Nature of Assignment-As Creating Absolute Assignment

Generally, the intent of the parties, as ascertained from the entire transaction determines whether an agreement is a security or absolute assignment, a court must search for the intent of the parties.  This intent is to be discerned from the contents of the document, the testimony of the contracting parties, and the circumstances surrounding the transaction.  However, a debtor’s assignment to the grantor of its right to a portion of the future contract payments is considered as absolute assignment, if the intent of the parties was clearly to cover an existing debt by allowing the creditor to receive.  While determining the intent of the parties, the court should evaluate the document as a whole in reaching its decision, assessing equally all segments. [i]

[i] Goldstein v. Madison Nat’l Bank, 89 B.R. 274 (D.D.C. 1988)


Inside Nature of Assignment-As Creating Absolute Assignment