What is an assignment ?
An assignment is the legal word for transferring a legal right from one person to another. One form of assignment is the assignment of a contract. The benefit but not the burden (transferring of a burden is known as novation in legal terms) of a contract can be assigned, although in practical terms the assignee (transferee) and the 3rd party who originally contracted with the assignor (transferor) tend to co-operate to make the contract work, since both parties to a contract will generally have benefits and burdens.
What is the effect of a contractual assignment ?
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. It is important to note that an assignment only transfers existing rights and does not create any new rights. Additionally, the assignee will take over the contract as it was at the time of assignment and thus any benefits obtained will be subject to any pre-existing reduction of possible contractual benefits. A good example might be the assignment of a debt where the debtor has a claim for a set-off against that debt.
As regards the assignor’s position on a contract, it is very important to understand that he/she/they will remain liable after the assignment to perform any obligations in the contract that remain to be fulfilled. In practice, the assignee generally deals with such tasks but nevertheless the assignor should be aware of potential liabilities and perhaps specifically obtain a release for the other contracting party or at the very least to seek a full indemnity from the assignee in relation to any breach of contract or failure to perform by the assignee.
For general legal advice, it is always important to get solid advice from good solicitors.