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Assignment is a legal definition that refers to the transfer of rights, property, or other benefits between two parties. The party allocating the rights is known as the “assignor”, while the one receiving them is called the “assignee”. The other original party to the contract is known as the “ obligor ”.

A burden, duty, or detriment cannot be transferred as an assignment without the agreement of the assignee . Furthermore, the assignment can be carried out as a gift, or it may be paid for with a contractual consideration .

Keep reading to learn how this important legal term is used both in contract and property law and to see relevant examples.

• Assignment Examples

A common example of assignment within property law can be seen in rental agreements between landlords and tenants. For example, a tenant may be renting from a landlord but wants another party to take over the property . In this scenario, the tenant may be able to choose between assigning the lease to a new tenant or subleasing it.

If assigning it, the new tenant will be given the entire balance of the term, with no reversion to anyone else being possible. In other words, the new tenant would have a legal relationship with the landlord. On the other hand, if subleasing the property, the new tenant would be given a limited term and no legal responsibility towards the property owner, only towards the original tenant.

Another example of assignment can be seen within contract law . Let’s say that a school hires a piano teacher for a monthly employment contract with a salary of $2000 per month. As long as there is consent from all parties, the teacher could assign their contract to another qualified piano instructor.

This would be an assignment both of the piano teacher’s rights to receive $2000 per month, and a delegation of their duty to teach piano lessons. This illustrates the fact that under contract law, assignment always includes a transfer of both rights and duties between the parties. If a breach of contract is made by either party, for example for defective performance, then the new teacher or the school can sue each other accordingly.

• Legal Requirements for Assignment

For an assignment to be legally valid, it must meet certain requirements . If these are not met, a trial court can determine that the transfer of rights did not occur. The legal requirements for assignment are as follows:

• All parties must consent and be legally capable to carry out the assignment.
• The objects, rights, or benefits being transferred must be legal.
• The assignment is not against public policy or illegal.
• Some type of consideration is included if necessary.
• The contract in question must already be in place and doesn’t prohibit assignment.
• If a duty is being transferred, and it requires a rare genius or skill, then it cannot be delegated.
• The assignment doesn’t significantly change the expected outcome of a contract.
• Assignment Steps

To successfully assign a contract, certain steps must be followed to ensure the process is legally valid. The necessary assignment steps are listed below:

• Ensuring there is no anti-assignment clause in the contract.
• Executing the assignment by transferring the obligations and rights to a third party.
• Notifying the obligor of the transfer, which in turn relieves the assignor of any liability.
• Avoiding Assignment

In certain situations, one of the two parties may not want to allow their counterpart to assign the contract. This can be prevented by setting anti-assignment clauses in the original contract. An example of this is making it necessary for prior written consent to be attained from the other parties before the assignment is approved. Nevertheless, an anti-assignment clause cannot be included in an assignment that was issued or ordered by a court.

• Assignment vs. Novation

Novation occurs when a party would like to transfer both the benefits and burden of a contract to another party. This is similar to assignment in the sense that the benefits are transferred, but in this case, the burden is also passed on. When novation is finalized, the original contract is deleted and a new one is created, in which a third party becomes responsible for all the obligations and rights of the original contract.

• Assignment vs. Delegation

Although delegation and assignment are similar in purpose, they are two different concepts. Delegation refers to transferring the obligation to a third party without an assignment contract . While in assignment an entire contract and its rights and benefits can be passed on, in delegation only a particular contractual task or activity is transferred.

Let’s look at an example . Lisa is a homeowner that wants to hire Michael with an independent contractor agreement to remodel her garage. He plans to do all the work himself, but he’s not a painter, so he wants to delegate the painting work to his friend Valentina.

In this example, the contract is between Lisa, the obligor, and Michael, the delegator. Valentina would then be known as a delegatee, she doesn’t assume responsibility for the contract nor does she receive the contractual benefits, which in this case would be monetary compensation. However, Michael may have a separate agreement with Valentina to pay her in return for her work.

It’s also important to note that some duties are so specific in nature that it’s not possible to delegate them. In addition, if a party wants to avoid delegation , it’s recommended to add a clause to prevent the other party from delegating their duties.

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• assignments basic law

Assignments: The Basic Law

The assignment of a right or obligation is a common contractual event under the law and the right to assign (or prohibition against assignments) is found in the majority of agreements, leases and business structural documents created in the United States.

As with many terms commonly used, people are familiar with the term but often are not aware or fully aware of what the terms entail. The concept of assignment of rights and obligations is one of those simple concepts with wide ranging ramifications in the contractual and business context and the law imposes severe restrictions on the validity and effect of assignment in many instances. Clear contractual provisions concerning assignments and rights should be in every document and structure created and this article will outline why such drafting is essential for the creation of appropriate and effective contracts and structures.

The reader should first read the article on Limited Liability Entities in the United States and Contracts since the information in those articles will be assumed in this article.

Basic Definitions and Concepts:

An assignment is the transfer of rights held by one party called the “assignor” to another party called the “assignee.” The legal nature of the assignment and the contractual terms of the agreement between the parties determines some additional rights and liabilities that accompany the assignment. The assignment of rights under a contract usually completely transfers the rights to the assignee to receive the benefits accruing under the contract. Ordinarily, the term assignment is limited to the transfer of rights that are intangible, like contractual rights and rights connected with property. Merchants Service Co. v. Small Claims Court , 35 Cal. 2d 109, 113-114 (Cal. 1950).

An assignment will generally be permitted under the law unless there is an express prohibition against assignment in the underlying contract or lease. Where assignments are permitted, the assignor need not consult the other party to the contract but may merely assign the rights at that time. However, an assignment cannot have any adverse effect on the duties of the other party to the contract, nor can it diminish the chance of the other party receiving complete performance. The assignor normally remains liable unless there is an agreement to the contrary by the other party to the contract.

The effect of a valid assignment is to remove privity between the assignor and the obligor and create privity between the obligor and the assignee. Privity is usually defined as a direct and immediate contractual relationship. See Merchants case above.

Further, for the assignment to be effective in most jurisdictions, it must occur in the present. One does not normally assign a future right; the assignment vests immediate rights and obligations.

No specific language is required to create an assignment so long as the assignor makes clear his/her intent to assign identified contractual rights to the assignee. Since expensive litigation can erupt from ambiguous or vague language, obtaining the correct verbiage is vital. An agreement must manifest the intent to transfer rights and can either be oral or in writing and the rights assigned must be certain.

Note that an assignment of an interest is the transfer of some identifiable property, claim, or right from the assignor to the assignee. The assignment operates to transfer to the assignee all of the rights, title, or interest of the assignor in the thing assigned. A transfer of all rights, title, and interests conveys everything that the assignor owned in the thing assigned and the assignee stands in the shoes of the assignor. Knott v. McDonald’s Corp ., 985 F. Supp. 1222 (N.D. Cal. 1997)

The parties must intend to effectuate an assignment at the time of the transfer, although no particular language or procedure is necessary. As long ago as the case of National Reserve Co. v. Metropolitan Trust Co ., 17 Cal. 2d 827 (Cal. 1941), the court held that in determining what rights or interests pass under an assignment, the intention of the parties as manifested in the instrument is controlling.

The intent of the parties to an assignment is a question of fact to be derived not only from the instrument executed by the parties but also from the surrounding circumstances. When there is no writing to evidence the intention to transfer some identifiable property, claim, or right, it is necessary to scrutinize the surrounding circumstances and parties’ acts to ascertain their intentions. Strosberg v. Brauvin Realty Servs., 295 Ill. App. 3d 17 (Ill. App. Ct. 1st Dist. 1998)

The general rule applicable to assignments of choses in action is that an assignment, unless there is a contract to the contrary, carries with it all securities held by the assignor as collateral to the claim and all rights incidental thereto and vests in the assignee the equitable title to such collateral securities and incidental rights. An unqualified assignment of a contract or chose in action, however, with no indication of the intent of the parties, vests in the assignee the assigned contract or chose and all rights and remedies incidental thereto.

More examples: In Strosberg v. Brauvin Realty Servs ., 295 Ill. App. 3d 17 (Ill. App. Ct. 1st Dist. 1998), the court held that the assignee of a party to a subordination agreement is entitled to the benefits and is subject to the burdens of the agreement. In Florida E. C. R. Co. v. Eno , 99 Fla. 887 (Fla. 1930), the court held that the mere assignment of all sums due in and of itself creates no different or other liability of the owner to the assignee than that which existed from the owner to the assignor.

And note that even though an assignment vests in the assignee all rights, remedies, and contingent benefits which are incidental to the thing assigned, those which are personal to the assignor and for his sole benefit are not assigned. Rasp v. Hidden Valley Lake, Inc ., 519 N.E.2d 153, 158 (Ind. Ct. App. 1988). Thus, if the underlying agreement provides that a service can only be provided to X, X cannot assign that right to Y.

Novation Compared to Assignment:

Although the difference between a novation and an assignment may appear narrow, it is an essential one. “Novation is a act whereby one party transfers all its obligations and benefits under a contract to a third party.” In a novation, a third party successfully substitutes the original party as a party to the contract. “When a contract is novated, the other contracting party must be left in the same position he was in prior to the novation being made.”

A sublease is the transfer when a tenant retains some right of reentry onto the leased premises. However, if the tenant transfers the entire leasehold estate, retaining no right of reentry or other reversionary interest, then the transfer is an assignment. The assignor is normally also removed from liability to the landlord only if the landlord consents or allowed that right in the lease. In a sublease, the original tenant is not released from the obligations of the original lease.

Equitable Assignments:

An equitable assignment is one in which one has a future interest and is not valid at law but valid in a court of equity. In National Bank of Republic v. United Sec. Life Ins. & Trust Co. , 17 App. D.C. 112 (D.C. Cir. 1900), the court held that to constitute an equitable assignment of a chose in action, the following has to occur generally: anything said written or done, in pursuance of an agreement and for valuable consideration, or in consideration of an antecedent debt, to place a chose in action or fund out of the control of the owner, and appropriate it to or in favor of another person, amounts to an equitable assignment. Thus, an agreement, between a debtor and a creditor, that the debt shall be paid out of a specific fund going to the debtor may operate as an equitable assignment.

In Egyptian Navigation Co. v. Baker Invs. Corp. , 2008 U.S. Dist. LEXIS 30804 (S.D.N.Y. Apr. 14, 2008), the court stated that an equitable assignment occurs under English law when an assignor, with an intent to transfer his/her right to a chose in action, informs the assignee about the right so transferred.

An executory agreement or a declaration of trust are also equitable assignments if unenforceable as assignments by a court of law but enforceable by a court of equity exercising sound discretion according to the circumstances of the case. Since California combines courts of equity and courts of law, the same court would hear arguments as to whether an equitable assignment had occurred. Quite often, such relief is granted to avoid fraud or unjust enrichment.

Note that obtaining an assignment through fraudulent means invalidates the assignment. Fraud destroys the validity of everything into which it enters. It vitiates the most solemn contracts, documents, and even judgments. Walker v. Rich , 79 Cal. App. 139 (Cal. App. 1926). If an assignment is made with the fraudulent intent to delay, hinder, and defraud creditors, then it is void as fraudulent in fact. See our article on Transfers to Defraud Creditors .

But note that the motives that prompted an assignor to make the transfer will be considered as immaterial and will constitute no defense to an action by the assignee, if an assignment is considered as valid in all other respects.

Enforceability of Assignments:

Whether a right under a contract is capable of being transferred is determined by the law of the place where the contract was entered into. The validity and effect of an assignment is determined by the law of the place of assignment. The validity of an assignment of a contractual right is governed by the law of the state with the most significant relationship to the assignment and the parties.

In some jurisdictions, the traditional conflict of laws rules governing assignments has been rejected and the law of the place having the most significant contacts with the assignment applies. In Downs v. American Mut. Liability Ins. Co ., 14 N.Y.2d 266 (N.Y. 1964), a wife and her husband separated and the wife obtained a judgment of separation from the husband in New York. The judgment required the husband to pay a certain yearly sum to the wife. The husband assigned 50 percent of his future salary, wages, and earnings to the wife. The agreement authorized the employer to make such payments to the wife.

After the husband moved from New York, the wife learned that he was employed by an employer in Massachusetts. She sent the proper notice and demanded payment under the agreement. The employer refused and the wife brought an action for enforcement. The court observed that Massachusetts did not prohibit assignment of the husband’s wages. Moreover, Massachusetts law was not controlling because New York had the most significant relationship with the assignment. Therefore, the court ruled in favor of the wife.

Therefore, the validity of an assignment is determined by looking to the law of the forum with the most significant relationship to the assignment itself. To determine the applicable law of assignments, the court must look to the law of the state which is most significantly related to the principal issue before it.

Assignment of Contractual Rights:

Generally, the law allows the assignment of a contractual right unless the substitution of rights would materially change the duty of the obligor, materially increase the burden or risk imposed on the obligor by the contract, materially impair the chance of obtaining return performance, or materially reduce the value of the performance to the obligor. Restat 2d of Contracts, § 317(2)(a). This presumes that the underlying agreement is silent on the right to assign.

If the contract specifically precludes assignment, the contractual right is not assignable. Whether a contract is assignable is a matter of contractual intent and one must look to the language used by the parties to discern that intent.

In the absence of an express provision to the contrary, the rights and duties under a bilateral executory contract that does not involve personal skill, trust, or confidence may be assigned without the consent of the other party. But note that an assignment is invalid if it would materially alter the other party’s duties and responsibilities. Once an assignment is effective, the assignee stands in the shoes of the assignor and assumes all of assignor’s rights. Hence, after a valid assignment, the assignor’s right to performance is extinguished, transferred to assignee, and the assignee possesses the same rights, benefits, and remedies assignor once possessed. Robert Lamb Hart Planners & Architects v. Evergreen, Ltd. , 787 F. Supp. 753 (S.D. Ohio 1992).

On the other hand, an assignee’s right against the obligor is subject to “all of the limitations of the assignor’s right, all defenses thereto, and all set-offs and counterclaims which would have been available against the assignor had there been no assignment, provided that these defenses and set-offs are based on facts existing at the time of the assignment.” See Robert Lamb , case, above.

The power of the contract to restrict assignment is broad. Usually, contractual provisions that restrict assignment of the contract without the consent of the obligor are valid and enforceable, even when there is statutory authorization for the assignment. The restriction of the power to assign is often ineffective unless the restriction is expressly and precisely stated. Anti-assignment clauses are effective only if they contain clear, unambiguous language of prohibition. Anti-assignment clauses protect only the obligor and do not affect the transaction between the assignee and assignor.

Usually, a prohibition against the assignment of a contract does not prevent an assignment of the right to receive payments due, unless circumstances indicate the contrary. Moreover, the contracting parties cannot, by a mere non-assignment provision, prevent the effectual alienation of the right to money which becomes due under the contract.

A contract provision prohibiting or restricting an assignment may be waived, or a party may so act as to be estopped from objecting to the assignment, such as by effectively ratifying the assignment. The power to void an assignment made in violation of an anti-assignment clause may be waived either before or after the assignment. See our article on Contracts.

Noncompete Clauses and Assignments:

Of critical import to most buyers of businesses is the ability to ensure that key employees of the business being purchased cannot start a competing company. Some states strictly limit such clauses, some do allow them. California does restrict noncompete clauses, only allowing them under certain circumstances. A common question in those states that do allow them is whether such rights can be assigned to a new party, such as the buyer of the buyer.

A covenant not to compete, also called a non-competitive clause, is a formal agreement prohibiting one party from performing similar work or business within a designated area for a specified amount of time. This type of clause is generally included in contracts between employer and employee and contracts between buyer and seller of a business.

Many workers sign a covenant not to compete as part of the paperwork required for employment. It may be a separate document similar to a non-disclosure agreement, or buried within a number of other clauses in a contract. A covenant not to compete is generally legal and enforceable, although there are some exceptions and restrictions.

Whenever a company recruits skilled employees, it invests a significant amount of time and training. For example, it often takes years before a research chemist or a design engineer develops a workable knowledge of a company’s product line, including trade secrets and highly sensitive information. Once an employee gains this knowledge and experience, however, all sorts of things can happen. The employee could work for the company until retirement, accept a better offer from a competing company or start up his or her own business.

A covenant not to compete may cover a number of potential issues between employers and former employees. Many companies spend years developing a local base of customers or clients. It is important that this customer base not fall into the hands of local competitors. When an employee signs a covenant not to compete, he or she usually agrees not to use insider knowledge of the company’s customer base to disadvantage the company. The covenant not to compete often defines a broad geographical area considered off-limits to former employees, possibly tens or hundreds of miles.

Another area of concern covered by a covenant not to compete is a potential ‘brain drain’. Some high-level former employees may seek to recruit others from the same company to create new competition. Retention of employees, especially those with unique skills or proprietary knowledge, is vital for most companies, so a covenant not to compete may spell out definite restrictions on the hiring or recruiting of employees.

A covenant not to compete may also define a specific amount of time before a former employee can seek employment in a similar field. Many companies offer a substantial severance package to make sure former employees are financially solvent until the terms of the covenant not to compete have been met.

Because the use of a covenant not to compete can be controversial, a handful of states, including California, have largely banned this type of contractual language. The legal enforcement of these agreements falls on individual states, and many have sided with the employee during arbitration or litigation. A covenant not to compete must be reasonable and specific, with defined time periods and coverage areas. If the agreement gives the company too much power over former employees or is ambiguous, state courts may declare it to be overbroad and therefore unenforceable. In such case, the employee would be free to pursue any employment opportunity, including working for a direct competitor or starting up a new company of his or her own.

It has been held that an employee’s covenant not to compete is assignable where one business is transferred to another, that a merger does not constitute an assignment of a covenant not to compete, and that a covenant not to compete is enforceable by a successor to the employer where the assignment does not create an added burden of employment or other disadvantage to the employee. However, in some states such as Hawaii, it has also been held that a covenant not to compete is not assignable and under various statutes for various reasons that such covenants are not enforceable against an employee by a successor to the employer. Hawaii v. Gannett Pac. Corp. , 99 F. Supp. 2d 1241 (D. Haw. 1999)

It is vital to obtain the relevant law of the applicable state before drafting or attempting to enforce assignment rights in this particular area.

Conclusion:

In the current business world of fast changing structures, agreements, employees and projects, the ability to assign rights and obligations is essential to allow flexibility and adjustment to new situations. Conversely, the ability to hold a contracting party into the deal may be essential for the future of a party. Thus, the law of assignments and the restriction on same is a critical aspect of every agreement and every structure. This basic provision is often glanced at by the contracting parties, or scribbled into the deal at the last minute but can easily become the most vital part of the transaction.

As an example, one client of ours came into the office outraged that his co venturer on a sizable exporting agreement, who had excellent connections in Brazil, had elected to pursue another venture instead and assigned the agreement to a party unknown to our client and without the business contacts our client considered vital. When we examined the handwritten agreement our client had drafted in a restaurant in Sao Paolo, we discovered there was no restriction on assignment whatsoever…our client had not even considered that right when drafting the agreement after a full day of work.

One choses who one does business with carefully…to ensure that one’s choice remains the party on the other side of the contract, one must master the ability to negotiate proper assignment provisions.

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The Law Dictionary

Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

ASSIGNMENT Definition & Legal Meaning

Definition & citations:.

In contracts. 1. The act by which one person transfers to another, or causes to vest in that other, the whole of the right, interest, or property which he has in any realty or personalty, in possession or in action, or any share, interest, or subsidiary estate therein. Seventh Nat. Bank v. Iron Co. (C. C.) 35 Fed. 440; Haug v. Riley, 101 Ga. 372, 29 S. E. 44, 40 L It A. 244. More particularly, a written transfer of property, as distinguished from a transfer by mere delivery. 2. In a narrower sense, the transfer or making over of the estate, right, or title which one has in lands and tenements; and, in an especially technical sense, the transfer of the unexpired residue of a term or estate for life or years. Assignment does not include testamentary transfers. The idea of an assignment is essentially that of a transfer by one existing party to another existing party of some species of property or valuable interest, except in the case of an executor. Ilight v. Sackett, 34 N. Y. 447. 3. A transfer or making over by a debtor of all his property and effects to one or more assignees in trust for the benefit of his creditors. 2 Story, Eq. Jur.

This article contains general legal information but does not constitute professional legal advice for your particular situation. The Law Dictionary is not a law firm, and this page does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

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Assignment of Contract

Jump to section, what is an assignment of contract.

An assignment of contract is a legal term that describes the process that occurs when the original party (assignor) transfers their rights and obligations under their contract to a third party (assignee). When an assignment of contract happens, the original party is relieved of their contractual duties, and their role is replaced by the approved incoming party.

How Does Assignment of Contract Work?

An assignment of contract is simpler than you might think.

The process starts with an existing contract party who wishes to transfer their contractual obligations to a new party.

When this occurs, the existing contract party must first confirm that an assignment of contract is permissible under the legally binding agreement . Some contracts prohibit assignments of contract altogether, and some require the other parties of the agreement to agree to the transfer. However, the general rule is that contracts are freely assignable unless there is an explicit provision that says otherwise.

In other cases, some contracts allow an assignment of contract without any formal notification to other contract parties. If this is the case, once the existing contract party decides to reassign his duties, he must create a “Letter of Assignment ” to notify any other contract signers of the change.

The Letter of Assignment must include details about who is to take over the contractual obligations of the exiting party and when the transfer will take place. If the assignment is valid, the assignor is not required to obtain the consent or signature of the other parties to the original contract for the valid assignment to take place.

Check out this article to learn more about how assigning a contract works.

Contract Assignment Examples

Contract assignments are great tools for contract parties to use when they wish to transfer their commitments to a third party. Here are some examples of contract assignments to help you better understand them:

Anna signs a contract with a local trash company that entitles her to have her trash picked up twice a week. A year later, the trash company transferred her contract to a new trash service provider. This contract assignment effectively makes Anna’s contract now with the new service provider.

Hasina enters a contract with a national phone company for cell phone service. The company goes into bankruptcy and needs to close its doors but decides to transfer all current contracts to another provider who agrees to honor the same rates and level of service. The contract assignment is completed, and Hasina now has a contract with the new phone company as a result.

Here is an article where you can find out more about contract assignments.

Assignment of Contract in Real Estate

Assignment of contract is also used in real estate to make money without going the well-known routes of buying and flipping houses. When real estate LLC investors use an assignment of contract, they can make money off properties without ever actually buying them by instead opting to transfer real estate contracts .

This process is called real estate wholesaling.

Real Estate Wholesaling

Real estate wholesaling consists of locating deals on houses that you don’t plan to buy but instead plan to enter a contract to reassign the house to another buyer and pocket the profit.

The process is simple: real estate wholesalers negotiate purchase contracts with sellers. Then, they present these contracts to buyers who pay them an assignment fee for transferring the contract.

This process works because a real estate purchase agreement does not come with the obligation to buy a property. Instead, it sets forth certain purchasing parameters that must be fulfilled by the buyer of the property. In a nutshell, whoever signs the purchase contract has the right to buy the property, but those rights can usually be transferred by means of an assignment of contract.

This means that as long as the buyer who’s involved in the assignment of contract agrees with the purchasing terms, they can legally take over the contract.

But how do real estate wholesalers find these properties?

It is easier than you might think. Here are a few examples of ways that wholesalers find cheap houses to turn a profit on:

• Direct mailers
• Place newspaper ads
• Make posts in online forums
• Social media posts

The key to finding the perfect home for an assignment of contract is to locate sellers that are looking to get rid of their properties quickly. This might be a family who is looking to relocate for a job opportunity or someone who needs to make repairs on a home but can’t afford it. Either way, the quicker the wholesaler can close the deal, the better.

Once a property is located, wholesalers immediately go to work getting the details ironed out about how the sale will work. Transparency is key when it comes to wholesaling. This means that when a wholesaler intends to use an assignment of contract to transfer the rights to another person, they are always upfront about during the preliminary phases of the sale.

In addition to this practice just being good business, it makes sure the process goes as smoothly as possible later down the line. Wholesalers are clear in their intent and make sure buyers know that the contract could be transferred to another buyer before the closing date arrives.

After their offer is accepted and warranties are determined, wholesalers move to complete a title search . Title searches ensure that sellers have the right to enter into a purchase agreement on the property. They do this by searching for any outstanding tax payments, liens , or other roadblocks that could prevent the sale from going through.

Wholesalers also often work with experienced real estate lawyers who ensure that all of the legal paperwork is forthcoming and will stand up in court. Lawyers can also assist in the contract negotiation process if needed but often don’t come in until the final stages.

If the title search comes back clear and the real estate lawyer gives the green light, the wholesaler will immediately move to locate an entity to transfer the rights to buy.

One of the most attractive advantages of real estate wholesaling is that very little money is needed to get started. The process of finding a seller, negotiating a price, and performing a title search is an extremely cheap process that almost anyone can do.

On the other hand, it is not always a positive experience. It can be hard for wholesalers to find sellers who will agree to sell their homes for less than the market value. Even when they do, there is always a chance that the transferred buyer will back out of the sale, which leaves wholesalers obligated to either purchase the property themselves or scramble to find a new person to complete an assignment of contract with.

Learn more about assignment of contract in real estate by checking out this article .

Who Handles Assignment of Contract?

The best person to handle an assignment of contract is an attorney. Since these are detailed legal documents that deal with thousands of dollars, it is never a bad idea to have a professional on your side. If you need help with an assignment of contract or signing a business contract , post a project on ContractsCounsel. There, you can connect with attorneys who know everything there is to know about assignment of contract amendment and can walk you through the whole process.

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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.

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by   Belle Wong, J.D.

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

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Updated on: November 24, 2023 · 3min 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.

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Practical Law UK Glossary 1-107-6442  (Approx. 4 pages)

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The Law Dictionary

TheLaw.com Law Dictionary & Black's Law Dictionary 2nd Ed.

This refers to the transfer of property rights from one person to another person, the assignor transferring the property to the assignee.

Law Dictionary – Alternative Legal Definition

In contracts. 1. The act by which one person transfers to another, or causes to vest in that other, the whole of the right, interest, or property which he has in any realty or personalty, in possession or in action, or any share, interest, or subsidiary estate therein. Seventh Nat. Bank v. Iron Co. (C. C.) 35 Fed. 440; Haug v. Riley, 101 Ga. 372, 29 S. E. 44, 40 L R. A. 244. More particularly, a written transfer of property, as distinguished from a transfer by mere delivery. 2. In a narrower sense, the transfer or for life or years. Assignment does not include testamentary transfers. The idea of an assignment is essentially that of a transfer by one existing party to another existing party of some species of property or valuable interest, except in the case of an executor. Blight v. Sackett, 34 N. Y. 447. 3. A transfer or making over by a debtor of all his property and effects to one or more assignees in trust for the benefit of his creditors. 2 Story, Eq. Jur.

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Assignee is a person to whom a right is transferred by the person holding such rights under the transferred contract (the “assignor”).  The act of transferring is referred to as “ assigning ” or “ assignment ” and is a concept found in both  contract  and  property  law. 

Contract Law  

Under contract law, when one party assigns a contract, the assignment represents both: (1) a transfer of rights; and (2) a delegation of  duties .  For example, if A contracts with B to teach B guitar for $50, A can assign this contract to C.  Here, A has both: assigned A’s rights under the contract to receive the $50 to C, and delegated A’s  duty  to teach guitar to C.  In this example, A is the “assignor” because he/she assigns the contract to C. A is also the “primary obligor ,” meaning he/she will still be liable to B if C fails to teach B guitar. C is the “assignee,” since C is the party to whom A transfers the contract. C is also the “secondary obligor,” since he/she must perform the  obligations  to B. B is the ultimate recipient of the duty under the assignment, and is the “ obligee .”

There are a few notable rules regarding assignments under  contract  law.  First, if an individual has not yet secured the contract to perform duties to another, he/she cannot assign his/her future right to an assignee.  That is, if A has not yet contracted with B to teach B guitar, A cannot  assign  his/her rights to C.  Second, rights cannot be assigned when they materially change the obligor’s duty and rights.  Third, the primary  obligor  can sue the  assignee directly if the  assignee  does not perform the assigned duty. In guitar assignment example, if C does not teach B guitar, A can sue C for any liability that A incurs as a result of C’s failure to perform the assigned contract. Fourth, if the promised performance requires a rare genius or skill, then the primary obligor cannot assign the contract.  

Lastly, a related concept is  novation , which is when the secondary obligor substitutes and releases the primary obligor.  If  novation  occurs, then the primary obligor’s duties are extinguished under the contract. However,  novation  requires the obligee’s  consent . In the guitar example, if A, B, and C agree to novation, then A would not be liable if C fails to teach B guitar.

Property Law

Under  property  law, assignment typically arises in landlord-tenant situations.  For example, A might be renting from landlord B but wants C, a new tenant, to take over the lease.  In this scenario, A might be able to choose between  assigning  and  subleasing  the property to C.  If  assigning , A would be giving C the entire balance of the term, with no reversion to anyone. If subleasing , A would be giving C for a limited period of the remaining term.  Significantly, under assignment, C would have  privity  of  estate  with the landlord, while under a sublease, C would not.

[Last updated in December of 2021 by the Wex Definitions Team ]

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State Bar of Wisconsin agrees to change diversity definition in lawsuit settlement

The Wisconsin association representing attorneys has agreed to change the definition of “diversity” to settle a federal lawsuit brought by a conservative law firm

MADISON, Wis. -- The Wisconsin association representing attorneys agreed Thursday to change the definition of “diversity” to settle a federal lawsuit brought by a conservative law firm that argued its internship program unconstitutionally discriminates based on race.

The State Bar of Wisconsin said that under terms of the settlement, its “diversity clerkship program” would continue unchanged under the new definition.

But the Wisconsin Institute for Law and Liberty, which brought the lawsuit in December, declared victory, saying in a statement that “mandatory and annual State Bar dues will not fund internships and policies primarily based on race, but rather on merit and diversity of viewpoint.”

The lawsuit was one of many filed across the country targeting diversity, equity and inclusion programs in the private and public sectors after the U.S. Supreme Court in June struck down affirmative action in college admissions, declaring that race cannot be a factor.

The original definition of “diversity” for the Wisconsin program said the concept includes race, ethnicity, gender identity and other factors. The new definition simply says it involves “including people with differing characteristics, beliefs, experiences, interests, and viewpoints.”

Under the deal, the bar association must also clearly say in all materials related to the program that race is not a factor in considering participation in the program, according to the conservative law firm.

The bar association also may not say that only law students from diverse backgrounds, with backgrounds that have been historically excluded from the legal field, or who have been socially disadvantaged are eligible, the law firm said.

The program in question offers summer internships for first-year law school students at top law firms, private companies and government offices. Past participants have included Alliant Energy, Froedtert Health, the Kohler Co., the city of Madison, the Wisconsin Department of Justice and the state Department of Corrections.

On its website, the bar association says the program is for University of Wisconsin and Marquette University law school students “with backgrounds that have been historically excluded from the legal field.” But the lawsuit alleged that is a new focus and that the program has historically been touted as a way to increase racial diversity among attorneys at law firms, private companies and in government.

About 600 internships have been created under the program since it began 30 years ago, according to the bar association.

“The settlement clarifies the definition of ‘diversity’ but makes no changes to the program,” Larry J. Martin, bar association executive director, said in a statement Thursday. “The Diversity Clerkship Program, which has been creating opportunities for Wisconsin-based law students for three decades, will continue to exist and to operate in its current form."

The State Bar of Wisconsin is a mandatory professional association, created by the Wisconsin Supreme Court, for all attorneys who hold a law license in the state. It has about 25,000 members.

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Trump defends Judge Cannon in fight over classified documents trial

Known for attacking other judges, the indicted former president calls cannon ‘highly respected’ amid dispute over presidential records law.

Former president Donald Trump , whose legal strategy in fighting four indictments has largely centered around attacking the legal system, on Thursday publicly defended the judge overseeing his classified documents mishandling case, calling her “highly respected” even as he regularly lambastes jurists in two of his other criminal cases.

Trump spoke out about the ongoing dispute between special counsel Jack Smith and U.S. District Judge Aileen M. Cannon after Smith filed court papers saying Cannon is pursuing a legal theory that is “wrong.” The special counsel’s filing urged Cannon to rule quickly on whether the Presidential Records Act allowed Trump to keep highly classified documents after leaving the White House, so that if she says it does, he can ask a higher court to overrule her.

Trump, who has been hit with three separate gag orders after criticizing judges, their staffs, their relatives or trial participants, attacked Smith and leaped to Cannon’s defense in a social media post Thursday morning.

The special counsel “should be sanctioned or censured for the way he is attacking a highly respected Judge, Aileen Cannon, who is presiding over his FAKE Documents Hoax case in Florida,” the post said. “He is a lowlife who is nasty, rude, and condescending, and obviously trying to ‘play the ref.’”

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Nothing about Smith’s filing is likely grounds for punishing him; he did what Cannon told him to do, albeit with a detailed argument about why the reasoning behind the request was wrong. Smith’s criticism was focused on Cannon’s specific order, not her general handling of the trial.

Former federal judge Jeremy Fogel, who now runs the Berkeley Judicial Institute, said the timing of Trump’s statement is as significant as what he said, because it could create the impression that when Cannon rules, she is responding in part to what the former president has said.

“Statements like that give rise to the impression that they are in a position to influence the judge,” Fogel said. “The context is very important. Mr. Trump’s post on Truth Social comes at a critical juncture in the documents case and effectively is a response to the special counsel’s filing yesterday. The best practice in a situation like this is for the judge to make a statement to the effect that their decision will be influenced solely by the facts and the law and not the out-of-court statements of a party or anyone else.”

Robert Mintz, a former federal prosecutor, said Trump’s comments were not surprising but did carry risks for him as a defendant.

“Given the enormously high stakes for both the prosecution and the defense, it is not surprising to see heated rhetoric and strident arguments from both sides,” Mintz said. “What is surprising is just how quickly the judge herself has become the central focus of this case. … Turning the trial into a referendum on the judge may be effective from a public-relations standpoint, but as a legal matter it runs the risk of further politicizing the case and creating even more legal issues that could later backfire on the defense.”

Cannon is weighing Trump’s claims that the Presidential Records Act, or PRA — a law that designates official presidential papers as belonging to the government, rather than individuals — overrides the enforcement of the Espionage Act under which Trump has been charged.

Trump faces 32 counts of violating the Espionage Act, each for a specific classified document that he is alleged to have illegally retained at Mar-a-Lago, his Florida home and private club, after his presidency ended. He has pleaded not guilty to those charges, as well as eight additional counts of obstructing government efforts to retrieve the sensitive papers.

His lawyers argue that the former president had the authority under the PRA to declare even highly classified documents to be his personal records and property. Last month, Cannon asked prosecutors and defense lawyers to submit proposed jury instructions in the case based on two scenarios, one which largely adopts Trump’s legal interpretation. Legal experts say both scenarios significantly misstate the law .

Smith responded in writing this week, just before a midnight deadline, saying Cannon’s instruction was based on a “fundamentally flawed legal premise” that would “distort the trial.”

The filing was unusual in that prosecutors rarely seek direct confrontations with judges overseeing their cases. In doing so, Smith made clear he sees significant potential danger for his prosecution in Cannon’s approach to the PRA issue. How Cannon, a Trump nominee who has been on the bench since late 2020, responds to his filing will be critical.

If she rules that the PRA protects Trump, Smith could appeal. If she retreats from the disputed legal premise, the issue could fade into the background as she decides a pretrial hearing schedule and sets a trial date.

Cannon’s court docket includes a host of undecided legal questions, and prosecutors have urged her to move quickly. It’s possible that on this issue too, she simply takes time to make her next move.

In the meantime, Trump is scheduled to stand trial in New York on April 15 for allegedly falsifying business records to cover up a hush money payment during the 2016 election. Two other criminal cases stemming from Trump’s efforts to block Joe Biden’s 2020 election victory have been moving slowly through pretrial proceedings and appeals.

In the documents case, Trump’s lawyers argue that the PRA allows the former president to keep even highly classified government documents as his personal property.

Prosecutors and legal experts have said such claims badly misstate the law, which was passed to ensure that presidential records would be turned over to the National Archives and Records Administration at the end of a presidency. Cannon’s focus on jury instructions at this stage of the process has flummoxed legal experts, because judges typically first resolve a host of more pressing questions about the beginning of the trial, rather than the jury instructions that come at the end.

Trump’s team said in its own late-night filing that Cannon’s assignment is consistent with Trump’s position that the “prosecution is based on official acts” he took as president — not illegal retention of materials.

The judge told lawyers to write jury instructions for two legal interpretations. Legal experts said she could use those instructions to help inform her eventual ruling on a request that Trump made to dismiss the case because the PRA allowed him to designate any presidential record as personal.

In one scenario, Cannon asked them to craft jury instructions that assume the PRA allows presidents to designate any documents as personal at the end of a presidency — which is what Trump’s legal team has argued he had the authority to do. She also told them to write jury instructions for a second scenario in which the jury has to determine which of the documents Trump is accused of illegally retaining are personal and which are presidential.

Cannon held a hearing more than a month ago to determine a new date for the classified documents trial. Prosecutors asked for a trial date in early July, while Trump’s lawyers asked to wait until after the election or to start in August at the earliest. The judge has not yet ruled, making further delay more likely.

More on the Trump classified documents indictment

The latest: Federal prosecutors have asked a judge to push back Donald Trump’s classified documents trial in Florida to July 8, probably after the Supreme Court rules on his claim of presidential immunity, while Trump’s lawyers are trying again to delay the trial until after the presidential election.

The case: The criminal investigation looks into whether Trump took government secrets with him after he left the White House and obstructed a subsequent investigation. Trump has pleaded not guilty . Here’s what to know about the classified documents case .

The charges: Trump faces 40 separate charges in the documents case. Read the full text of the superseding indictment against Trump and our top takeaways from the indictmen t .

Can Trump still run for president? While it has never been attempted by a candidate from a major party before, Trump is allowed to run for president while under indictment in four cases — or even if he is convicted of a crime. Here’s how Trump’s indictment could affect the election .

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• Jack Smith puts Judge Aileen Cannon on notice April 3, 2024 Jack Smith puts Judge Aileen Cannon on notice April 3, 2024
• Trump special counsel fires back at Cannon order that could disrupt case April 3, 2024 Trump special counsel fires back at Cannon order that could disrupt case April 3, 2024

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EU leaders, Blinken pledge continued support for Armenia amid regional tensions

The United States and European Union will continue to support Armenia and ethnic Armenians from the disputed Nagorno-Karabakh region, leaders from both sides of the Atlantic pledged as they were meeting with Prime Minister Nikol Pashinyan on Friday.

A Russian drone attack overnight damaged equipment at energy facilities in Ukraine's southern Odesa region, the national grid company Ukrenergo said on Friday via the Telegram messaging app.

Did a judge ax NY's cannabis regulations? What to know, what it means for legal market

Did a New York State judge just invalidate nearly all of the state's adult-use cannabis regulations?

Cannabis industry leaders scrambled to understand the ramifications of the surprise decision Wednesday, which could further snarl the ongoing dispensary licensing process for New York's embattled legal weed rollout .

State Supreme Court Justice Kevin Bryant, in Kingston, ruled that regulations governing the licensure of new dispensaries , prioritization of minority applicants, marketing of cannabis products and dispensary operations were void, according to court documents. Bryant said that the process for devising these regulations, as outlined in an evidentiary record submitted to the court, was bereft of proof needed to justify the rulemaking.

But the full extent and impact of Bryant's decision remain unclear, as he suggested in his ruling he was only targeting a narrow sub-section of the regulations at issue in the lawsuit. Nevertheless, Bryant went on to state that the entire regulatory framework adopted by the Cannabis Control Board was invalid.

The state's Office of Cannabis Management did not immediately respond to requests for comment Thursday.

Who brought the newest cannabis lawsuit in NY, and why?

A company called Leafly, a website about cannabis, cannabis products and local dispensaries, brought the lawsuit in September against the Office of Cannabis Management. The company had argued that the Cannabis Control Board's rules unfairly prevented dispensaries from advertising on their platform and sought to invalidate those particular restrictions.

NY marijuana legalization: See dispensaries map, timeline

Bryant ruled that the arguments and evidence presented to the court by New York regulators were little more than a "post hoc rationalization" of the rules after they were already complete. He explained that this evidence needed to have been considered during the actual regulatory process itself.

"Here, there is no indication that any evidence was actually placed before the administrative agency," he wrote. "It is not counsel's role to develop and outline a rational argument in favor of the regulations after the fact."

In a statement, Leafly celebrated the ruling, saying it would allow dispensaries to have "equal access to important advertising and marketing tools."

"We are pleased to hear that the court agreed with our claims and we couldn’t be more excited to support consumers and licensed retailers in New York with Leafly’s full suite of products and services," the company said. "We hope this decision ultimately leads to a healthy, stable adult-use market in the state."

What does this mean for NY's cannabis market?

The immediate impact of Bryant's decision is unclear, as the law undergirding the regulations, the Marihuana Regulation and Taxation Act, remains operative. Marijuana is still legal to possess in New York.

"You are not going to get arrested for possession," David Feuerstein, co-founder and partner of the boutique cannabis law firm Feuerstein Kulick, said Thursday.

It's also uncertain whether Bryant meant to invalidate all of the regulations, or just the portions challenged by Leafly.

Whatever the answer is, the ruling itself has already sown confusion within New York's cannabis market. The Cannabis Association of New York, which represents growers, dispensaries and other industry players, released a statement saying that all of the regulations appear to have been stricken.

"I have full confidence that this too shall pass and that the Court will reach a decision in the best interest of all parties," said Damien Cornwell, the association's president.

NY weed: Cannabis-related poisonings rising. How you can prevent them

Feuerstein acknowledged the confusion surrounding Bryant's decision, but said he expects the parties to seek clarification from the court.

Under a worst-case scenario, if the regulations are indeed abolished, the legal framework that allows dispensaries to operate would no longer exist.

"The law contemplates that before business is taking place, that there are regulations in place," Feuerstein said. "You have to have regulations."

However, Feuerstein cautioned that in practice, dispensaries would likely continue to operate, either because of emergency regulations adopted by the Cannabis Control Board, or because adverse enforcement action against them would be highly unlikely.

Asher Stockler is a reporter for The Journal News and the USA Today Network New York. You can send him an email at  [email protected] . Reach him securely:  [email protected] .

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Biden-Harris Administration Furthers Medicare Drug Price Negotiations, Releases New Data on How the President’s Historic Law Lowers Health Care Costs for Women

The Inflation Reduction Act’s Medicare drug price negotiations and other provisions will lower the cost of prescription drugs for millions of women

Today, the U.S. Department of Health and Human Services’ (HHS) Office of the Assistant Secretary for Planning and Evaluation (ASPE) released new research showing how key Inflation Reduction Act provisions will lower costs for women enrolled in Medicare, including nearly 30 million women enrolled in Part D. Also, today, HHS announced that the Centers for Medicare & Medicaid Services (CMS) responded to counteroffers from all manufacturers participating in Medicare drug price negotiations – which the Inflation Reduction Act made possible – and invited them to participate in further discussions.

The ASPE findings show that in 2020, about 733,000 women enrolled in Medicare Part D and Part B would have benefited from the Inflation Reduction Act’s $35 per month cap on cost sharing for Medicare-covered insulin products, and, in 2021, about two million women would not have had any out-of-pocket costs for their recommended Part D covered adult vaccines. Because of the law’s redesign of the Medicare Part D benefit, about 857,000 women who are not enrolled in the Extra Help program are projected to save $1,000 or more in 2025.

“The Inflation Reduction Act is making prescription drugs more affordable for women with Medicare,” said HHS Secretary Xavier Becerra. “President Biden promised to make quality, affordable health care available to every American – and he is delivering on that promise. Now that we are negotiating directly with pharmaceutical manufacturers to bring down the price of prescription drugs for people on Medicare, there will be even more savings in the future. That’s more money going into the pockets of hardworking Americans, instead of Big Pharma.”

“Women throughout the country are disproportionally impacted by high health care costs. President Biden’s Inflation Reduction Act is bridging this gap by lowering prescription drug costs and making health care more accessible for women – and all people – with Medicare,” said CMS Administrator Chiquita Brooks-LaSure. “CMS is proud to be negotiating in good faith with drug manufacturers to lower the prices of some of the most expensive drugs for people with Medicare.”

Some of the key ASPE findings include:

• Among Medicare enrollees, women have disproportionately higher rates of certain health conditions relative to men, including Alzheimer’s disease, asthma, fibromyalgia, osteoporosis, and certain types of cancer, which can lead to high prescription drug costs. Women therefore stand to gain more from lower drug costs and caps on annual out-of-pocket costs made possible by the Inflation Reduction Act.
• Women are disproportionately represented among Medicare enrollees in the Extra Help program, benefiting from expansion of the program’s benefits under the Inflation Reduction Act.
• Nearly two million women received one of the recommend vaccines that are now free for people with Medicare in 2021.

“Most Medicare Part D enrollees are women, and some conditions that can be effectively treated with prescription drugs are more than likely to affect women than men – such as autoimmune disorders,” said ASPE’s Principal Deputy Assistant Secretary Rebecca Haffajee. “ASPE research demonstrates that women and men who are seniors or who have disabilities are already saving money on prescription drugs under the President’s drug pricing law, and these savings will increase as more of the law’s provisions take effect over the next few years.”

Learn more about how the Inflation Reduction Act will help women here .

More information and helpful resources about the Inflation Reduction Act and how it is helping lower costs for people with Medicare can be found at LowerDrugCosts.gov.

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Delegation vs Assignment: Everything You Need to Know

The clause in an agreement that indicates a party's ability to designate their duties or rights is known as an assignment and delegation provision. 3 min read updated on January 01, 2024

Delegation vs. assignment: What's the difference? Delegation occurs when a party to a contract transfers the authority and responsibility for fulfilling a particular contractual duty to another party. Delegation is not concerned with the transfer of contractual rights. An assignment occurs when the original party to a contract transfers the rights and duties of the contract to another party.

Delegation and Assignment Overview

The clause in an agreement that indicates a party's ability to designate their duties or rights is known as an assignment and delegation provision. This provision is most commonly seen in the general or miscellaneous sections of a contract. However, it should not be considered standard contract language that never changes.

A clause of transferability for an assignment should be carefully considered and precisely drafted. Please note that a party assigns their rights and delegates their duties.

Unless the contract states it, consent is not needed for assignment or delegation. Make sure to review the language in the contract to figure out if the other party's approval is needed before proceeding with assignment rights or delegation duties. The rules governing assignment and delegation will vary from state to state. Attorneys with experience in business contracts or contract law may be able to assist in determining whether an assignment or delegation is allowed in your current contract.

The process of transferring accountability and responsibility is referred to as an assignment. There is no need to get a third party to approve a contact in an assignment. The rights within a contract are related to an assignment. All contracts contain rights, which are held by one of the involved parties.

A contract assignment occurs when a party assigns their contractual rights to a third party. The benefit the issuing party would have received from the contract is now assigned to the third party. The party appointing their rights is referred to as the assignor, while the party obtaining the rights is the assignee. 

For example, assume you're a plumber and have contracted with a homeowner to fix their plumbing for $100. As the plumber, you have the right to collect these funds from the homeowner. You also have the ability to transfer this right to collect to another party, which means you may assign contract rights. In an assignment, you may transfer the rights but not the obligations.

Remember, through the process of assignment, it is possible to transfer the benefits but not the obligations. You can prohibit an assignment from occurring by explicitly stating this in the contract.

The outcome from an assignment includes:

• The assignee having the ability to sue the obligor. The obligor is the party that's culpable for carrying out the duties included in the contract.
• The obligor has the same safeguards against the assignor as those with the assignee.
• The obligor is required to pay the assignor until the assignment is known by the assignor.
• Determine if assignments should be allowed.
• Determine whether the entire contract or only specific sections should be open for assignment.
• When an assignment is permitted, specifically state what duties and rights are eligible to be assigned.
• Will the assigning party need to get approval from the non-assigning party, or will a notice be sufficient?
• State the resolution process for assignments that have occurred but are prohibited by an anti-assignment clause .
• Divested entities
• Acquisitions

When Is Assignment Permissible?

Generally, parties are able to assign their rights, but some exceptions still apply:

• The assignment may not increase the obligations of another party
• Parties do have the ability to state in the contract that assignments are not allowed

In contract law, delegation is the act of giving another party the responsibility of carrying out the performance agreed to in a contract. The party receiving the responsibility must accept the responsibility and authority. Some of the consequences of a delegation include:

• The liability is transferred to the delegator from the delegatee
• Please note, the obligee is the party to whom an obligation is owed.

If you need help determining the benefits of delegation vs. assignment, 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.

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