectors and what we do

Sectors we work in.

• Financial Services
• Infrastructure
• Your assets
• Your company
• Your finance
• Your legal team and resource
• Your people
• Your risks and regulatory environment

Your privacy matters to us

We use cookies that are essential for our site to work. To improve our site, we would like to use additional cookies to help us understand how visitors use it, measure traffic to our site from social media platforms and to personalise your experience. Some of the cookies that we use are provided by third parties. To accept all cookies click ‘accept all’. To reject all optional cookies click ‘reject all’. To choose which optional cookies to allow click ‘cookie settings’. This tool uses a cookie to remember your choices. Please visit our cookie policy for more information.

Choose Your Legal Category:

• Online Law Library
•   Bankruptcy Law
•   Business Law
•   Civil Law
•   Criminal Law
•   Employment Law
•   Family Law
•   Finance Law
•   Government Law
•   Immigration Law
•   Insurance Law
•   Intellectual Property Law
•   Personal Injury Law
•   Products & Services Law
•   Real Estate Law
•   Wills, Trusts & Estates Law
•   Attorney Referral Services
•   Top 10 Most Popular Articles
•   Legal Dictionary
• How It Works - Clients
• Legal Center
• About LegalMatch
• Consumer Satisfaction
• Editorial Policy
• Attorneys Market Your Law Practice Attorney Login Schedule a Demo Now Did LegalMatch Call You Recently? How It Works - Attorneys Attorney Resources Attorney Success Stories Attorney Success Story Videos Compare Legal Marketing Services Cases Heatmap View Cases
• Find a Lawyer
• Legal Topics
• Contract Law

Contract Assignments

(This may not be the same place you live)

  What is a Contract Assignment?

In a contract assignment, one of the two parties to a contract may transfer their right to the other’s performance to a third party. This is known as “contract assignment.” Generally, all rights under a contract may be assigned. A provision in the contract that states the contract may not be assigned usually refers to the delegation of the assignor’s (person who assigns) duties under that contract, not their rights under the contract. 

In modern law, the phrase “assignment of contract” usually means assignment of both rights and duties under a contract.

Who are the Various Parties Involved in a Contract Assignment?

How is a contract assignment created, when is a contract assignment prohibited, which parties are liable to each other in a contract assignment, are there issues with multiple assignments, should i hire a lawyer for contract assignments.

In a contract, there are two parties to the agreement, X and Y. The parties may agree to let X assign X’s rights to a third party . Once the third party enters the picture, each party has a special name. For instance, suppose X, a seller of bookmarks, contracts with Y, a purchaser of bookmarks. Y desires to have Y’s right to X’s performance (the sale of bookmarks on a monthly basis) to another person. 

This third person, Z, is called the assignee. X is called the obligor , and Y is called the assignor , since Y has assigned its right to X’s performance . X, the obligor, is obligated to continue to perform its duties under the agreement.

There are no “magic words” needed to create an assignment. The law simply requires that the would-be assignor have an intent to immediately and completely transfer their rights in the agreement. In addition, writing is typically not required to create an assignment. As long as X and Y both adequately understand what right is being assigned, an assignment is created. 

Words that indicate a transfer is to take place suffice, such as “I intend to transfer my rights under this agreement,” or, “I intend to give my rights to Z,” or “I intend to confer an assignment on Z.” In addition,consideration,which is a bargained-for exchange required for a contract to be valid, is not required for assignment.

In certain instances, an assignment of contract rights can be prohibited. If the contract contains a clause prohibiting assignment of “the contract,” without specifying more, the law construes this language as barring only delegation of the assignor’s duties, not their rights. If the assignment language states “assignment of contractual rights are prohibited,” the obligor may sue for damages if the assignor attempts to assign the agreement. If the contract language states that attempts to assign “will be void,” the parties can bar assignment.of rights.

Under modern contract law, the phrase “I assign the contract” is usually interpreted to mean that one is assigning rights and duties. What is an assignment of duties? An assignment of duties occurs where Y, called the obligor or delegator, promises to perform for X, the obligee. Y then delegates their duty to perform to Z, the delegate. Under the law, most duties can be delegated. 

There are exceptions to this rule. Delegation can be prohibited when:

• The duties to be performed involve personal judgment and special skill (e.g., a portrait, creation of a custom-made dress). 
• “Personal judgment” is the exercise of some kind of superior judgment when it comes to determining how, when, or where to do something. Examples of individuals who exercise personal judgment include talent scouts and financial advisors.  Special skill is the unique ability to create a good or perform a service. A delegator can be prohibited from delegating duties when it is that specific delegator’s services are sought. For example, if the services of a specific famous chef are sought, and the original agreement was entered into on the understanding that the chef was hired for their specific talent, the delegator may not delegate the services;
• The assignment fundamentally changes risks or responsibilities under the agreement;
• The assignment is over future rights associated with a future contract that does not currently exist;
• Delegation would increase the obligation of the obligee. For example, if a shoe manufacturer contracts to deliver soles to a store in the same town as the shoe factory, the other party cannot assign the delivery to a different store in another state. Doing so would impose a greater obligation on the obligee than was originally contemplated;
• The obligee had placed special trust in the delegator. For example, assume that you have hired a patent attorney, based on that attorney’s significant skill and expertise, to obtain a valuable patent. You have placed special trust in this person, hiring them instead of other patent attorneys, because of their unique expertise. In such a situation, the attorney may not delegate his duties to another attorney (delegate), since the attorney was hired because of one person’s special capabilities;
• The delegation is of a promise to repay a debt; or
• The contract itself restricts or prohibits delegation. If the contract states, “any attempt to delegate duties under this contract is void,” a delegation will not be permitted.

In a contract involving assignment of rights, the assignee may sue the obligor. This is because the assignee, once the assignee has been assigned rights, is entitled to performance under the contract. If the obligor had a defense that existed in the original contract between obligor and assignor, the obligor may assert that defense against the assignee. Examples of such defenses include the original contract was not valid because of lack of consideration, or because there was never a valid offer or acceptance).

An assignee may also sue an assignor. Generally, if an assignment is made for consideration,it is irrevocable. Assignments not made for consideration, but under which an obligor has already performed, are also irrevocable. If an assignor attempts to revoke an irrevocable assignment,the assignee may sue for “wrongful revocation.” 

In circumstances involving delegation of duties,an obligee must accept performance from the delegate of all duties that may be delegated. The delegator remains liable on the agreement. Therefore, the obligee may sue the delegator for nonperformance by the delegate. The obligee may sue the delegate for nonperformance, but can only require the delegate to perform if there has been an assumption by the delegate. An assumption by the delegate is a promise that the delegate will perform the delegated duty, which promise is supported by consideration. 

Assignments that are not supported by consideration are revocable. If an initial assignment is revocable, a subsequent assignment can revoke it. If a first assignment is irrevocable, because consideration was present,the first assignment will usually prevail over a subsequent assignment. This means the person who can claim the assignment was first made to them will prevail over someone who claims a subsequent assignment. 

If, however, the second person paid value for the assignment, and entered into the assignment without knowing of the first assignment, the “subsequent”assignee is entitled to proceeds the first judgment against the obligor (the original party who still must perform), in the event such a judgment is issued,

If you have an issue with assignment of rights or duties under a contract, you should contact a contract lawyer  for advice. An experienced business lawyer near you can review the facts of your case, advise you of your rights, and represent you in court proceedings.

Save Time and Money - Speak With a Lawyer Right Away

• Buy one 30-minute consultation call or subscribe for unlimited calls
• Subscription includes access to unlimited consultation calls at a reduced price
• Receive quick expert feedback or review your DIY legal documents
• Have peace of mind without a long wait or industry standard retainer
• Get the right guidance - Schedule a call with a lawyer today!

Need a Contract Lawyer in your Area?

• Connecticut
• Massachusetts
• Mississippi
• New Hampshire
• North Carolina
• North Dakota
• Pennsylvania
• Rhode Island
• South Carolina
• South Dakota
• West Virginia

Daniel Lebovic

LegalMatch Legal Writer

Original Author

Prior to joining LegalMatch, Daniel worked as a legal editor for a large HR Compliance firm, focusing on employer compliance in numerous areas of the law including workplace safety law, health care law, wage and hour law, and cybersecurity. Prior to that, Daniel served as a litigator for several small law firms, handling a diverse caseload that included cases in Real Estate Law (property ownership rights, residential landlord/tenant disputes, foreclosures), Employment Law (minimum wage and overtime claims, discrimination, workers’ compensation, labor-management relations), Construction Law, and Commercial Law (consumer protection law and contracts). Daniel holds a J.D. from the Emory University School of Law and a B.S. in Biological Sciences from Cornell University. He is admitted to practice law in the State of New York and before the State Bar of Georgia. Daniel is also admitted to practice before the United States Courts of Appeals for both the 2nd and 11th Circuits. You can learn more about Daniel by checking out his Linkedin profile and his personal page. Read More

Related Articles

• Acceleration Clause Lawyers
• What is Rescission of Contract?
• When Is a Contract Considered Void or Voidable?
• Illegal Contract Lawyers
• Nominal Damages in a Contracts Claim
• Breach of Contract Defense: Laches
• Breach of Contract Defenses: Unclean Hands
• Material Breach of Contract and Lawsuits
• Breaching vs. Non-Breaching Parties in a Contract
• What is a Contract?
• Fraudulent Inducement
• Contract Law: Fraud Cases
• Limitation of Liability Clauses in Construction Contracts
• Homeowners Hiring Unlicensed Contractors
• Business Licenses for Independent Contractors
• State Statute of Limitations for a Breach of Contract Action
• Email Contracts
• Employer Liability for Wage Violations of Subcontractors
• Employee or Independent Contractor?
• Tax Requirements for Independent Contractors
• Statutory Damages in Breach of Contract Cases
• Hiring an Independent Contractor
• Attorney's Fees in Breach of Contract Cases
• What Is the Proper Court for a Breach of Contract Lawsuit?
• Exclusive Dealing Contracts
• Defenses to Breach of Employment Contract
• Real Estate Contracts: Exclusive Right to Sell
• Exculpatory Clauses
• Exterminators Breach of Contract Liability
• Negligent Misrepresentation

Discover the Trustworthy LegalMatch Advantage

• No fee to present your case
• Choose from lawyers in your area
• A 100% confidential service

How does LegalMatch work?

Law Library Disclaimer

16 people have successfully posted their cases

Assignment Of Contracts: Everything You Need to Know

Assignment of contracts is the legal transfer of the obligations and benefits of a contract from one party, called the assignor, to another, called the assignee. 3 min read updated on January 01, 2024

What Is Assignment of Contracts ?

Assignment of contracts is the legal transfer of the obligations and benefits of a contract from one party, called the assignor, to another, called the assignee. The assignor must properly notify the assignee so that he or she can take over the contractual rights and obligations. This can be done using a document called an assignment agreement, which allows you to protect your legal rights while transferring the contract.

An assignment agreement is appropriate for your needs if the following are true:

• You want to transfer your contractual rights, responsibilities, and obligations to another individual or company.
• You or your business is taking over a contract from another person or business.

The assignment agreement includes the names of the assignor and assignee, the name of the other party to the contract in question (known as the obligor ), the contract's title and expiration date, whether the obligor needs to consent to the rights transfer based on the original terms of the contract, when the obligor consented, when the assignment agreement takes effect, and what state will govern the transferred contract. The assignment agreement may also be called the contract assignment , assignment contract, or assignment of contract.

While assignment contracts are typically only used for amounts of less than $5,000, you can assign a higher profit contract when both the buyer and seller agree. You cannot assign a contract if the original contract prohibits doing so. 

If you are assigning a contract, you may want to ask the obligor to sign a release, or waiver, agreement that releases you from contract liability . In addition to transferring rights and obligations, you can also use an assignment agreement to transfer an income stream to an assignee. However, when transferring rights to intellectual or personal property, it's best to instead use a trademark assignment, bill of sale, or assignment of trade name.

How Do Assignments Work?

The procedure for assigning a contract depends on the language of that contract. For example, some contracts may disallow assignment, while others may allow it only when the obligor consents.  In some cases, the assignor is not relieved of contract liability. This occurs when the original contract has a clause that guarantees performance regardless of assignment.

If you want to buy a contract, look for sellers in newspaper ads, online marketing, and direct mail. In most cases, it makes the most sense to use multiple strategies. For real estate contracts , make sure you conduct a title search on the property in question to make sure there are no liens. You can hire a title company or real estate attorney to ensure that a title is clean before signing an assignment contract.

After you sign the assignment contract, you have interest in the property and can sell it to an end buyer. Market the property through a dedicated website. Once you find a potential buyer, require an earnest money deposit. This is nonrefundable and allows you to make a profit whether or not the deal is successfully completed. If the deal is completed, the end buyer wires funds to cover the sale price of the property along with your stated fee. 

In some cases, you can make a profit just by referring a buyer to an appropriate property and taking a finder's fee. With this strategy, you assign your rights to the buyer, allowing them to close on the property, after which you receive your fee. This is a low-risk endeavor if you have detailed information on exactly what each buyer is looking for. You'll also need to  have the resources to locate great properties before they hit the market. With those two components, you'll be able to make money as a real estate investor without risking your own capital. You can also close on the property yourself and immediately flip it to another investor.

When Are Assignments Not Enforced?

An assignment  agreement is not enforced if the original contract contains a clause that prohibits assignment. If performance is affected, value is decreased, or risk is increased for the obligor, few courts will enforce the assignment. These circumstances are referred to as a material alteration in the contract.

Contract assignments are also prohibited by some state laws. In many states, an employee is prohibited from assigning future wages. Certain claims against the federal government are also prohibited from an assignment. Some assignments violate public policy rather than law, such as assignment of personal injury claims. This is not allowed because it could encourage litigation.

If you need help with assignment of a contract you can  post your job  on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

Hire the top business lawyers and save up to 60% on legal fees

Content Approved by UpCounsel

• Assignment of Rights Example
• Assignment Contract Law
• Assignment of Rights and Obligations Under a Contract
• Assignment Law
• Legal Assignment
• What Is the Definition of Assigns
• Partial Assignment of Contract
• Assignment Legal Definition
• Assignment of Contract Rights
• Consent to Assignment

• Shareholder and Partnership Disputes
• Commercial Contract Disputes
• Statutory Demands
• Restrictive Covenants
• Injunctions
• Restore a Dissolved Company
• Civil Fraud Solicitor
• Intellectual Property Disputes
• Retention Recovery
• Investment Disputes
• Residential Possession
• Breach of Lease Issues
• Deposit Protection
• Rent Arrears Recovery for Residential Properties
• Disrepair Claims
• Ongoing Disputes and Litigation
• Section 8 Notice
• Section 21 Notice
• Using a Bailiff
• Freehold & Leasehold Advice
• Sales, Ownership & Investor Disputes
• Collective Investment Schemes
• Service Charge Disputes
• Building, Development and Construction Disputes
• Final Account Recovery
• Adjudication
• Construction Dispute Resolution
• Construction Contract Advice
• Interim Application Payment Recovery
• HR Retainer
• Employment Contract
• Employment Tribunal Claims
• Settlement and Compromise Agreements
• Employment Redundancy
• Disciplinary & Grievance Procedures
• Managing Sick Leave
• Fixed Price Service
• Agreed Monthly Fee Retainer
• No Win No Fee
• Residential Possession Fixed Fees
• Adjudication Costs

What is Assignment in Construction Contracts?

A legal assignment is transferring an interest from one party, called the assignor, to another, the assignee. An assignment entitles the assignee to the performance of a particular contractual obligation conferring a benefit. It’s not usually possible to assign burdens, obligations or debts under a construction contract.

An example of the assignment of a benefit in a construction contract is transferring a collateral warranty to the tenant or purchaser of a building either during construction or after completion. 

An employer can assign their right to have the building constructed and the subsequent right to sue the contractor if the works are not up to standard or delayed. Sometimes, financial investors want the developer to assign contractual rights as security for their investment.

To be legally valid, an assignment must satisfy the requirements of Section 136 of the Law of Property Act 1925. An assignment that doesn’t comply can still be effective as an equitable assignment, but it is harder to prove.

• Parties to construction contracts can only assign benefits and not obligations

• An assignment should comply with the provisions of Section 136 of the Law of Property Act 1925

• A construction contract may contain restrictions on the right to assign, so only permitting the assignment of certain rights or a limit on the number of assignments

Related FAQs

Request a call back.

They also tell us most solicitors are hard to get hold of whereas we’re happy to listen. The reason for this is that we value long term relationships and we’re happy to speak with business people, to invest our time in understanding your business and whatever your concerns are. Only at that point can we understand whether we’re the right people to help you.

Privacy Overview

Understanding an assignment and assumption agreement

Need to assign your rights and duties under a contract? Learn more about the basics of an assignment and assumption agreement.

Get your assignment of agreement

by   Belle Wong, J.D.

Belle Wong, is a freelance writer specializing in small business, personal finance, banking, and tech/SAAS. She ...

Read more...

Updated on: November 24, 2023 · 3 min read

The assignment and assumption agreement

The basics of assignment and assumption, filling in the assignment and assumption agreement.

While every business should try its best to meet its contractual obligations, changes in circumstance can happen that could necessitate transferring your rights and duties under a contract to another party who would be better able to meet those obligations.

If you find yourself in such a situation, and your contract provides for the possibility of assignment, an assignment and assumption agreement can be a good option for preserving your relationship with the party you initially contracted with, while at the same time enabling you to pass on your contractual rights and duties to a third party.

An assignment and assumption agreement is used after a contract is signed, in order to transfer one of the contracting party's rights and obligations to a third party who was not originally a party to the contract. The party making the assignment is called the assignor, while the third party accepting the assignment is known as the assignee.

In order for an assignment and assumption agreement to be valid, the following criteria need to be met:

• The initial contract must provide for the possibility of assignment by one of the initial contracting parties.
• The assignor must agree to assign their rights and duties under the contract to the assignee.
• The assignee must agree to accept, or "assume," those contractual rights and duties.
• The other party to the initial contract must consent to the transfer of rights and obligations to the assignee.

A standard assignment and assumption contract is often a good starting point if you need to enter into an assignment and assumption agreement. However, for more complex situations, such as an assignment and amendment agreement in which several of the initial contract terms will be modified, or where only some, but not all, rights and duties will be assigned, it's a good idea to retain the services of an attorney who can help you draft an agreement that will meet all your needs.

When you're ready to enter into an assignment and assumption agreement, it's a good idea to have a firm grasp of the basics of assignment:

• First, carefully read and understand the assignment and assumption provision in the initial contract. Contracts vary widely in their language on this topic, and each contract will have specific criteria that must be met in order for a valid assignment of rights to take place.
• All parties to the agreement should carefully review the document to make sure they each know what they're agreeing to, and to help ensure that all important terms and conditions have been addressed in the agreement.
• Until the agreement is signed by all the parties involved, the assignor will still be obligated for all responsibilities stated in the initial contract. If you are the assignor, you need to ensure that you continue with business as usual until the assignment and assumption agreement has been properly executed.

Unless you're dealing with a complex assignment situation, working with a template often is a good way to begin drafting an assignment and assumption agreement that will meet your needs. Generally speaking, your agreement should include the following information:

• Identification of the existing agreement, including details such as the date it was signed and the parties involved, and the parties' rights to assign under this initial agreement
• The effective date of the assignment and assumption agreement
• Identification of the party making the assignment (the assignor), and a statement of their desire to assign their rights under the initial contract
• Identification of the third party accepting the assignment (the assignee), and a statement of their acceptance of the assignment
• Identification of the other initial party to the contract, and a statement of their consent to the assignment and assumption agreement
• A section stating that the initial contract is continued; meaning, that, other than the change to the parties involved, all terms and conditions in the original contract stay the same

In addition to these sections that are specific to an assignment and assumption agreement, your contract should also include standard contract language, such as clauses about indemnification, future amendments, and governing law.

Sometimes circumstances change, and as a business owner you may find yourself needing to assign your rights and duties under a contract to another party. A properly drafted assignment and assumption agreement can help you make the transfer smoothly while, at the same time, preserving the cordiality of your initial business relationship under the original contract.

You may also like

What does 'inc.' mean in a company name?

'Inc.' in a company name means the business is incorporated, but what does that entail, exactly? Here's everything you need to know about incorporating your business.

October 9, 2023 · 10min read

How to write a will: A comprehensive guide to will writing

Writing a will is one of the most important things you can do for yourself and for your loved ones, and it can be done in just minutes. Are you ready to get started?

May 20, 2024 · 11min read

How to Start an LLC in 7 Easy Steps (2024 Guide)

2024 is one of the best years ever to start an LLC, and you can create yours in only a few steps.

June 17, 2024 · 22min read

The Contractor’s Consent – A Trap for the Unwary

On private construction projects, the lender often requires that the owner/borrower obtain the written consent of the contractor to the collateral assignment of the construction contract by the owner to the lender. This permits the lender to step into the owner’s shoes with respect to the construction contract in the event of the owner’s default under the project loan documents. Unfortunately, the Consent forms developed by most lenders these days have many more serious implications for contractors.

Although the general form of the Consent is similar among lenders, the forms are becoming increasingly customized and include many terms other than just the consent to assignment. Whenever faced with such a document, a contractor must be alert and should watch for the following:

Notice of Default/Termination The Consent may require that the contractor provide written notice to the lender if there has been any default by the owner under the construction contract or if the contractor wishes to terminate the construction contract. If the contractor forgets (in the heat of the battle) to provide notice to the lender, it may render the declaration of default or termination ineffective. Failure to provide notice would also certainly impair any rights the contractor may wish to assert against the lender.

Change Order Approval Most lenders’ Consent forms require the contractor to obtain prior written approval of the lender to any change orders between the contractor and the owner. Given the lender’s responsiveness, at the very least this is an administrative annoyance, but at its worst, this is a detail that could impact the Project schedule or disrupt the contractor’s negotiations with the owner. Contractors should seek to eliminate this requirement in its entirety, but failing that, should limit its applicability to only change orders over a stated dollar amount.

Assignment Once a lender takes over a project from a defaulting owner, it may seek to assign the lender’s rights in the construction contract to a new entity. It will want to make that assignment without the contractor’s consent and will typically include a provision in the Consent form allowing it to do so. Contractors should be wary of these clauses and insist that no assignment can be made without the contractor’s prior written consent.

Mechanics’ Lien Rights Most lenders include in their Consent forms a provision in which the contractor either waives its mechanics’ lien rights on the Project or subordinates its mechanics’ lien rights to the lender’s mortgage rights. In Minnesota, we have a statute (Minn. Stat. § 337.10, Subd. 2) that may make a prepayment lien waiver unenforceable, but it is not settled whether it makes a lien subordination unenforceable. Although such subordination clauses seem unfair, especially considering that the lender likely has a title insurer insuring its priority, lenders will resist the well-advised efforts by contractors to remove the subordination provision.

Payment Upon Takeover One of the primary purposes of the Contractor’s Consent is to ensure that, if there is a default and the lender must take over an uncompleted Project, the contractor will complete the Project for the lender according to the terms of the construction contract. The typical form logically requires the lender to pay the contractor going forward from the time of lender takeover. Most forms, however, do not obligate the lender to pay the contractor any amounts unpaid at the time of takeover. This should not be acceptable to any contractor – especially one that has been required to subordinate its mechanics’ lien rights to the lender’s mortgage.

Lenders have lately been more sensitive to contractors’ concerns and have been willing to agree to cure pre-takeover defaults (including payment defaults) in addition to paying post-takeover costs. This is certainly something to be negotiated by the contractor at the time it is being asked to sign a consent form.

Conclusion Do not take the Contractor’s Consent lightly. Rarely should you accept the standard form you receive from the lender. Make it fair and protect your rights.

• Contact sales

Start free trial

Types of Construction Contracts: Pros, Cons & Best Practices

Table of Contents

What is a construction contract, who is involved in construction contracts, types of construction contracts, what should be included in a construction contract, construction contracts best practices, what to avoid when writing construction contracts.

• ProjectManager & Construction Contracts

Related Construction Project Management Content

In simple terms, construction contracts are legally binding agreements that explain the work that a general contractor will perform and the payment that a project owner will make. These contracts play a key role in construction management .

However, construction projects vary greatly in terms of complexity and size, so there’s not a one-size-fits-all approach when it comes to construction contracts. That’s why several types of construction contracts have been developed, such as lump sum, cost-plus, time & materials (TM) and unit pricing contracts.

Whichever type you use, ProjectManager is project management software that can help you manage your construction contracts. ProjectManager’s online kanban boards help you track the status of your organization’s construction contracts in one place, which is ideal for construction firms or contractors who have multiple contracts with owners and subcontractors alike.

Create kanban columns to track each step in the process of creating your construction contracts such as “drafted, in review, signed.” You may create any columns you need to fit the needs of your organization. ProjectManager’s kanban boards also allow you to communicate with your team, share files and store your construction documents. Get started today for free.

Why Is a Construction Contract Necessary?

Construction contracts protect both parties in the agreement. These construction administration documents detail what work will be completed, when it’ll be completed and how much it’ll cost. They also outline methods of communication and how disputes will be handled if they arise.

By including information about communication and changes, construction contracts streamline the decision-making process. Ideally, project risks have been anticipated and the contract outlines how best to proceed. A construction contract is, first and foremost, an agreement, but it serves as a roadmap of sorts as well.

Construction contracts involve two parties; owners and contractors. Owners need a job outsourced and the contractor executes the job. The two parties work together to draw up a contract and agree on the terms of completion and payment.

Owners contract builders when they need to execute a specialized job they cannot perform on their own. They may also contract builders when the scale of the project is too large for them alone. Construction projects, in particular, often require owners to hire several different contractors. In this case, thorough construction contracts are crucial to successful project management.

Because construction projects take many forms, different projects require contracts with different characteristics. All types of construction contracts define a timeline, budget, quality requirements and other aspects that need to be defined in every construction project. The two main differences between these types of construction contracts are how the disbursement will be made and the risks and rewards that each party assumes.

Before creating a construction contract, it’s important to know the type of contract that best suits your needs.

Lump-Sum Contract

A lump-sum contract (also called a fixed price contract ) names a total price for the entire job. This price accounts for all time and materials regardless of changes or issues. This type of contract protects owners against unforeseen changes and setbacks.

Lump-sum contracts can seem as though they favor the owner over the contractor, but there are ways to balance the scales. Many contractors charge an additional percentage for signing lump sum contracts, as they’ll be taking a higher risk. Additionally, incentive programs are often put in place by owners to reward jobs being completed early.

Cost-Plus Contract

Cost-plus contracts are made of two parts: a predetermined fee and accumulated costs. This fee is the agreed price owners will pay contractors. It can be a dollar amount, a percentage of the total project cost or another form of payment. The defining characteristic of a cost-plus contract is it reports expenses as they occur rather than deducting costs from a set budget.

A cost-plus contract is used when construction project expenses are uncertain. While this can seem like a liability, cost-plus contracts often include incentives for coming in under budget and set caps on expenditures. This avoids conflict and ensures contractors are paid a fair overhead.

Time and Materials Contract

Time and materials contracts are a fitting choice when the scope of a project is completely unknown. In this case, contractors charge an hourly rate for labor and for materials as needed. Because this leaves uncertainty, these contracts must be specific and prepare for almost anything. An owner should include incentives for construction projects completed ahead of schedule and/or under budget.

A time and materials contract is a good choice for small projects as they require close supervision. For example, all costs must be carefully monitored and classified to document them and ensure contracts are followed. As you can imagine, this becomes increasingly difficult the larger the project. The advantage of choosing a time and materials contract is it protects owners from overpaying contractors.

Get your free

RFP Template

Use this free RFP Template for Word to manage your projects better.

Unit Price Contract

A unit pricing contract is used when an owner wishes to buy a large quantity of a certain product. Each product is a unit and costs a set price. These items can also often be charged in bulk quantities for a reduced price.

Unit pricing contracts are advantageous when an owner knows exactly how much of a specific product they need, such as when a bill of quantities has been drafted or a material takeoff has been done. Using this type of contract and buying all the units at once is also a good way to protect against potential future inflation of material prices. By buying all of the items at once, owners generally pay less than they would in the future and don’t have to worry about drawing up future contracts.

Design-Build Contract

In most cases, project owners receive completed designs during the construction bidding process. However, in a design-build contract, the design and construction are done simultaneously and handled with one contract, as opposed to traditional construction contracting methods.

This type of construction contract allows for increased communication between the designer and the construction team and speeds up the bidding and construction process.

Guaranteed Maximum Price (GMP) Contract

A guaranteed maximum price (GMP) contract defines the maximum price that a project owner has to pay for a construction project. If the costs exceed said guaranteed maximum price, the general contractor will cover the additional expenses.

For that reason, this contract type requires that general contractors create the most accurate construction estimate possible. It might sound risky, but it doesn’t have to be. General contractors can easily create estimates using construction estimating software like ProjectManager or hire a specialized construction estimator to create realistic and profitable estimates.

Incentive Construction Contracts

Under an incentive construction contract, the project owner and contractor agree on an extra payment fee that’s given to the contractor depending on whether the project is delivered on time and under budget .

If the contractor misses the timeline or exceeds the budget, they still need to complete the project and meet the owner’s requirements even without earning the extra payment fee.

Integrated Project Delivery Contract

This type of contract is mostly used for large, complex projects. Similar to the design-build contract, it uses a single contract for design and construction, but it also involves a multi-party agreement between the owner, builder and designer where they share risks, agree on costs, set waivers and follow lean principles.

The main purpose of this construction contract is to provide a detailed framework that spreads the risks and rewards evenly among the parties. For example, an IPD construction contract involves a lump sum profit that’s divided among the owner, designer and builder if the project achieves financial results.

While each type of construction contract works differently, they still share some elements needed for any construction project.

• Contract Sum: Any construction contract should indicate the contract sum, which is the total value that the project owner will pay the contractor for the execution of work. The contract sum should cover all the project costs and expenses plus the contractor’s profit margin.
• Retainage: The project owner and contractor must agree on a retainage rate, which is a percentage of the payment that the project owner withholds until the contractor completes the duties outlined in the contract.
• Scope of Work: The scope of work is a document that describes all the tasks and deliverables of a project. In simple terms, it defines what will and won’t be done in a construction project, which is important for estimating costs and making a budget. Our scope of work template is a helpful tool that helps you define the tasks and deliverables that make up the scope of your project.

• Responsibilities of Owner and Contractor: A construction contract should outline responsibilities for both parties. For example, by signing a contract, the contractor assumes responsibility for completing the scope of work while the owner agrees to pay for that work. If either party fails to meet such obligations, the contract might be terminated.
• Payment Terms: Construction contracts must define how payment will be made to the contractor. There are several construction project management documents and tools you can use for payroll management such as timesheets, schedules of values or payment schedules.
• Change Management: Changes might be risky for your project, but they don’t have to be if you establish a change management process and use tools and documents like change requests, change orders and change logs.
• Construction Specifications: Construction specifications are the detailed description of the materials, workmanship, tools and quality standards that the project owner and contractor agree upon.
• Construction Timeline & Contract Duration: The contract should specify due dates for the completion of construction deliverables and the duration of the contract. You can use our Gantt chart template for Excel , Word or PowerPoint to create a project timeline you can attach to your construction documents.

• Terms and Conditions: Contracts contain terms and conditions such as indemnification clauses whenever the contractor fails to meet the quality standards or omits part of the scope of work due to negligence.
• Regulatory Compliance: Most contracts require the contractor to meet local requirements, building codes and other regulations.
• Warranty: Some contracts require the contractor to offer a warranty, which requires them to fix and repair any issues and defects that arise within a defined period.
• Construction Drawings: Some construction contracts involve the creation of construction documents such as construction schedules, blueprints, drawings, estimates and more.

Request for Proposal (RFP) Template

This free request for proposal template allows you to list all the information you’d like to get from the construction contractors who will send project proposals to bid on your construction project. A detailed RFP helps you avoid any misunderstandings with construction contractors by clearly defining what the scope of the project is, timeline, budget, selection criteria and more.

We offer a variety of free construction project management templates for Excel you can use to manage all aspects of your project.

No matter what type of construction project you’re planning , these best practices ensure your contract is a clear, detailed arrangement.

Include Incentives

One of the best ways to set a construction project up for success is by creating incentives. Incentives are useful when the scope is undetermined and the budget, time and labor costs are up in the air. Incentives encourage both contractors and owners to work efficiently and complete a project on time and under budget.

Clearly Outline Expectations

Be clear when conveying expectations on how expenses will be reported, how communication will be maintained or how any other aspect of a construction project is managed. Outline a contract and break it into key points to which the contractor can refer back.

Create Contingencies

The best construction contracts have contingency plans. More often than not, something unexpected will happen during a construction project. When construction contracts have contingencies, both the owner and the builder have a roadmap of what to do when something goes wrong.

Here are three common mistakes to learn from and avoid in your construction contracts.

Not Being Specific

One common mistake is to generalize rather than specify. The point of a construction contract is to detail the exact terms of the agreement between an owner and a builder, leaving no room for interpretation. There’s no such thing as an overly detailed contract.

With this in mind, construction contracts should remain clear and unclouded by unnecessary details. Find a balance between anticipating everything that should be included and editing down information that dilutes the key points. Our construction management templates are a great place to start creating your construction project documentation.

Not Establishing Communication

When writing a construction contract, specify exactly how and when a contractor should communicate. This communication can be in the form of regular check-ins or only in the case of significant changes, but both parties must know when to run something by one another before making decisions.

Lack of communication is detrimental to construction projects. Because there are so many moving parts, everyone must understand their role in one another. A well-written construction contract sets up a system of communication and makes it clear where to direct questions and updates.

Not Detailing How to Manage Changes

Changes are inevitable in any project, but never more so than in construction projects. Construction projects have countless moving parts and involve many individuals and many different contractors. This means adjustments are a natural part of the project.

A detailed construction contract means these changes don’t have to be bumps in the road. When contracts stipulate exactly how changes should be made, who makes them, and how the process looks, everything runs smoothly. On the other hand, when these details aren’t clear, contractors won’t know how to make changes, who to go to for approval and how to document what changes were made.

ProjectManager & Construction Contracts

ProjectManager gives you the power to manage construction projects from start to finish, on the go. Create a comprehensive project plan, complete documents and assign tasks from the job site or anywhere else you get work done.

Interactive Gantt Charts

We have an online Gantt chart for you to plan your construction project from start to finish. Add durations to your tasks and a bar chart will be generated. You can link dependent tasks and set milestones across the timeline.

Resource and Team Management

Managing resources can be complicated, but our online resource management software gives you the real-time data you need to make informed decisions. Categorize your teams, supplies and equipment and add hourly rates. When hours are logged, the actual cost is automatically compared to the planned cost.

As your teams log their hours, our time-tracking feature automatically updates when workers finish their tasks, making payroll a breeze. You can also track your team’s progress on the real-time dashboard, which displays key project KPIs in scannable graphs and charts.

Contracts aren’t the only type of construction document that you’ll need to create during the life cycle of your project. There are many other forms, reports and templates you might need to use to manage all the areas of your project. If you’d like to save some time, you can use our dozens of project management templates , which can help you easily make all your construction project documentation.

• 26 Construction Documents (Templates Included)
• Construction Reporting: Types of Construction Reports
• 11 Free Excel Construction Templates

ProjectManager is construction project management software that has the tools you need to manage your construction project. Our robust features make planning, scheduling and reporting down to the last task more efficient and effective. Plus, the data you get is more accurate because it’s updated as your team works. Try ProjectManager for free with this 30-day trial offer.

Deliver your projects on time and on budget

Start planning your projects.

• More Blog Popular
• Who's Who Legal
• Instruct Counsel
• My newsfeed
• Save & file
• View original
• Follow Please login to follow content.

add to folder:

• My saved (default)

Register now for your free, tailored, daily legal newsfeed service.

Find out more about Lexology or get in touch by visiting our About page.

Assignment, novation and construction contracts - What is your objective?

Consider a not too hypothetical situation where the parties to a construction project (employer, contractor and sub-contractor) enter into a Deed of Assignment intending that the employer, having lost confidence in the contractor, would directly engage the sub-contractor to complete the sub-contract works. But what if no assignment has taken place? What are the terms of the contract under which the sub-contractor carries out the works for the employer?

Potential risks with assignment

In construction projects, main contractors often assign the benefit of their key sub-contracts to the employer in the event of contractor default and consequent termination of the main contract. The employer can then enforce the rights in the sub-contract against the sub-contractor, including rectification of the works and the performance of particular obligations.

However, there are potential risks associated with assignment in these situations as the Technology and Construction Court’s decision in Energy Works (Hull) Ltd v MW High Tech Projects UK Ltd demonstrated. We discussed this decision in Assigning a sub-contract on termination: which rights is the contractor giving up? In this case, the nature of the assignment meant that the main contractor could not pursue claims made by the employer against its sub-contractor under the sub-contract. This limited the main contractor’s ability to ‘pass on’ any liability it had under the main contract to the sub-contractor.

But what if the Deed of Assignment does not take effect as an assignment?

Assignment v novation

Both assignment and novation are forms of transferring an interest under a contract from one party to another. However, they are very different and in their effect. An assignment transfers the benefit of a contract from one party to another, but only the benefit, not the burden. In contrast, a novation will transfer both the benefit and the burden of a contract from one party to another. A novation creates a new contractual relationship - a ‘new’ contract is entered into.

Another key difference with novation is that the consent of all parties concerned must be obtained, which is why novation is almost always effected through a tripartite agreement. In the case of an assignment, it is not always necessary to obtain consent, subject to what the specific terms of the contract provide.

When deciding whether to assign or novate, parties should consider (i) whether there is in fact a burden to novate, (ii) whether the novatee will be willing to take on the burden, (iii) whether all parties will consent to the novation and indeed enter into the agreement. If there is no burden under the contract to transfer, then an assignment is likely to be the most appropriate way to transfer the interests.

Is the Deed for an assignment or a novation?

Although a document may be labelled a Deed of Assignment, if it has references to the transfer of ‘ responsibilities and obligations ’ and is a tripartite agreement these are characteristic of a novation as opposed to an assignment.

A key issue in such circumstances is to ascertain whether making use of the words ‘ assigning ’ and ‘ assignment ’ actually affects the characteristics of the document.

There has been some consideration of this characterisation issue by the courts. In the case of Burdana v Leeds Teaching Hospitals NHS Trust [2017] EWCA Civ 1980, by majority the Court of Appeal decided that on the facts of the case, although the Deed of Assignment in question referred to an ‘ assignment ’ of the benefit and burden, on proper analysis there was indeed a novation.

Furthermore, in the case of Langston Group Corporation v Cardiff City FC [2008] EWHC 535, Briggs J made it evident that even though the variation agreement in question did not use the word ‘ novation ’ and did not describe itself as such, the circumstances and effect of the agreement was indeed a novation and a new contract had been created.

It may be the case that even if a document does not describe itself as a novation, yet has the key characteristics of one, then as a matter of interpretation the courts would accept that the document takes effect as a novation.

Key characteristics of a novation

If entering into a document that purports to be a Deed of Assignment, tread carefully as it may well take effect as a novation, particularly if the following characteristics are present:

• It is a tripartite agreement;
• All the parties give their consent;
• The novator has been released from its obligations;
• There has been an acceptance of the terms of the novation on the part of the novatee and the substituted party; and
• There is a vesting of remedies.

What is your objective?

Although a document may well be labelled as an assignment, it may have the characteristics of and take effect as novation. Parties need to be cautious and consider what they want to achieve when assessing whether to assign rights or to novate them along with obligations.

Filed under

• United Kingdom
• Construction
• Charles Russell Speechlys
• Technology and Construction Court

Popular articles from this firm

The uk’s first model letter of intent has been updated - has the wait been worth it *, retailers and consumer credit - the need for regular check ups *, gaining insights on forfeiture - estates gazette q&a *, the conservative and labour manifestos and renters reform: focus on build to rent and student accommodation *, injunctions against potential protesters - estates gazette q&a *.

If you would like to learn how Lexology can drive your content marketing strategy forward, please email [email protected] .

Related practical resources PRO

• How-to guide How-to guide: The legal framework for resolving disputes in England and Wales (UK)
• Checklist Checklist: Considerations prior to issuing court proceedings (UK)
• How-to guide How-to guide: How to effectively incorporate standard terms and conditions in a commercial agreement or transaction (USA)

Related research hubs

Pitfalls of Contractor’s Consents

by Michael Lilly

October 23, 2020

You’ve negotiated your Agreement with the Owner and you’ve started to mobilize.  The Owner is still trying to close on its construction financing – but they are “close.”  You receive a call from the Owner’s representative, the representative says “closing is scheduled for tomorrow, the lender just needs you to sign a document before they will fund, it’s no big deal, I’ll send it over to you right now – just sign it and get it to me as soon as possible.”  Finally!  The project is about to start!  You receive the document, a Contractor’s Consent, and you are inclined to just sign it and get to work. Should you?

What Is It Really?

In virtually every construction loan transaction with a commercial lender, the lender will require the borrower (owner) to assign the borrower’s interest in its construction contract with the general contractor, to the lender as additional collateral. This document is generally referred to simply as an Assignment of Construction Contract or Collateral Assignment of Construction Contract.  In connection with the borrower’s delivery of the Assignment of the Construction Contract, the lender will generally require that the borrower’s general contractor consent in writing to such assignment.  Thus, a Contractor’s Consent is first and foremost the general contractor’s written consent to the borrower’s collateral assignment of the construction contract.  However, lenders will ordinarily include multiple additional terms and concepts that the contractor should consider.

THE MAJOR ISSUES

If the Lender elects to assume the Construction Contract, when will it happen?

In the event of a borrower default under the loan documents, nearly every Contractor’s Consent sets forth a procedure allowing for the lender to either (i) terminate the project, or (ii) to assume the construction contract and take-over the project. Often, however, the consent will not require that the lender makes its choice, to either terminate or assume the construction contract, within a specific period of time.  Thus, should the lender declare the borrower in default, what is the general contractor to do?  The short answer is – the general contractor must stop work and wait on the lender to make a decision.  This will, in the very least, result in additional de-mobilization costs and potentially significant re-mobilization costs (should the lender elect to proceed with the contract).

What can the general contractor do?  Negotiate a specific time frame for the lender to make its election to terminate or assume the construction contract.

Lender consent to Change Orders.

Often Contractor’s Consents will include a specific obligation that the borrower and contractor obtain the Lender’s prior consent to any Change Orders.  The result – an already time consuming and often difficult change order process become infinitely more time consuming and difficult, as lenders are typically reluctant to agree to changes in cost and scope for a project.

• Search Search Please fill out this field.
• Building Your Business
• Operations & Success

What Is an Assignment of Contract?

Assignment of Contract Explained

Hero Images / Getty Images

Assignment of contract allows one person to assign, or transfer, their rights, obligations, or property to another. An assignment of contract clause is often included in contracts to give either party the opportunity to transfer their part of the contract to someone else in the future. Many assignment clauses require that both parties agree to the assignment.

Learn more about assignment of contract and how it works.

What Is Assignment of Contract?

Assignment of contract means the contract and the property, rights, or obligations within it can be assigned to another party. An assignment of contract clause can typically be found in a business contract. This type of clause is common in contracts with suppliers or vendors and in intellectual property (patent, trademark , and copyright) agreements.

How Does Assignment of Contract Work?

An assignment may be made to anyone, but it is typically made to a subsidiary or a successor. A subsidiary is a business owned by another business, while a successor is the business that follows a sale, acquisition, or merger.

Let’s suppose Ken owns a lawn mowing service and he has a contract with a real estate firm to mow at each of their offices every week in the summer. The contract includes an assignment clause, so when Ken goes out of business, he assigns the contract to his sister-in-law Karrie, who also owns a lawn mowing service.

Before you try to assign something in a contract, check the contract to make sure it's allowed, and notify the other party in the contract.

Assignment usually is included in a specific clause in a contract. It typically includes transfer of both accountability and responsibility to another party, but liability usually remains with the assignor (the person doing the assigning) unless there is language to the contrary.

What Does Assignment of Contract Cover?

Generally, just about anything of value in a contract can be assigned, unless there is a specific law or public policy disallowing the assignment.

Rights and obligations of specific people can’t be assigned because special skills and abilities can’t be transferred. This is called specific performance.   For example, Billy Joel wouldn't be able to transfer or assign a contract to perform at Madison Square Garden to someone else—they wouldn't have his special abilities.

Assignments won’t stand up in court if the assignment significantly changes the terms of the contract. For example, if Karrie’s business is tree trimming, not lawn mowing, the contract can’t be assigned to her.

Assigning Intellectual Property

Intellectual property (such as copyrights, patents, and trademarks) has value, and these assets are often assigned. The U.S. Patent and Trademark Office (USPTO) says patents are personal property and that patent rights can be assigned. Trademarks, too, can be assigned. The assignment must be registered with the USPTO's Electronic Trademark Assignment System (ETAS) .  

The U.S. Copyright Office doesn't keep a database of copyright assignments, but they will record the document if you follow their procedure.

Alternatives to Assignment of Contract

There are other types of transfers that may be functional alternatives to assignment.

Licensing is an agreement whereby one party leases the rights to use a piece of property (for example, intellectual property) from another. For instance, a business that owns a patent may license another company to make products using that patent.  

Delegation permits someone else to act on your behalf. For example, Ken’s lawn service might delegate Karrie to do mowing for him without assigning the entire contract to her. Ken would still receive the payment and control the work.

Do I Need an Assignment of Contract?

Assignment of contract can be a useful clause to include in a business agreement. The most common cases of assignment of contract in a business situation are:

• Assignment of a trademark, copyright, or patent
• Assignments to a successor company in the case of the sale of the business
• Assignment in a contract with a supplier or customer
• Assignment in an employment contract or work for hire agreement

Before you sign a contract, look to see if there is an assignment clause, and get the advice of an attorney if you want to assign something in a contract.

Key Takeaways

• Assignment of contract is the ability to transfer rights, property, or obligations to another.
• Assignment of contract is a clause often found in business contracts.
• A party may assign a contract to another party if the contract permits it and no law forbids it.

Legal Information Institute. " Assignment ." Accessed Jan. 2, 2021.

Legal Information Institute. " Specific Performance ." Accessed Jan. 2, 2021.

U.S. Patent and Trademark Office. " 301 Ownership/Assignability of Patents and Applications [R-10.2019] ." Accessed Jan. 2, 2021.

Licensing International. " What is Licensing ." Accessed Jan. 2, 2021.

What is a Notice of Assignment and How Does it Protect Construction Businesses?

by CapitalPlus Financial | Nov 8, 2023 | Blog

A Notice of Assignment (NOA) is a crucial document playing a significant role in protecting all parties involved. Understanding its definition and benefits is essential for business owners utilizing such services as invoice factoring to manage cash flow and operations effectively.

What is a Notice of Assignment?

A Notice of Assignment is a legal declaration of when rights or obligations under a contract are transferred from one party to another . For example, if your company sells its rights to accounts receivable payment to a third party such as a factoring company , a Notice of Assignment would be sent to the party owing the payment informing them of the new payee.

How Does a Notice of Assignment Protect All Parties?

• Ensures Payment: By notifying your debtor of the new arrangement, the NOA outlines the factoring company’s right to collect the payment, minimizing the risk of payment disputes with you, their client. This is especially important for debtors who are chronically slow-paying or late in payments.
• Improves Cash Flow: With the factoring company handling the invoice’s payment, the construction company receives immediate cash flow, enabling them to manage payroll and purchase materials without delays.
• Legal Rights: Being a legal agreement, the NOA binds the debtor to pay the factoring company, reducing the risk of non-payment and securing the factoring company’s interests.
• Clear Communication: The NOA provides clear communication and payment terms with the debtor reducing confusion.
• Transparency: The NOA ensures transparency, informing the debtor of the change in payment direction, which helps avoid any inadvertent payments to the original contractor.
• Streamlined Process: It creates a streamlined process for handling payments, ensuring that the debtor is clear on who and when to pay which can prevent legal complications.

While a Notice of Assignment acts as “official” announcement of a new arrangement, it is always best to make your client aware of your working with the factoring company. Most clients understand and accept invoice factoring, but surprises are rarely welcomed, especially when money is involved.

Notices of Assignment are an indispensable tool in the factoring process for businesses like construction companies. They ensures that all parties — the construction company, the factoring company, and the debtor — are protected and aware of their roles and responsibilities. By understanding the purpose of NOAs, construction businesses can rest assured that the factoring can be implemented quickly with minimal distractions.

If you still have questions about how NOAs can protect your construction business, or other aspects of the invoice factoring process , feel free to reach out . We are glad to help.

Restrictions on the assignment of rights in construction contracts

Published by a lexisnexis construction expert.

An assignment is the transfer of a right or an interest vested in one party (assignor) to another party (assignee), eg the transfer of the employer’s rights under a construction contract to the purchaser of the completed works. For the purposes of this Practice Note, the other party to the contract where the rights are being assigned is referred to as 'obligor'.

For further information on what an assignment is, why it arises in a construction context, how it operates and what steps are needed to put in place effective assignments, see Practice Note: Assignment in construction contracts. See also Practice Note: Legal and equitable assignment in construction contracts for guidance on the different ways parties can give effect to an assignment in construction projects (either legally or in equity) and the requirements for each.

Where a construction document, such as a building contract, collateral warranty or consultant appointment, is silent on the subject of assignment, then generally the rights under the contract can be freely and unilaterally assigned by an assignor to a third

Access this content for free with a 7 day trial of LexisNexis and benefit from:

• Instant clarification on points of law
• Smart search
• Workflow tools
• 41 practice areas

** Trials are provided to all LexisNexis content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisNexis services please email customer service via our online form. Free trials are only available to individuals based in the UK, Ireland and selected UK overseas territories and Caribbean countries. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.

Get your quote today and take step closer to being able to benefit from:

• 36 practice areas

Get a LexisNexis quote

* denotes a required field

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

Existing user? Sign-in CONTINUE READING GET A QUOTE

Related legal acts:

• Industrial and Provident Societies Act 1965 (1965 c 12)
• Law of Property Act 1925 (1925 c 20)

Key definition:

Assignment definition, what does assignment mean.

An assignment is 'an immediate transfer of an existing proprietary right, vested or contingent from one party to another'. Assignments can occur by consent or by operation of law.

Popular documents

Restrictions on the assignment of rights in construction contractsAn assignment is the transfer of a right or an interest vested in one party (assignor) to another party (assignee), eg the transfer of the employer’s rights under a construction contract to the purchaser of the completed works. For

The 'no loss' defence in construction contracts

The 'no loss' defence in construction contractsA no loss defence often arises due to the nature of the contractual matrix on construction projects. For example, a contract may be novated, the employer may not own the land on which the works are carried out, or the development may be sold after

What is the significance of an equitable assignment in the context of the assignment of future rights

What is the significance of an equitable assignment in the context of the assignment of future rights under a contract (or a chose in action)?An assignment is the transfer of a right or an interest vested in one party (assignor) to another party (assignee). The effect of a valid assignment is to

Scotland—the process for applying for sequestration

Scotland—the process for applying for sequestrationSequestration in Scotland is the legal process by which an insolvent debtor’s estate is gathered in, realised and then distributed among their creditors by a trustee appointed for that purpose. The process requires that a formal award of

0330 161 1234

• International Sales(Includes Middle East)
• Latin America and the Caribbean
• Netherlands
• New Zealand
• Philippines
• South Africa
• Switzerland
• United States

Popular Links

• Supplier Payment Terms
• Partner Alliance Programme

HELP & SUPPORT

• Legal Help and Support
• Tolley Tax Help and Support

LEGAL SOLUTIONS

• Compliance and Risk
• Forms and Documents
• Legal Drafting
• Legal Research
• Magazines and Journals
• News and Media Analysis
• Practice Management
• Privacy Policy
• Cookie Settings
• Terms & Conditions
• Data Protection Inquiry
• Protecting Human Rights: Our Modern Slavery Agreement

• Practical Law

Assignment of construction documents

Practical law uk practice note 3-314-7960  (approx. 32 pages), get full access to this document with a free trial.

Try free and see for yourself how Practical Law resources can improve productivity, efficiency and response times.

About Practical Law

This document is from Thomson Reuters Practical Law, the legal know-how that goes beyond primary law and traditional legal research to give lawyers a better starting point. We provide standard documents, checklists, legal updates, how-to guides, and more.

650+ full-time experienced lawyer editors globally create and maintain timely, reliable and accurate resources across all major practice areas.

83% of customers are highly satisfied with Practical Law and would recommend to a colleague.

81% of customers agree that Practical Law saves them time.

• Collateral Warranties and Third Parties
• Collateral warranties and third parties
• Construction and engineering contracts