Form and Requisites of a Valid Assignment

An assignment is the transfer of some right or interest from an assignor to an assignee that confers a complete right in the subject matter to the assignee.[i] An assignment is a manifestation to another person by the owner of a right expressing his/her intention to transfer his/her right to such person.

Generally, a manifestation of assent by an assignee to the assignment is essential to make it effective.  However, if the party gives consideration for the assignment or if an assignment is irrevocable by virtue of the delivery of writing to a third party, then the assent given by an assignee becomes immaterial.

There are certain requisites that make an assignment a valid one.  They are:[ii]

  • An assignment must be clear and unequivocal;
  • There must be clear evidence of the intent to transfer rights;
  • An assignment must describe the subject matter of the assignment;
  • Notice to the obligor.

There is no need for a specific language to make an assignment a valid one.  There is no need of any special form or words to make an assignment of a chose in action.[iii] Any words that indicate an intention of transferring or appropriating the chose in action to the assignee for valuable consideration can constitute a valid assignment.

Similarly, no particular words are necessary to constitute a valid assignment.[iv] Any words that show an intention of transferring or appropriating the chose in action to the assignee for valuable consideration can constitute a valid assignment.[v] Likewise, no written instrument is required if there is a verbal declaration that manifests the intention to part with the ownership of the chose.[vi] However, if the statute of fraud or a contract mandates that an assignment can be valid only if provided in writing, then the assignment must be in writing.

An assignment must adequately describe and identify the property or thing intended to be assigned in order to make that assignment a valid one.[vii] Since assignments are governed by contract law, it is subject to the same requisites other contracts need to meet to be valid.  Courts of equity can recognize certain kinds of instruments as valid equitable assignments.  The primary factor of an equitable assignment is the identification of the subject matter.[viii] It must be clear and specific.

A power of attorney given to a person to collect or receive a debt or fund will operate as an equitable assignment.  However, if the power is not made upon valuable consideration, it will not operate as an equitable assignment.[ix] Generally, an assignment does not depend upon the consent of the obligor.  However, partial assignments require consent by the debtor under certain circumstances.[x]

[i] In re Chalk Line Mfg., 181 B.R. 605 (Bankr. N.D. Ala. 1995)

[ii] Washington Mut. Bank, F.A. v. Teodorescu, 2005 N.J. Super. Unpub. LEXIS 633 (App.Div. Nov. 22, 2005)

[iii] Silver v. Ridley-Yates Co., 166 Ga. 49 (Ga. 1928), see also Baker v. Sutton, 47 Ga. App. 176 (Ga. Ct. App. 1933)

[iv] Northwest Nat’l Bank v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 25 Ark. App. 279 (Ark. Ct. App. 1988)

[v] Hogan v. Dalziel, 40 Ill. App. 2d 19 (Ill. App. Ct. 2d Dist. 1963),

[vi] Blount v. Farmers’ Bank of Greenville, 297 F. 277 (D.N.C. 1924)

[vii] Turner v. Rust, 228 Ark. 528 (Ark. 1958)

[viii] In re Dier, 296 F. 816 (3d Cir. Pa. 1924)

[ix] Marnon v. Vaughan Motor Co., 189 Ore. 339 (Or. 1950)

[x] Brandenburger & Davis, Inc. v. Estate of Lewis, 771 A.2d 984 (D.C. 2001)