An Assignment is the transfer of rights of an assignor to an assignee. An assignment is allowed unless there is a complete prohibition of assignment in the contract. The assignment of a right of one party to another extinguishes the privity of contract between the original parties to the contract and creates a new privity between the obligor and the assignee.
An assignment should meet several requirements to become valid. To validate an assignment of a right, all parties to a transaction should execute the agreement. The assignment should be in writing. If an agreement to assign is not in writing, parties can misunderstand or disagree on the specific terms of the agreement. The terms of the agreement should not be vague or ambiguous. The parties should have the intention to assign a right and the intention should be clear from the written agreement.[i]
The assignment should be made to parties who have the capacity to enter into an agreement. The party should have reached age of majority and be of sane mind. There should be a valid consideration for the assignment of a right and the assignment should be of a legal subject matter. The parties are legally bound by an assignment agreement.[ii]
Assignment agreements are subject to the law of contracts.[iii] The requisites for a valid contract and a valid assignment are the same.
[i] State v. Colston, 2005 Ohio 7031 (Ohio Ct. App., Clermont County Dec. 30, 2005).
[ii] Wilson v. Wilson, 2004 Va. App. LEXIS 17 (Va. Ct. App. Jan. 13, 2004).
[iii] HARTFORD FIRE INS. CO. v. UNITED STATES, 1986 U.S. Dist. LEXIS 27338 (D. Kan. Apr. 1, 1986).