California Assignment of Contract Attorney
Would you like assistance creating an assignment of contract? At San Diego Esquire, we help businesses and individuals protect their interest by creating contract assignments. Contact us for legal advice and counseling before assignment the terms and conditions of an agreement.
Read on to learn more about assigning a business contract in California.
What is an Assignment of Contract?
An assignment of a contract happens when one party to the contract transfers or assigns their rights and obligations under the contract to a third party. The party assigning their rights is known as the assignor. The new party, who the rights and obligations are assigned to, is known as the assignee. The original party whose rights and obligations do not change is known as the obligor. For example, Jill is a restaurant owner who has a standing contract with Mark, a local fisherman, to provide her with fresh caught on a daily basis. Mark moves away, and assigns the contract to Dave, another fisherman, who now provides Jill with the catch of the day. In this example, Mark is the is the assignor, Dave is the assignee, and Jill is the obligor.
When a contract is assigned, a new contract is created between the assignor and assignee. A contract assignment should contain the rights and obligations that the assignor wishes to transfer, and the expiration date of the contract. The assignor and assignee may wish to include a clause that outlines who is liable in the case of a breach. A contract can be assigned with an oral agreement. For example, if Mark was sick one morning, he might call Dave and ask him to fulfill Jill’s fish order for the day. Many times, the assignor and assignee will sign a written agreement, particularly if there is a large amount of money involved, the original contract is complex, the transaction involves real property, or the assignor and assignee have no history of dealing with each other. The assignee and assignor are not required to inform the obligator, unless the original contract specifically states that the obligor needs to be informed if the contract is assigned.
Enforcing an Assignment of Contract
In certain situations, a contract assignment will not be enforced. If the original contract expressly prohibited an assignment, then an assignment will be invalid. Assignments that create material alterations to the original contract will not be enforced. Material alterations include situations where performance is affected, the value of the contract decreases, or there is an increased risk to the obligor. For example, if Jill advertises that all of her seafood is sustainably caught and Dave’s fishing practices are not sustainable, this would be a material alteration to the contract, and the assignment would be void. Due to the nature of the contracts, most personal service contracts cannot be assigned. Certain assignments are prohibited by law and by public policy. Most states prohibit employees from assigning future wages. There are laws that bar the assignment of claims against the Federal government. Public policy prohibits the assignment of personal injury claims because it would encourage litigation.
Contact San Diego Esquire for more information about how we can create an assignment of contract for you. We provide flat fee contract assignment drafting services to California businesses and individuals. Review our California Contract Drafting, Review & Amendment Service for more information.