Construction and Interpretation of Assignment

An assignment is a transfer of property or some other right from one person to another.[i] Assignments are to be interpreted in the same way as any other contract.  Generally, contracts and the rights growing out of them are assignable.  However, contract rights are not assignable, if the assignment is prohibited by any statute or contract, or the contract involves a matter of personal trust or confidence.[ii]

Generally, an assignment of the contract and its acceptance by the assignee constitutes a promise by the assignee to perform those duties.  This promise is enforceable by either the assignor or the other party to the original contract.[iii]

Although contract rights are assignable, if a contract is personal in nature or contains a stipulation against assignment or if the assignment of it is forbidden by statute or public policy, then such contracts are not assignable.[iv] Similarly, personal rights which die with the person cannot be assigned and the mode which it acquired becomes immaterial in such a case.[v]

An assignment does not differ in its essential elements from any other contract. Therefore, any ambiguity in a contract must be resolved against the party who prepared it.[vi] However, an assignment of a partnership interest will not give the assignee the status of a partner.  Similarly, an assignee cannot become a partner without the consent of the other partners.[vii]

It was observed in Central Union Bank v. New York Underwriters’ Ins. Co., 52 F.2d 823 (4th Cir. S.C. 1931), that fire insurance contracts are not assignable because of confidence reposed by insurer in the owner of property.  Thus, the owner must not sell the property and transfer the policy to the purchaser along with the title.  In construing an assignment, if the words employed are free from ambiguity, then there is no occasion for interpretation.  If there is no ambiguity in the wording of the instrument, it is the duty of the court to give effect to the language of the entire document.[viii]

[i] Horbal ex rel. Highland Fin. Ltd. v. Moxham Nat’l Bank, 548 Pa. 394 (Pa. 1997)

[ii] Physicians Neck & Back Clinics, P.A. v. Allied Ins. Co., 2006 Minn. App. Unpub. LEXIS 804 (Minn. Ct. App. 2006)

[iii] Jeurissen v. Town & Country Homes, Inc., 2009 Minn. App. Unpub. LEXIS 446 (Minn. Ct. App. Apr. 28, 2009)

[iv] Folquet v. Woodburn Public Schools, 146 Ore. 339 (Or. 1934)

[v] Id

[vi] Bass v. Coltelli-Rose, 207 W. Va. 730 (W. Va. 2000)

[vii] Benton v. Albuquerque Nat’l Bank, 103 N.M. 5 (N.M. Ct. App. 1985)

[viii] Id


Inside Construction and Interpretation of Assignment