Generally

An assignment refers to the transfer of rights held by the assignor to the assignee.  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.  In other words, 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]

The basic requisites of a valid assignment are that there must be clear evidence of the intent to transfer rights, it must describe the subject matter of the assignment, it must be clear and unequivocal, and there must be notice to the obligor.[ii] There is no need for certain specific words to make a valid assignment.  However, the assignor must make a clear statement that reveals his/her intention to assign clearly identified contractual rights to the assignee.  Therefore, a valid assignment must contain clear evidence of the intent to transfer the person’s rights and the subject matter of the assignment.[iii]

Sometimes, a contract may contain a non assignment clause which prohibits the assignment of specific rights, or of the entire contract.  However, such a clause will not take away the power of either party to make an assignment.  Rather, it gives right to the other party to sue for breach of contract if such an assignment is made.  However, the assignment of a contract containing such a clause will be ineffective if the assignee has any knowledge about the non assignment clause.

An assignor cannot cancel or modify the completed assignment by unilateral action without the consent of the assignee once a valid assignment is made.[iv] Similarly, the presence of a condition relating to an assignment will not invalidate the effectiveness of an assignment.[v] Thus, an assignment is not ineffective because it is conditional.

[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] Berkowitz v. Haigood, 256 N.J. Super. 342 (Law Div. 1992)

[iv] Wood v. Chicago Title Agency, 109 Nev. 70 (Nev. 1993)

[v] In re New York, N. H. & H. R. Co., 25 F. Supp. 874 (D. Conn. 1938)


Inside Generally